IC 110 – GENERAL ECONOMICS

Course Description

This course deals with the behavior and performance of the economy as a whole as well as the roles
and functions of the market, the state, households and firms. It will also discuss the relations or
interactions of the said agents. The course shall use basic macro and microeconomic concepts and
methodologies in its discussions. At the macro level, the main topics will be the national income
(output), employment, agrarian reform, government fiscal policy, general price level, trade and
economic growth and development. At the micro level, the main focus will be on supply and
demand, elasticity and market structures and inefficiency.

Course Outcomes
On the completion of the course, student is expected to be able to do the following:

 Introduce the students to key concepts in economics;

 Familiarize the students with economic analyses that integrates economic theories and
concepts with facts about the Philippine economy; and
 Familiarize the students with pressing economic issues in the Philippines and the rest of the
world.

Table of Contents

Module 1: The Concepts of Entrepreneurship Page 2 - 4

Module 2: Development of Entrepreneurship Page 5 - 9

Module 3: Economic Development and Entrepreneurship Page 10 - 15

Module 4: The Government and the Development Page 16 - 22

of Entrepreneurial Economy

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 Module 1 – The Concept of
Entrepreneurship
THE ENTREPRENEUR

Entrepreneur is a word borrowed from the French word entreprendre, “one who
undertakes” – that is, a “manager”. In fact the word entrepreneur was shaped probably from
celuiqui entreprend, which is loosely translated as “those who get things done”. In the early
eighteenth century, a group of thinkers called the Physiocrats surfaced in France around a school
of new economic theory. They were the first proponents of laissez-faire and opposed all
government intervention in industry, especially taxation. Their doctrine was that the economic
affairs of society are best guided by the decisions of individuals.

The capacity and willingness to develop organize and manage a business venture along with
any of its risks in order to make profit, is entrepreneur. The most obvious example of
entrepreneurship is the starting of new business.

The Entrepreneur as a Missionary

The entrepreneur is a missionary who perceives opportunities inherent in the exchange of

goods with great desire for profit. The entrepreneur creates an environment in which success is
possible and the possibility of failure is controllable. The entrepreneur is at work whenever he
takes risk and invests his personal talents and resources to make something new or different as
customers like to buy new and improve products.

The Entrepreneur as an Extraordinary Businessman

The entrepreneur has knowledge which ordinary people do not have. This additional
knowledge leads the entrepreneur to exploit the opportunities to make profit. The information is
costless as opportunity arises at any given time and those with entrepreneurial acumen take the
lead before any before any individual takes their place. He uses his inherent talent for innovating
distribution of goods or making new service to satisfy his customers.

The Entrepreneur is Goal Driven

The entrepreneur is goal driven and self-confident as he exercises the locus of control. He
sets high goals and strives to attain the projected target and accomplishments. He extracts
compliance with set goals and activities to avoid the risk he foresees while planning the activities
and programs in the operation of the enterprise. He accepts the challenges and responsibility for
results. He makes sure that people work based on specified work programs and schedules.

The Entrepreneur is Marketing Man

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 The marketing environment is identified by the entrepreneur and thus he marshals his
resources to pursue the opportunities and makes immediate action to exploit his personal gain.
The needs and wants of customers are properly identified and these are the propelling reason for
him to take the opportunity to make profit. He takes the lead for innovation and makes
modifications to make the customer aware that his product or service is more superior to those
offered by others.

The Entrepreneur Starts Small to Become Big

Many entrepreneurs start small but with their managerial talents and persistence, they
exploit the opportunities available for their disposal. At the early stage, their growth orientation is
for expansion of their operation and they persistently pursue approaches that differentiate
them from other managers. It is the entrepreneur source of power and authority in managerial
position and a negative possibility has no place in his management style as turns them into
possibilities that make him entirely different from other managers in the organization.

THE MAKING OF AN ENTREPRENEUR

The making of an entrepreneur is a dynamic process and an approach. As an approach, then

entrepreneur considers the business opportunity as a chance to find new ways to solve the problem
rather solving the problem. A manager of an organization is characterized as an adapter while the
character of an entrepreneur is an innovator. The manager employs discipline and precise
methodological approach in solving business problems while an entrepreneur approaches the
problem on a different angle as he focuses on discovering problems and make new avenues for its
solutions. Entrepreneurs are a process that can be developed, learned and nurtured.

THE ENTREPRENEUR AS A DYNAMIC PROCESS

Entrepreneurship is a dynamic process of innovation and creation of new opportunity for

the creation of new venture. The small business entrepreneur in the sense is self-employed and is
different from an innovator entrepreneur. The real entrepreneur is an individual with the greatest
drive for expansion and growth. The real entrepreneur has propensity to make a difference in
terms of their achievements in profit and exploitation of the resources for growth and business
expansion.

The entrepreneur develops strategic plans and programs that will ascertain a definite
advantage over the others in their line of business. This is the reason why we see people in the
same line of business that others had gone miles over the others. The former is a manager of his
business while the latter is an entrepreneur.

THE FACTORS THAT DEVELOPS ENYREPRENEURIAL ACTIVITY

1. The Entrepreneur Takes the Initiative

With his great interest to capitalize on the opportunity at hand the entrepreneur
takes the initiative of venturing into business. With some knowledge on hand, he
knows that he can operate the venture with minimum risk. With vigour and vitality,
he plunges into a profitable operation.

2. Organization of Capital Resources

While talents and ambitions are great resources of the entrepreneur, financial and
human resources are important ingredients in the start of the organization. With his

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 savings and other financial resources, he starts operation on small scale together
with his trusted family members or friends he knew that could help him develop his
dream enterprise.

3. The Development of Administrative Machinery

The management is developed with organizational structure based on the need of
operation. Specific duties and responsibilities are assigned to individuals with talents
and skills that fir their respective position. It is based on the individual capacity to do
the job not on personal connection with the entrepreneur.

4. The Development of Entrepreneurial Autonomy

The entrepreneur develops autonomy in the operation of the enterprise as he takes
the lead in all activities of the organization especially in the early stage of operation.
His venture capitalized as he knows best the direction of the enterprise as he is aware
of the calculated risk involved. Locus of cost control must be in his hands.

5. The Development of SWOT Analysis

The avoidance of risk can be taken with careful analysis of the Strength, Weaknesses,
Opportunities and Threats of the organization. The entrepreneur must see the
environment of the enterprise based on SWOT analysis so that the risk involve could
be seen before it happens. Forecasting environmental events are antidote to future
business risk.

