EFFECTS OF

CONTEMPORARY
ECONOMIC ISSUES
AFFECTING FILIPINO
ENTREPRENEUR
ENTREPRENEURSHIP

- is the ability to know what products and services are

needed by people and to be able to provide these things
at the right time, at the right place and to the right
people and at the right price.

- the person who does entrepreneurship is

called"entrepreneur".

- An entrepreneur organizes his own business, assumes

all the risk and returns on his investment,decides on
what, how and how much of a food or service will be
provided and monitors and controls all the activities of
the business.
 CONTEMPORARY ISSUES AFFECTING
FILIPINO ENTREPRENEURS

There are four(4) contemporary issues according to

SlidetoDoc(n.d.):

1. INVESTMENT AND INTEREST RATE

2. RENTALS
3. MINIMUM WAGE
4. TAXES
CONTEMPORARY ISSUES
AFFECTING FILIPINO
ENTREPRENEURS
Here are the following contemporary issues according to
SlidetoDoc(n.d.):
1. INVESTMENT AND INTEREST RATE
- when an entrepreneur starts, the very first issue that they
often encounter is how they will get their capital.

INVESTMENT
- is an asset or item acquired with the goal of generating
income. Investmenting includes the purchase of new
plants ,new equipment, new homes, and net increases in
inventories.
 There are two types of investments:
1. Long - term Investment
2. Short term Investment

•LONG- TERM INVESTMENT

-these are assets of the company which include stocks, bonds
and real estate.
- Long term investments are assets that a company intends to
hold for more than a year.

•SHORT TERM INVESTMENT

- these are investments that must be readily be convertible to
cash.
INTEREST RATES
-it is the amount a lender charges for the use of assets
expresses as a percentage of the principal.
- it is usually noted on an annual basis known as the annual
percentage rate (APR)

2. RENTALS
- starting entrepreneurs usually do not have their own space
to start their business.
- rentals has become an issue to starting entrepreneurs
because doing a business does not have guarantee you a big
sale right away, so if you don't make a sale and you still have
to pay a rent,it will really cause a problem.
3. MINIMUM WAGE
- Entrepreneurs provide job opportunities that is why they
have employees. Entrepreneurs are called employer. As an
employer, they are focused to implement the wage order to
all minimum wage earners regardless of their title, ranks, etc.
- The Philippines has this law called "Minimum Wage
Law".This law establishes a minimum amount that an
employer can pay a worker for one day of labor.

4. TAXES
- a tax is mandatory financial charge or some other type of
levy imposed upon a taxpayer by a governmental organization
in order to fund various expenditures.
The way tax is imposed often is justified in the basis of
one of two general principles:

a. The benefits received (Benefits - Received Tax

Principle)
- this principle relates taxes to the benefits taxpayers
receive from a public good.

b. The ability to pay (Ability to Pay Tax Principle)

- this approach to taxes relates that those with a
greater ability to pay are taxed more.
 There are four main types of national internal revenue taxes:
Income, Indirect(value-added and percentage taxes) excise and
documentary stamp taxes, all of which are administered by the
Bureau of Internal Revenue (BIR).

1. CORPORATE INCOME TAXES

the regular corporate income tax (RCIT) is 30% on net
taxable income. There is minimum corporate income tax (MCIT)
equivalent to 2% of gross income, which applies beginning on the
fourth year of commercial operation.

WITHHOLDING TAXES
- most income is subject to withholding of taxes.
- on income subject to the RCIT are creditable against the
calculated liability.
 Example:
If the payor is classified as a top-20,000 corporation
or a top-5,000 individual engaged in business, it is
required to withhold on all payments for the purchase
of goods (1%) and services (2%).

2. INDIRECT TAXES
- A 12% VAT is imposed on the gross selling price on
the sale, barter or exchange of goods and properties,
as well as on the gross receipts from the sale of
services within the Philippines, including the lease of
properties.
 3. EXCISE TAXES
- In addition to VAT, excise taxes are imposed on the
following: alcohol, tobacco, petroleum products, auto
mobiles, mineral products, and non-essential goods
such as jewelry and precious stones, perfumes, yachts
and other sport vessels.

4. DOCUMENTARY STAMP TAX (DST)

-Is required for certain documents, transactions or
instruments specified in the tax code when the
obligation or right arises from Philippine source or
when the property is situated in the Philippines.
EIGHT THINGS THAT HINDER THE SUCCESS OF
FILIPINO ENTREPRENEURS

1. Red - tape
2. Poor public utility services
3. Lack of financial support
4. Lack of marketing skills
5. Ineffective Management
6. Inability to Innovate
7. Lack of Customer care
8. Lack of self- growth
EIGHT THINGS THAT HINDER THE SUCCESS OF
FILIPINO ENTREPRENEURS

1. RED-TAPE
"What to do?"
- Despite of red-tape, entrepreneurs should still work
harder and produce more patience to comply with the
government' requirements. Remember to comply first
before you complain.
2. POOR PUBLIC UTILITY SERVICES

Entrepreneurs in the Philippines, especially in

the provinces, are continuously annoyed by
brownouts and slow internet connection. These
poor services do not only destroy the efficiency of
their business operation but also cause them a lot
of stress.
3. LACK OF FINANCIAL SUPPORT

for startup owner who are not yet

earning operating income, getting financial
aid from the government or obtaining a
loan from banks in the Philippines seems to
be impossible.
4. LACK OF MARKETING SKILLS

Entrepreneurs need to sell,build good

customer relationships, earn lasting profits,
and continuously grow their business. But
many aspiring entrepreneurs in the Philippines
don't spend enough on marketing campaigns.
5. INEFFECTIVE MANAGEMENT

- Many entrepreneurs have passion for business,

but don't have a passion for management and
leadership. Managing and organizing things inside a
business is a tough job.
- leading people is an even tougher job. Without
the ability to motivate employees and build stronger
teams in their companies, entrepreneurs cannot
succeed and grow their business.
6. INABILITY TO INNOVATE
Technology evolves rapidly, so as the
people. New business processes and marketing
methods emerge.

Example:
Online channels like search engines and social
media are now vital for business promotion. Without
adapting to these new strategies and changes,
entrepreneurs cannot become competitive.
7. LACK OF CUSTOMER CARE

Business need to consistently satisfy and make

their customers happy. Without giving
satisfaction to customers, a business cannot
survive in a long run. Many entrepreneurs focus
on earning money rather than earning loyal
customers. Consequently, their profit doesn't last
for long.
8. LACK OF SELF-GROWTH

Finally, what hinders the success of some Filipino

entrepreneurs is the lack of personal development. They
lack self- control to concentrate on their core goals. They
lack self-leadership to lead others. They also lack
patience, compassion and some love to always make
their customers smile.
- Without good habits and personal qualities, an
entrepreneur cannot advance. Without self- growth, an
entrepreneur cannot also achieve business growth.
 THANK YOU FOR LISTENING !!!

Reported by:
Gillesania
Maglasang
Lazaga
Leria
Helodo