SOCIO-ECONOMIC IMPACT OF A

BUSINESS ON HOUSEHOLDS
New businesses mean employment
opportunities for the Filipinos. Those
who have jobs but are earning low-
wages may find better paying jobs
with the new companies.
Unemployed workers looking for
work may have the chance of being
employed by this companies. The pool
of unemployed workers will definitely
 Being employed will enable them to buy
their basic needs and even some luxuries.
This means that their quality of life and
their standard of living will improved.
Acquisition of wealth and assets can
now follow both for the business owners
and the employees they hire. Profits
earned by the owners can be invested back
into the business owners and the employees
they hire.
Profits earned by the owners can be
invested back into the business for
expansion, or some can be withdrawn by
 With the growing focus on preserving
the environment for future generations,
businesses also get to contribute their
share. So called green structures for
buildings are means used to prevent
further damage to the environment.
Instilling the value of recycling and
reusing of resources among employees and
family members may also become the
advocacy of these businesses. Spreading
information on the dangers of global
warming may be promoted by the business
owners. Thus, businesses become
 SOCIO-ECONOMIC AND HOUSEHOLD
IMPACT ON BUSINESS
Although the country’s population is still
young with a majority (68%) aged below 29 years
old, it is gradually becoming older with declining
fertility and mortality rates.
More than one-third (35%) aged 15-34 years
old are given to sophisticated consumption. One-
third (33%) aged 14 years old are children
needing growing up care and only seven percent
(7%) aged 60 years old and above need elderly
support.
 But as fertility rate (children per
woman) is declining, so is the proportion
of children needing growing-up care (below
15 years old)
For example, fertility dropped from
six (6) in 2000 to three and one-half
(3.5) in 2010 while the percentage of
children up to age 15 years old
correspondingly dropped from thirty-seven
percent (37%) to just thirty-three
percent (33%). Also as mortality rates
of all ages dropped from 2000 to 2010,
life expectancy correspondingly increased
 Due to limited purchasing power of
income, many Filipino consumers have
become price sensitive and are only able
to afford cheap but shoddy items. Low
quality characterizes local products
especially manufacturers that are largely
food items.
Low quality consumption can mean
inadequate care for the young and the
elderly. Also, as non-essentials are
crowded out of the budget, so is
sophisticated consumption especially of
the youth. In the end, some micro
 SOCIO-ECONOMIC IMPACT OF A BUSINESS
ON THE COMMUNITY
Corporate Social Responsibility (CSR) has
become a growing trend among businesses
today. Corporations and even small
businesses have increased their focus on
projects that provide scholarships to poor
but deserving students, allocating budgets
for housing for low income families such as
participation in programs like Gawad
Kalinga, environmental protection
 including tree planting, elimination of
pollution, and other environmental
related programs.
Communities benefit from business-
sponsored activities that include sports
fests and wellness programs, livelihood
projects, micro financing and even
medical and dental missions.
TRADE AND CAPITAL
MOVEMENTS
The external sector shapes the
foreign exchange market (foreign
currency inflow and outflow) through
its trade, capital movements, and
financial flows.
TRADE includes factor payments
such as remittances from overseas
contract workers and profit
remittances of foreign companies to
CAPITAL MOVEMENTS include both
short and long-term foreign
investments in the country and
Filipino investments abroad.
FINANCIAL FLOWS involve
international debts and loans and
their repayments.
BALANCE OF PAYMENT = foreign
currency (largely in dollars) inflow -
outflow payments
Foreign currency receipts from
 From the viewpoint of the economy,
a BOP surplus means that more
foreign currencies are being sold for
pesos than those being bought with
pesos.

Likewise, A BOP deficit means

that less foreign currencies are
being sold for pesos than those
being bought with pesos.
 As part of its regulatory
function, the government through the
Central Bank competitively buys and
sells foreign currencies in the foreign
exchange market to balance supply
and demand and stabilize the
exchange rate.
The Central Bank buys foreign
currency surpluses with pesos and
sells them for pesos to fill the
shortfalls in times of deficit in order
 The economy’s production is yet
to go deeper into more technology-
based stages that it imports the
capital goods and final goods even
including consumer items that it could
otherwise produce.
But it only exports raw materials
and some consumer items using low
technology (e.g. garments).
Local manufacturing which
largely produces light manufacturers
items can hardly stand up to
imported competitive products.
Machineries and electronics
exports are simply products from
their imported components
assembled locally by transnational
corporations.
As the country exports little
but imports much, it spends more
but hardly earns foreign
 What buoy the foreign
currency market are net capital
inflows (foreign investment, loan)
that offset trade deficits
(imports exceed exports) resulting
in mostly BOP surpluses.
Foreign exchange rate (peso
to foreign currency) is relatively
high making peso imports costly
while exports are becoming more
 Unfortunately, local
production can hardly fill in for
costly imports as handicapped by
limited scale, access to
technology and government
incentives against the backdrop
of stiff import competition.
Thus, imports for an import
dependent economy is still costly
while exports continue to lose