PECULIAR CHARACTERISTICS OF MANAGERS IN SOLVING PROBLEMS

1. He develops system and procedure that are précised based on current practices in the
industry.

2. The manager is interested in solving organizational problems rather than finding other
avenues in the solution of the problems.

3. The manager is interested in the refinement of policies and procedures and tends to revise
them to solve existing problems.

4. He finds ways and means to solve problem and compliance to routine activities.

5. He is interested in details and sensitive to group cohesion and extract group cooperation as
a means to group accomplishments.

CHARACTERISTICS OF INNOVATOR ENTREPRENEUR IN SOLVING PROBLEMS

1. He looks the problem on different angles and fined means to circumvent the same.

2. He discovers the roots of the problem and develops avenues to better solve the problem. He
formulates solutions and alternatives.

3. He develops basic assumptions and hypothesis related to current practices and makes
innovations based on careful analysis through SWOT.

4. The innovator entrepreneur is interested in the end results rather than the means to achieve
it. He has little tolerance for details and routine work.

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 5. He capitalized on people with bright ideas and talents and gets their opinion and consensus
and with little regards for people with mediocre ideas.

Activity 1

Direction/s: In not less than three (3) sentences, explain the meaning of the following concepts.

1. Strategic Thinking

2. Risk Assessment and management

3. Workplace Competencies

4. Commercial Aptitude

5. Financial Management

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 Module 2 – THE DEVELOPMENT OF
ENTREPRENEURSHIP

THE MAKING OF FILIPINO ENTREPRENEUR

The making of Filipino entrepreneur is a process of trial and error. The colonization of the
Filipino for more than 300 years is a great factor in the slow development of entrepreneurial
activity in the century. Our concept of owning a small business like a sari-sari store, or a small
tailoring shop or market distribution outlet already makes the person an entrepreneur. While the
concept is true to certain extent, entrepreneurs is more than being self-employed and making a
living out of the meagre income to support family needs or a little of their wants.

THE CHALLENGES FOR ENTREPRENEURSHIP

The new generation of young entrepreneur should look up the high standard of values and
character of entrepreneurs who got up the ladder of success. Success in entrepreneurial activity is
based on the inner compulsion to achieve the undeterred difficulties. The values and character of
JUAN TAMAD has no place in the world of entrepreneurial vocabulary.

1. The new entrepreneur must be a doer and willing to work hard and long until he achieved
the task he wanted for himself.

2. Personal attention and comprehensive awareness for the process of the business is not
trusted to other people.

3. The new entrepreneur must have sense of integrity that he stands firm on his principles and
ideals.

4. Emotionally stability is an important factor in the making of an entrepreneur.

5. The built in self-starting mechanism that drive entrepreneur to success is his executive
ability to manage people and resources. This executive ability refers to how he plans,
organizes, directs and controls the physical and material resources under his disposal. Many
entrepreneurs were described to have shrewd judgement in character that induced them to
see things the way it should be. He has a passion for excellence and mediocre performance
has no place in his entrepreneurial vocabulary.

THE STARTING POINT OF ENTREPRENEURIAL SUCCESS

1. Start to be on your own

2. An individual can never be attain success in entrepreneurial activity unless he starts his own
business and releases himself as an employee for the rest of his life. Income from
employment is never enough as it is good only until the15th and end of the month. Never
have we finds an ordinary employee who get rich except those who are connected with the
government and amass wealth through graft and corruption.

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 3. Explore the business environment

4. The Philippines being a haven of opportunities is wide open for people who dream to be rich
and amass fortune as we have all the natural resources. Find the things you can do best and
you must have the talent and interest in doing it. Remember that the central objective of
any business is to produce the best goods and those that provide better service.

5. With the talent you acquired in conducting feasibility studies in your college days or those
that you learned from experience apply your knowledge in SWOT analysis. Consider
opportunities for expansion as business growth is possible under good management.

6. Be in control

7. The entrepreneur must be in the driver seat of his business. You cannot trust your business
to somebody who does not own the ideals and aspiration of the enterprise. Be in control of
the operation as you develop people whom you can work with dedication and with values
the same as yours. Invest your time with people who are achievers and do not lose your
valuable time with losers.

8. Motivate people to excel and make their desire burning for success with their
accomplishments. Make them partners in decision making and develop their ego needs for
proper recognition. People are your assets that can help you propel success in your
business. Think that improving efficiency and effectiveness will create more space for
growth and development

9. Have a Good Accountant or a Trusted

10. While you, as an entrepreneur are busy with the management of the business, a good
accountant or financial adviser is needed to help you out in the financial activities of the
enterprise. They can help you re-invest your money to other profitable [Link]
trust and confidence can be given, you must also have the knowledge of the entry in
financial statements. Develop control procedures that you are still in command in
approving transaction involving money and its disbursements While you economize your
expenditure, be sure that every peso is spent wisely without sacrificing quality in products
or service

11. Seek the advice of professionals

12. You are not a superman to know all the legal and other matters related to the operation of
the enterprise. Seek the services of a legal consultant on matters with legal implications.
Have your income tax prepared by good accountant lawyers or certified accountants that
know how to deal with government regulating body in terms of tax payments.

13. All legal matters and intricate government transactions must be entrusted to people with
the right connection and knew how to deal with business problem as the government as a
regulating body may affect the business operation especially in the period of expansion

ENTREPRENEURIAL MANAGEMENT DEMAND

Many successful entrepreneurs in the Philippines and those in the foreign countries are not
the making of known schools of management. Most entrepreneurs came from scratch and have
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acquired managerial expertise in making business empires through shared hard work and
dedication. They possess characteristics and intelligence to make things happen rather than wait
for things to happen.

1. The entrepreneur is alert to opportunities and perceptive to make things happen.

The entrepreneur looks at things much ahead of other people. He sees things in different way and
develops strategies to make things happen the way he perceived it to be. An entrepreneur is a
starter but makes sure that what he started, he pursues until he succeeds in making it happen

2. The entrepreneur has the health and endurance to work long hours.

The dreamer entrepreneur could not stop working until he finds solutions to his perceived idea. He
spends 75 percent of his 24 hours time thinking and working until he gets to the realization of his
of dream. He is willing to sacrifice personal pleasure in his quest for the true meaning of his ideal
set up of the business enterprise.

