OBJECTIVES

O At the end of the lesson, learners will be able

to;
O 1. Analyze the effects of contemporary issues
affecting business
O 2. Identify the different challenges faced by
Filipino entrepreneurs; and
O 3. Discuss the different determinants of
investments
 Applied Economics
SY 2022-23
Week 6
Oct.10-14,2022

Grade 12 ABM
San Francisco High School
Rogelio Aguilar
 Week 6

OCONTEMPORARY
ECONOMIC
ISSUES FACING
THE FILIPINO
ENTREPRENEUR
Investments and Interest Rates
O 1. Investment may be required to replace worn
out, or failing machinery, equipment, or
buildings. This is referred to as capital
consumption, and arises from the continuous
depreciation of fixed capital assets.
O 2. Investment may be undertaken to purchase of
new machinery, equipment, or buildings in order
to increase productive capacity. This will reduce
long term costs, increase competitiveness, and
raise profits.
O Net Investments =Gross Investment – Depreciation
O Example;
O If a bus company replaces five worn out buses with
identical new buses, and purchase two more buses
in order to be able to move to more destinations,
then gross investment is seven, replacement
investment is five, and net investment is two.
O In economic theory, net investment carries more
significance, as it provides the basis for economic
growth.
Determinants of Investment
O 1. The Expected return on the Investment
O 2. Business confidence
O 3. Changes in National Income
O 4. Interest Rates
O 5. General Expectations
O 6. Corporation tax
O 7. Level of Savings
O Investment climate in The Philippines
O The country’s weak investment climate has been
a major hindrances to generating investments
and creating more and better jobs . Compared to
its neighbors , it is still underperforming.
O Climate constraints:
O Corruption
O Lacluster performance;
O Pillar of Institution
O Insecure property rights
O Diversion of public funds
O Low public trust of politicians
O Burden of government regulation
 Current problems of Filipino
Entrepreneurs
O 1. Inadequate access to technology
O 2. Financing capital
O 3. Marketing Advice and
O 4. Logistical problems in setting up and
maintaining
Marketing Advice
Unemployment Status in the Philippines

O 1. The number of people entering the job

market has been greater than the job created
O 2. The difficulty of spreading the the benefits of
economic growth and suggests they have yet to
trickle down to more deprived ones.
O 3. Low quality of jobs available including
employee benefits
 Taxes in the Philippines
O The Philippines currently has the second highest personal and
highest corporate income tax systems among the ASEAN.
Types of Business Taxes in the Philippines
1.Value Added Tax (VAT
2. Salary and Wages Taxes
O 3. Amusement Taxes
O 4. Excise Tax
O 5. Import Taxes
O 6. Individual Income Tax
O 7. Corporate Income Tax
O 8. Real estate Taxes
O 9. Estate or Inheritance Taxes
Effects of high Taxes on Business
O 1. Inadequate Income
O 2. Low Wages
O 3. High Prices
O 4. Substandard Products
O 5. Product Unavailability and Continuation
O 6. Poverty and High Crime