3. The entrepreneur is self-assured.

The entrepreneur does not have a one track mind. He finds new avenue or courses of action as he
senses some danger zone with his plans and programs. He Makes easy revision but he makes sure
that the track on hand is still towards the direction he wanted to achieve. He crafts new
alternatives solutions and devises ways to make a difference.

4. The entrepreneur of flexible and adapts to change.

The entrepreneur could not easily be rattled with problems or uncertainties He has great trust in
his capability to develop new things. His intelligence and self-confidence is always at high level. He
is guided also by his faith in God that his good intentions and actions deserve to be fulfilled.

5. The entrepreneur seeks other’s opinion or makes researches.

He believes that person who asks question could only be fool for a minute but one who ask no
question could be fool for a life time. He seeks the advice of other professionals that will help make
things happen. He indulges in research activities to find new solutions

PROFILE OF A SUCCESSFUL ENTREPRENEUR

Successful people in the field of business are creators of things with difference. They are no
ordinary Juan dela Cruz who we can be seen around the corner. They are people with great
ambition and are alert to the environment that they can explore towards successful venture. They
possess eagle’s eye that can see and dive hundreds of feet down and make catch the prey of
opportunities.

Most successful entrepreneurs are described to possess the following profile:

1. The entrepreneur has strong desire for independence.

2. An entrepreneur would not like to be attached to his employment. He seeks
independence and strives to develop his own business. As he acquires new insights and
opportunities he would seek that sense of independence. He thinks differently and
would venture in trying to satisfy his own curiosity. He assumes responsibility with pride
and determination.
3. The entrepreneur develops strong drive to succeed.
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 4. Success is for people with the profound need to achieve their dreams and life aspiration.
Achievements are the ego of people with the inner desire for independence. He does not
depend on others as he thinks that his success lies on his own making. He is a good
organizer and leads others to successful venture. He finishes things he started and leaves
no stone unturned to get his way.
5. The entrepreneur has strong determination in decision making.
6. The strong personality of the entrepreneur carries with it the power to make decisions.
He is aware of developing new markets and creates new things to satisfy customers'
needs and wants. He capitalizes on his inner drive to make profit before anyone else
could take that opportunity. Innovativeness and creativity go with the power to make
decisions.
7. The entrepreneur develops feedback mechanism for results.
8. The development of feedback mechanism is one important factor in the development of
successful business entrepreneur. He goes back to where he started and finds out things
the way they are. He believes that one who does not look back cannot go miles away
from his starting point. Feedbacks are factors for analysis and decision making. He
needs data and figures to make wise decisions.
9. The entrepreneur is a results-driven individual.
10. Profit is the result of accomplishment. His achievements are the driving force that keeps
him awake for more opportunities. He expects results for activities he planned.
Employees with mediocre abilities and low sense of feeling for accomplishment have no
place in his organization. He expects results to be on time and with highest quality. He is
impatient for poor performance and expects quality output.

MANAGERIAL SKILLS THAT MAKES A SUCCESSFUL ENTREPRENEUR

Being hardworking and industrious is no guarantee in the making of business activities

while they play an important role in the success of the enterprise. While many successful
entrepreneurs have not gone to business schools to acquire managerial theories in the
management of the enterprise, they have developed managerial skills through share observation,
or an inherent leadership ability and intelligence.

The Entrepreneur has the following managerial skills:

1. The ability to plan and conceptualize.

2. Conceptualization and planning go together. Good concepts need to be put in the
planning table to avoid the risk factor. The entrepreneur is able to forecast the future by
seeing to it that the risks involve are properly controlled.
3. He must be able to visualize the direction of the business towards successful take-off. He
must see that the products or service, the pricing strategies, the cost of production, and
the inventory will generate reasonable profit and return of investment. The take-off
point of any business is the generation of profit based on plans and programs.
4. The ability to organize the resources of the enterprise.
5. A good business organization is based on around people and resources. Entrepreneur
works with others and needs people with the same values and working ability. Efficiency
and effectiveness in the work arena are the working of people with dedication and talent
to do the job properly. The material and physical resources must be put in place. Waste
of time and money has no place in a good organization. The entrepreneur must be able
to give specific direction and work activities that will redound to efficient delivery of the
necessary services to customers and clients.
6. The ability to direct and motivate people in his organization.
7. People are like machines that need oil that will make them work smoothly and efficiently
and effectively. Machines will bug down if no oil is put into its chamber while in

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 operation. The same principles work with people. They need proper compensation and
motivation for them to deliver the necessary output
8. Compensation and benefits are no guarantee for effective performance while it may
serve as important ingredients. The entrepreneur must be able to communicate ideas
and plans to his subordinates with sense of humility. Good communications and human
relations will drive people to be motivated to perform their task with pride.
9. The ability to control.
10. Controlling the whole operation is a difficult task for the entrepreneur Safeguards and
control mechanism could put in place with carefully crafted policies and procedures.
Such policies and procedures must be carefully disseminated and understood by all who
will implement them. In the implementation stage, check valves through monitoring and
feedbacks mechanism must be worked out through reports and at times conference with
key people. The progress of operation and other activities related to finance and
marketing must generate the necessary reports as bases for more plans and actions,
Controlling cost and none essential expenses will save important profit that could be
invested in profitable operations.
11. The ability to manage time.
12. Time Management is a very essential ingredient to the success of an entrepreneur.
Because of the numerous activities to attend to the entrepreneur must be able to log on
his time schedule so that important activities could be attended to on time. Meetings
and Conferences occupy most of the time of entrepreneurs. They must be scheduled
properly that they will not complicate with important paper works in the office. Some
entrepreneurs who burn themselves out with stress die early and do not see the fruits of
their labor, they must have schedule for his family, his religion and enjoy some personal
pleasure that will eliminate the stressful task of managing his business.
13. The ability to adapt to the changing environment of business.
14. Business today is fast changing with the advent of technology and innovation. The new
entrepreneur must be able to adapt to this changes in the business landscape for him to
go with the time of progress and expansion.
15. Consumers' tastes and preferences are gradually changing to better quality products and
services. Competition is shifting to more affordable quality products and entrepreneur
must be aware of this changing customer demand. Changes are applicable and
adaptability should be given attention to gain continuous customer patronage. While the
above discussions are the theories and elements of good management, an entrepreneur
without formal training should attend seminars and advance schooling to get further
into the realms of better management theories that will help in the operation of the
enterprise. Learning is not the sole property of those in school. Reading and attending
various management interventions would make a great difference.

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 Activity 2

1. Write down at least 10 qualities that you possess as business students

2. Among those qualities, rank them with 1 as the highest or strongest quality and 10 as the
lowest or weakest quality.

3. What are entrepreneurial competencies that you need to have to become a successful
entrepreneur?

1.

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 Module 3 - Economic Development and
Entrepreneurship

The Philippine Economic landscape remains to be the springboard of questions when economic
development is the focus of discussion. The leaders of this nation aim greatness for the Filipino
people especially during the time of election. Their honest intention of improving the economic
condition is their battle cry that catapulted them into power, yet in spite of the many promises
Filipinos remain poor. Instead of improving the living condition of the Filipinos they amassed
wealth as a preparation for the next election Politics becomes an investment for power and money
and it’s not the true essence of public service. Two important factors hinder our growth as a
nation:

1. Poverty is the making of its people and the kind of leaders that holds the wheels of economic
fortune.
Our country is still dominated by poverty and the unjust distribution of wealth. Income
is in the hands of the few opportunists. Power is in the hands of traditional and family
politicians as they amass wealth through graft and corruption
2. Population explosion is another factor that contributes to the poverty of our nation.
We cannot increase the size of the land that is cultivated by the farmers yet his family
size continues in number. Productivity in agriculture remains the same through
the years. Economic activities in the countryside remain in the hands of few
entrepreneurs who take advantage in the marketing of products to the urban center.

The following factors are contributory determinants to our slow growth in economic development
as a nation:

1. THE FILIPINO VALUES AND CULTURE.

a. Love for Imported Products.

The country's colonization for centuries has developed in the Filipinos culture of
dependence and love for foreign products. We still feel that imported products are superior
in quality and we look upon our own products as inferior.

b. Our Values of BAHALA NA

A true Filipino entrepreneur will not put his destiny in the hands the BATHALA He
must act with strong determination and push for the development of his Ideas
Innovation and the creation of more goods and services are in the hands of entrepreneur
who has the ability to make new and innovative products or create a new channel of
their distribution.
BAHALA NA is the concept of belief in BATHALA, the gods of the lazy o bones and
undetermined individuals Faith in GOD could be the driving for or any entrepreneur to
make things happen as he believes that his power to think and innovate comes from the true
GOD that guides the destiny of man.

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c. Our Crab Mentality.
Crab Mentality is the action of people to pull down others who are about to get out of
the verge of poverty and reach for their success. Nervousness the making of people who
could not think better for himself. There are many of us who destroy others yet when
we look at the mirror we are not better than them.
d. The MANANA HABIT.
MAMAYA NA or BUKAS NA is a culture that is brought to us by the colonizers who
were fond of SIESTA after lunch time. We take time in stride wasting time. The real
entrepreneurs do not believe in siesta as they keep working until things are done according
to their plans.

e. The Value of Time.

Relative to the above discussion is our lack of value to the precious time given to us,
24 hours a day and 364 days in a year. We are always late in the start of the program coming
to our classes, attending to office work and even in important meetings and appointment.
We take all the time in our hands, not thinking that the meaning of progress rest in our
value of this precious gift of time.

f. Our Values of HIYA

HIYA could be a positive value in dealing with business condition. It could be a
propelling reason for us to create better service and proper dealings in business transaction.
There are still many of us who make shortcuts in business dealings: Good in its face value
but with hidden agenda of fraud and deception.

g. Fiesta and Social Occasions.

The celebration of Fiestas of Saints that we inherited from the Spanish colonizers
could be another factor in the slow development of our economy. People especially in the
country side would have all their savings spent in a day of the fiesta, entertaining guest,
only to find out the next day that there is no more rice to feed their children.

2. EMPLOYMENT OPPORTUNITIES

Employment opportunities remain to be elusive among Filipinos. The industries in the

economic zones and other urban centers could not accommodate the growing employable people.
Most still receive minimum wages that barely support the needs of five members of the family.

a. Employment is One Great Factor in Economic Development.

The entrepreneur provides the necessary work for people that propel the economic
development of the nation. The money in circulation for wages and salaries will help
local industries to develop new products and services that generate more small and
medium enterprises.
Contractual employment is still the name of the game in most factories as
multinational corporations still take advantage of the low labor cost. Workers are
lured to this opportunity as there exist no better employment. The national labor laws
still favor multinational interest for fear that they will pull out their investment when
better employment terms will be implemented.

b. Income Opportunity in the Countryside is Still Subsistence in Nature.

Most people are still dependent on old farming and fishing system. We have not
introduced modern farming technology and the proper culture of our fishery resources.
Our corals and fish sanctuary are damaged by destructive methods of fishing. Our vast
shoreline could be developed into haven for fishery development if new methods and
technologies could have been put in place to supply the food of the nation.
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SECOND LOOK AT THE AGRARIAN REFORM PROGRAM

The AGRARIAN REFORM PROGRAM should be looked into with the different perspective
as to its meaning in the honest development of our economic condition: This author is not a
landowner who holds magnitude of land that will be covered by land reform. I still believe that
distribution of lands will not improve the living condition of the farmers. Distributing the land will
further put them in the verge of economic poverty in the long run.

Development of parcels of land or dividing them into managerial level of one hundred (100)
to one hundred fifty (150) hectares per group of farmers of ten (10) families will be more effective
as we group them into family cooperatives that will sustain the development of the soil with
government's support in terms of modern farm implements.

The billions of money spent in acquiring the lands and the farmers paying them back could
have been used to modernize agricultural production. The introduction of machineries and new
production technology will propel economy in the countryside. More income for the farmers would
mean economic development for all. Economic development is the end result of growth in the
agricultural sector

AGRICULTURAL COOPERATIVES

Development of agricultural cooperatives in the countryside with full government support

could be the starting point of the making of entrepreneurs. Seed money could come from the
POVERTY ALLEVIATION FUND that was distributed in cash to poor families. Dole outs would
not improve the people's living condition and the economy of this nation.

Giving them fish could alleviate hunger for a day, but let us give them fishing rod to catch
fish to sustain their living for a lifetime What they need is capital and entrepreneurial education
that will sustain a better life for today and the future for their children.

Opportunities in the countryside are wide open for entrepreneurship Education for
economic development should be put in place in the areas of how to operate small business
enterprises. Let us teach them on how to make productive endeavours in making the vast
resources turn into products that could be exported or for local consumption.

3. THE FAILURE TO DEVELOP BETTER SYSTEM OF EDUCATION.

The mandate of education is the development of its people for economic prosperity and
development. Our investment in education should cascade the line for development of sustainable
income for those who finished high school and more so for those who graduated college.

The government spent billions of money for education to prepare the population for gainful
employment or to become small and medium entrepreneurs. Our aim is to develop them to be
morally, spiritually, and economically stable for them to live decently as we eradicate them from
the bondage poverty.

We produce so many college graduates in the field of nursing with the hopes of them
passing the licensure examination and getting employed locally or abroad. The quality of education
failed to make them pass the examination and many ended in other occupation or employed in
PAL-LAMUNIN NG MAGULANG who spent millions of money to get that coveted diploma. The

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dwindling opportunity for employment abroad and the hope of fortune in earning the green bucks
are becoming elusive.

THE QUALITY OF TRAINING AND EDUCATION.

Another factor is the quality of training as a contributory element in their failure to hurdle
the difficult test conducted by the PRC Many ended up as factory workers, security guards, or
going back to the province to help their parents. Many of those who dreamed mortgaged their
property in order to provide their children with quality education

In the field of commerce and accountancy, many ended up fast food chains as service crew,
a job that is more appropriate for mere high school graduates For failure to end up in office
employment, others become factory workers on contractual basis or doing menial jobs as sales
clerk in malls with minimum or below minimum wages under the employment agency for a period
of 5 to 6 months.

There are other courses that suffer the same failure. In the field of education, many cannot
be employed as they failed in the licensure examination. We have so many graduates in all major
fields of educational endeavour because of our failure to regulate the courses being offered.

An intensive study and research should be done in the regional and national level as to the
need for manpower and those for exportable ones. The product of education should match the
need of the industry. A mismatch is a wasted investment.

Education becomes a commercial entity. Most of those who hold the break for the
proliferation of courses are blind to realize the price to pay for this educational mismatch. Again,
graft and corruption is the making of those in power and the government.

The new K to 12 EDUCATIONAL PROGRAM of the Aquino administration could be an

answer to this elusive educational development that will help propel the economy of the country.
While we bestow hopes, we are still in great search for the answer to this dream We lack the
necessary classrooms and educational facilities to implement the program. We are wanting in the
quality of teachers in terms of their training and preparedness to handle courses.

We lack books and reference materials including the necessary visual aids to make teaching
and learning meaningful Improvement in instruction needs new technology such as computers
and other equipment to train working hands in its proper operation. We need linkages with
industry in the training of those in the senior level so that employment could be generated after
graduation.

4. AVAILABILITY OF NEEDED CAPITAL

The banks are sources for limited capital for small and medium enterprises. These resources
are available in the banking institution. The poor people are not aware of these great opportunities
and they do not know how to go about it to avail of the funds

a. Republic Act 6977, known as the Magna Carta for Small Enterprises provided the necessary
funds for the development of entrepreneurs in the countryside.

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The intention of the law is to provide the promotion growth and development of SMALL AND
MEDIUM ENTERPRISES by assisting government and RELEVANT AGENCIES ( capitalize for
emphasis) in tapping local and foreign capital and the use of existing guarantee funds.

The management of the fund is headed by the Secretary of Trade and Industry whose members are
also Department Secretaries from Labor and Employment Agriculture, DENR. DOST, and other
members who come from Luzon, Visayas and Mindanao and some members from the banking
industry are appointed by the President

Under the Law of SMALL AND MEDIUM ENTERPRISES DEVELOPMENT COUNCIL have
some of the important powers that could develop the countryside and those of the local
enterprises:

1. To recommend to the President of the Philippines and Congress on policy matters affecting
small and medium enterprises

2. To coordinate and integrate various government activities relating to small and medium scale
enterprises and private sector

3. To monitor and determine the progress of various agencies geared towards the development of
the sector.

4. Provide appropriate policy guidelines and coordinate frame work in assisting relevant
government agencies in tapping of local and foreign funds for small and medium enterprises.

5. To assist in the establishment of modern industrial estates outside the urban centres.

6. To promote the viability of small and medium enterprises by way of directing or assisting
relevant government agencies in the national, regional and provincial levels towards the following:

a. Technical training courses and those related to business operation like simple
accounting and bookkeeping
b. Labour and management relation and improve working condition.
c. Product development and quality assurance and product diversification.
d. Improve production techniques and the use of technology in production and the
utilization of indigenous community resources and raw materials.
e. Provision and assistance in the marketing and distribution of products.
f. Provide for concessional interest rates, lower financing fees, and incentive for
prompt credit payments, as well as arrangement tying amortization to business cash
flows, effective substitution of government guarantee cover on loans for barrower's
lack of collateral.
g. It provides for the setting of a RELIEF SYSTEM for distress enterprises as preventive
bankruptcy measures and the setting up of insurance against-extraordinary disasters
h. It provided for INTENSIVE INFORMATION CAMPAIGN and ENTREPRENEURIAL
EDUCATION (the intention of which is to give opportunity for all those with
entrepreneurial talent and interest.)
i. The law provides easier access and availment of tax credits and other tax and duty
incentives as provided for in OMNIBUS investment code and other laws.
j. Provision for product research and development and system of experimentation and
access to information on commercial technologies
k.

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B. Republic Act No. 6810 is the establishing the MAGNA CARTA FOR COUNTRYSIDE AND
BARANGAY BUSINESS ENTERPRISES, granting exemptions from any and ALL government rules
and regulations and other incentives and benefits and for other purposes:

The important provisions of this ACT are the following:

1. To achieve development of countryside business BARANGAY level through the absence of

BUREAUCRATIC RESTRICTIONS and granting of incentives and other benefits.

2. The number of employees should not be more than twenty (20) at any time for the purpose of
undertaking a productive business enterprise that will help the economy in the area.

3. The productive enterprises shall be principally engaged activities:

a. Professional service
b. Retailing
c. Wholesaling or Trading of Commodities, products or merchandise.

4. Assets at the time of registration do not exceed FIVE HUNDRED THOUSAND PESOS before
financing.

5. The Principal office and location of business is in the countryside or BARANGAY

6. The countryside business shall pay the registration fee of TWO HUNDRED FIFTY PESOS
(F250.00) to the Municipality or City where the principal business is located

7. All COUNTRYSIDE AND BARANGAY BUSINESS ENTERPRISES (CBE) shall be exempted

from payment of all taxes, national or local, licenses, and building permit fees and other
BUSINESS TAXES, except real property and capital gain taxes, import duties and other taxes on
imported articles.

Based on the above discussions and the important provisions of the laws mentioned,
entrepreneurial activities in the local levels and the countryside have not develop when all the
opportunities were provided by the government for local entrepreneurs We remain to be poor and
the budding entrepreneurs continue to search for available funds to finance their enterprises.

Analysis of the prevailing conditions and the business laws that grants these incentives
points to following failures in the implementation program:

1. An honest political will to implement the program to develop the countryside and the local
entrepreneur Information dissemination fails to cascade down to all sectors interested in the
program.
2. Vested interest groups take advantage of the program by establishing NON GOVERNMENT
AGENCIES in the disguise of helping the lowly business sector but it turned out that it is for their
benefit. They established financing agencies with interest rates that benefited their organization
Some NGO's lost interest after taking advantage of the government money and now they are
nowhere to be found to be persecuted for their acts of corruptions.
3. Banks and lending institutions required so many paper works beyond the comprehension of
small businessmen who don't have formal training as provided for the law.

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Module 4 -The Government and the Development of
Entrepreneurial Economy

THE PHILIPPINE ECONOMIC LANDSCAPE

The Filipinos remain to be poor because they have not totally developed the natural
potential of the land and its people for economic development. According to the latest survey,
many are still living below poverty line and that the government has to make dole outs in the
amount of 36 billion pesos for the poverty alleviation program. The next national budget has
programmed more money for the poor of this country.

DEVELOPMENT OF BETTER EMPLOYMENT OPPORTUNITIES

Employment generates income for the people with income the people will have money to
buy the basic needs of food, clothing shelter, and improved condition. This will develop the local
economy as factories will be producing basic necessities of life. They will be able to generate local
employment that will in turn pay taxes to the government to provide basic services like education
and health.
While employment is the hope for the needed component of economic development, it still
remains elusive for the many job seekers as the need has exceeded more than the demand. We
need skilled manpower and those who can be employed in OUTSOURCING COMPANY
Our college graduates who have undergone college with English as medium of instructions
are supposed to have developed the mastery of the language. In high school, English is the medium
of instruction and another four years in college yet we remain not qualified for call center agencies
for failure to deliver the necessary skills. The survey conducted on this area needs some fifty
thousand more employees especially those of other languages like Spanish and Japanese.
Our high school graduates lack skills for employment. We need welders steel man, masons,
skilled carpenters, and many others in the construction industry yet the supply of this manpower is
not enough. Electronic companies want to hire machine operators and expand their manpower
base for plant expansion yet many are not qualified for the position.

INVESTMENT IN NEW INDUSTRIES

Investment in new ventures especially in the countryside will develop the economy of the
nation. It will create more employment and other local business ventures. Investment of foreign
nationals should be looked into according to the provisions of law. Filipino entrepreneurs must be
partners in such venture to protect our w interest and those of the environment.
The agricultural sectors remain to be a wide are for investment. Our coconut resources in
the Southern Tagalog region and those in Mindanao are vast areas of development for exportable
products. Coconut husk and shells need new technology for more viable product for development
either for local industries and those of exponent market.

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 Coconut juice is beginning to find new markets abroad and we need to prove these in the
countryside where these resources are more abundant. Good vinegar comes from coconut or SASA
Palms better than synthetic and chemicals
The government should come in for intensive research for medicinal plants that abounds in
the countryside so that we can supply our population with local medicines. We need to sustain our
health program with cheaper local products so that we can get away from the bondage of branded
medicines that are dictated by foreign national Investment in medical research is investment in the
future of our nation and the better health program for the masses.
The vast agricultural areas that remain uncultivated could be planted to exportable high
value fruits and crops like mangoes, durian, jackfruit langka, and various fruits that could be
processed into dried chips or puree for export to other countries. The switch of taste buds from the
bottled drinks to more fruit flavours are opportunities for expansion.
Investments in the export processing zone for the manufacture of machinery components
and other electronic industries should be encouraged by the government for employment
opportunities of the expanding semi urban population. TESDA Training component should go
hand in hand with this development in investments that qualified manpower could be supplied in
these industries.

TOURISM AS ECONOMIC COMPONENT

The country is noted for its beautiful beaches and sceneries that attract people with money
and wealth for leisure and pleasure. The government should come in the development of these
potentials for more money and investment
Government investment in promotional activities abroad could do nothing to change the image of
this country if we do not improve the following areas which are component for the attraction of
more tourists:
1. Educational campaign among those involved in this industry should be put in place along the
following:
a. The Government Authorities at the Port of Entry, The port of entry is the show window of
the country especially for people who travelled widely to compare our facilities with those
countries where they spent their time. Our facilities should include among others special tourist
lounges where they could experience the usual Filipino hospitality.
b. A show window of our bamboo organ, our native dances and pictures of beautiful
Philippine scenery not only of Boracay but also other tourist destination, that remained
unexplored by other tourists. The usual Filipino smile of hospitality must be experienced in their
visit to our country.

IMPROVEMENT IN THE PEACE AND ORDER SITUATION

The tourist will not come to a country where their life and property will be in danger. The
taxi drivers serving the tourists should show the utmost courtesy and trust in their honesty of
service. Tourists must have peace of mind while in their hotels and places of accommodations that
no bad elements will harm them in their time of peace and enjoyment. Their money must be worth
in terms of service or the products that they bought for souvenirs.
There is more fun in the Philippines if tourists are happy to tell other tourists that they
enjoyed their stay and have not experienced any problem in their stay in this beautiful country.
Investors would not come in the country where other nationalities are not sure of their stay
and be protected of their investment. Peace and order is the prime responsibility of the
government Mindanao is the haven of investment. Investment in agriculture in this region is
profitable due to its weather condition and the rich natural resources.
No investment in the countryside would come in if the government could not control the left
leaning forces that collect revolutionary taxes from businessmen They will be paying more in taxes,
one from the government and another for outside force. This is the sad state of countryside
business activities and does not encourage investment
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DEVELOPMENT OF BETTER INFRASTRUCTURES

Airport and Road facilities for tourist destination must be improved by the government in
order to attract tourists. Incentives in the development of better hotel facilities and other
recreational areas must come from the government. Liberal interest rates must be given to local
entrepreneurs in the development of their areas and encourage foreign partnership.
Foreign investors in the tourism industry worldwide must discover that the Philippines has
all the potential for investment. Tourists would come in if proper exposure is also made by those
who have the expertise to develop areas of tourist attractions.
Government infrastructure program should focus in the development of more highways in
the countryside and better road facilities for the transfer of agricultural products to the urban
center. Traffic in the Metropolitan Manila and its surrounding areas are causing a lot of fuel
consumption and travel time.
A more viable system of transportation should be put in place to avoid this traffic condition.
The transfer of raw materials and finished products must be efficient. They must reach their
destination without delay especially perishable goods like vegetables fruits and fish products that
came from the countryside. Traffic caused by KUTONG COPS in the transport of important
commodities must be totally eliminated.

POLITICAL STREAMLINING

Too much politics in this country could be one of the greatest evil in the economic
development of this country. Politics is the entrepreneurial activity of those in power. Their
investment during election is their investment to amass more money when they come into power
though graft and corruptions. They hold valuable government contracts and projects and the
release of fund carries with it some grease money.
Billions of PORK BARRELS or in other words, countryside development funds are in the
hands of Congress and Senate. How they spend this money is not known. These are political "fish
rods that lure the electorate showing their banners of accomplishments. The same is true in the
local political arena even those in the BARANGAY level.
An honest audit for expenses of project would show that only fifty percent was spent for the
high profile claimed accomplishments. Political awakening for the electorate is needed for better
politicians.
The price of selling their votes during election, the entertainment given them in terms of
food and wine and the many dole outs are the making of politicians with bad intentions, Political
education and inculcating the values of honest election is another mandate for the educational
sector Political Dynasty abounds in all areas in the political arena. The same dirty politician hold
the wheels of government Elections should be done only once in years. People in politics should
serve only for one term and no more re-election.
No relatives could be candidate succeeding those in the seat of government. Let us give
chance for other people who have the honest intention of serving the government. Many would like
to make this country great but they do not have the means to fight the giants in the political arena.
The law on Political Dynasty has to be implemented and revised the politicians and their
relatives could only serve for one term. The root cause of our poverty is the making of too much
politics and proliferation of dirty politicians that amass the wealth of poor JUAN DELA CRUZ
Political will and honest intentions for the greater good of the country could be the vehicle for
economic development. Political transparency and better administration could propel economic
development and more investment could be venerated with honest government.
Banners and pictures of political figures now abound in almost all corners of the community
even one year before election. They are announcing and congratulating graduates. We can see
pictures and political posters on any occasions in the community for the needed name recall come
election time.

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 They already spent money for such nonsense campaign and this political investment is the
root road to graft and corruption. Politicians in power heralded their accomplishments with
posters while their real job is to do projects as they come from the people's money.
The national administration has stopped such practice but local politics still could not
follow for their personal interest. The time call for political maturity is badly needed for our
economic development. Laws regulating such practice could be the making of honest politicians,
who will dare control their personal ambitions.

INVESTMENTS IN PRODUCTION, TECHNOLOGY AND RESEARCH

The economic success of most countries in the western world and Japan is attributed to the
introduction of more advance technology in the production of goods and services. The more
advance technology would mean more goods from the production line. More production would
mean less cost as the economies of scale operate in the system.
More goods for consumption would mean lesser price for the buying public. Steady supply
of farm products to the urban center with the introduction of modern farming system would mean
price stability for the basic necessities for the growing Filipino population Increase in farm yields
would generate better income for the farmers and develop their living condition.
Technology transfer needed government support to make things happen. New farms
implement that would reduce labor cost in the cultivation of the land should be the investment
priority of the government better than the cash transfer program. Increase agricultural
productivity would remove the bondage of poverty in the countryside and this would minimize the
internal migration to the urban centres that causes imbalance in the distribution of population.
Our fishing industry needs new technology and the preservation of fish sanctuary needs
government attention. Modern fish culture should be introduced in the countryside to preserve our
dwindling fish resources. Dynamite fishing should be totally banned for it destroys our corrals and
fish sanctuaries Violators should be put to jail and there should be no political amnesty for
offenders,
More fish culture along our inland shorelines should be developed not only for the production of
BANGUS AND TILAPIA but also for the high value fish such as LAPU-LAPU, CRABS, SUGPO and
other high value fish products for local and export market.
The Bureau of Fishery and Aquatic Resources (BFAR) must do its job of protecting the
fishing environment and introduce new technology to increase fish production. More stringent
implementation of fishery laws must be made as an antidote to economic recovery in the fishing
industry.
Research and technology would make investments in the processing of more local products
into exportable products for the world market. Our local handicraft industry needs new
technology. Improve our local products so that we will be able penetrate the export market. More
research programs should be done by the government as these areas would improve the country's
economic landscape.

GOVERNMENT INCENTIVES TO SMALL AND MEDIUM ENTERPRISES

Most of the economic activities in the Philippine setting are found in the countryside and
operates as small and medium enterprises. We find them as retailers, dealers, buy and sell small
vendors and mostly sole proprietor entrepreneur. For some we call we call them the underground
economies that are included in the statistical bulletin of economic activity.
Small and Medium enterprises are the great contributors in the development of our
economy. More people are employed by small entrepreneurs and they contribute immensely to our
economy. We are poor as a people because we lack entrepreneurial interest as government imposes
a lot of restriction in the organization of business.
The Government should encourage the development of entrepreneurial activity in
transforming local resources into products or services that would generate the necessary
employment opportunities and improve the economic conditions of the people. For many years,
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the government administration has neglected the proper use of our material and natural resources.
The poor seem not to have the right to be rich and the government has neglected to give them the
opportunity to grow in economic activity, while big corporations and investments from foreign
countries are given incentives in terms of taxes, small enterprises that are just getting off the
ground Searching for more opportunities and capital are taxed immediately on the first day of
operation. If we are really honest in our intention of improving the economy of this nation, then
our officials should look into giving the Filipinos more incentives to small business entrepreneurs.

The following are suggestions for government incentives that would generate entrepreneurial
activities.

TAXES AND FEES

A. Small Entrepreneurs with Capital of Less Than One Million.

1. They should be free from tax for a period of at least 2 years. They have to learn the rudiments of
business activities and find viable means of operation. They need some take off points.
2. DTI Registration should be at two hundred pesos, Municipal licenses and permits should not
be more one thousand pesos and BARANGAY PERMITS should not be more than one
hundred pesos.

B. Entrepreneur with Capital Base of More than 1 Million to 5 Million.

1. Tax free for a period of one year
2. DTI Registration - P500
3. Barangay Permits-P200.00
4. Municipal Licenses and Fees- P5,000.00

C. Entrepreneur with Capital Base of More Than P 5000000

1. Tax free for 6 month
2 DTI Registration - P2,000.00
3. Barangay Permits - P1.000.00
4. Municipal Permit and License Fees-P10,000.00

These enterprises shall pay regular taxes and fees as imposed by the regulating agencies of
the Bureau of Internal Revenue and the Municipality after the expiration their period of
exemption. The government has to generate the necessary funds for development of the
community. Government should conduct the necessary audit to make them pay the right taxes as
most entrepreneurs also make false statement of income to avoid the payment of right taxes.

STABILITY IN THE PRICE OF GOODS AND SERVICES

While prices dictate the world economy and the fluctuation in the exchange rate, the
government must support price stability as it is an important component in the growth of the
business sector.
There are two opposing components in the foreign exchange rate. When the value of the
dollar goes higher the exporter are happy as they get more for their products, when it falls the
importers are happy as they enjoy lower cost of imported materials.
The market forces in the exchange rates are conditioned by the ability of the government to
make balance in the growth of export and the control of imports. Balance in the supply of foreign
reserves stabilizes the exchange rate of the country that will result in the stability of prices. The
flow of dollars to the country in terms of remittance from OFW is another factor in the stability of
our dollar reserves.

SMUGGLING

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 Smuggling mans an outflow of dollars without government control and it is a deterrent to
the growth of our local industries and our economy development. Strict government control on
these activities could develop our local industries and our economy. Smuggling of garlic, onions
and other vegetables from China is deterrent to improvement in the agricultural sectors as prices
are beyond the production cost of the local farmers who were not given incentives by the
government. Smuggled imported shoes from China and Korea killed the shoe industry in Marikina
and other show producing towns of Laguna. Taxes from these imported goods could be turned into
production incentives for small business entrepreneur that are trying hard to compete with foreign
product.
The entry of foreign products in the country is the making of powerful economies of the
world. They impose the FREE TRADE AGREEMENTS and GATT-Government Agreement on
Tariff and Trade for the entry of imported products.
While they could produce more products due to the introduction of more mechanized
technology and enjoy production through the economies of scale, poor developing countries could
hardly produce products of such magnitude. Their cost of production is very much higher and
therefore competition is in favour of rich countries. Another factor is that we love imported
products more than local products.
Smuggling is the business of the powerful and the influential in the government Cutting
them from the roots is a difficult task for the officials that need grease money for the election
Support for the entrepreneur in the local setting is needed by eliminating or at least cutting to the
minimum the elements of smuggling.
Competition with smuggled goods would not make our local industries grow. The
government must start to solve this problem of smuggling and corruption and support the local
entrepreneurs in our sincere efforts to develop the economy of this country. Today is high time as
tomorrow may be too late.

ENTREPRENEUR AND SOCIO-ECONOMIC DEVELOPMENT

The development of the nation economic activity is the making of small and medium
enterprises mostly located in the countryside. They contribute to the economy of big corporations
as they are also consumers of their production. It is the entrepreneur who develops new products
and makes innovation that becomes the backbone of more economies.

The following are the contributions of the Entrepreneur in our Socio Economic
Development:

1. The Entrepreneur Provides Employment,

Employment generates income and those employed pay taxes to the government which in
turn gives benefits the social and educational needs of the greater population. Those with income
through employment become less burdensome to the government.
They pay Medicare contributions and send their children to private schools. They enjoy
Social Security System benefits that make them self-sufficient on their retirement age. The enjoy
housing benefits from their Pag-ibig funds and housing become affordable,
2. The Entrepreneur Pay Taxes.
Entrepreneur pays taxes in the form of real estate tax, sales tax, import and export tax, and
permits from the local and national government.
Taxes collected from the entrepreneur pump up the development of better communities in
terms of better road facilities, better school buildings for the masses, and other social services.
With the taxes paid the government could maintain better peace and order situation as police and
military personnel could better protect the people.
3. The Entrepreneur Provides New Lifestyle and Pleasures.
Product innovation and development is the making of entrepreneurs Mobile phone is the newest
contribution of the entrepreneur to make a new life style for more Filipinos. Communication
between individuals and business became so easy and handy as everyone enjoys new innovation.
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 New technology like computers and other household conveniences are the results of
entrepreneurial geniuses that turned our life to new life style and pleasures. They provide life
convenience beyond the imagination of man. Entrepreneurs do not stop searching for better
products and services.

4. The Entrepreneur Improves the Capital Base of the Economy.

The entrepreneur mobilizes economic activity as the circulation of money which pumps up
the economic development of the community. Capital investment generates profit. Profit in return,
is growth in investment base that will propel more business activities.
Entrepreneurs do not keep their money in the piggy banks or make this as idle deposit in
banks. The greater money in circulation the greater is the economic activity of the nation. More
investment generates more employment opportunities for the people.
5. The Entrepreneur Creates People Empowerment and Social Mobility.
Entrepreneurs accumulate financial resources that give them social power in the
community. They can afford to buy some personal luxuries of life. They acquire new life style of
travel and pleasure. They make new houses and invest in real properties that make them respected
in the community.
It empowers them to make decisions related to the wise use of money. Their high income
differentiates them from those employed as their life styles become more diverse and complex
Empowerment makes entrepreneur the idol of community for their innovation and hard work.
6. The Entrepreneur Provides Healthy Competition.
Healthy competition provides people with choices of new products or better services.
Entrepreneur seeks better products and develops new ones that will satisfy their target customers.
Competition develops pride for the entrepreneur that their product or service is superior from the
other.
The entrepreneurial ego of human superiority in the development of new product or service
drives the entrepreneur to more innovation and development hence the greater good cascade down
to the consumer who wants new products and services.

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