GROUP 3

Effects of Contemporary
economic issues affecting the filipino
entrepreneurs
ENSOMO SALUBRE
KUA VICENTE
CATURLA YU
CONSIGNA
ENTREPRENEURSHIP

LET’S RECALL !
Entrepreneurship is
the art of turning an idea
into a business.
 What do entrepreneurs do?
Entrepreneurs gather and then
combine all of the resources
required to turn an innovation or
an idea into a successful
business - money, people, a
business model, and a strategy.
 Contemporary
economic issues affecting the
filipino entrepreneurs
I. INVESTMENTS &
INTEREST RATES
 INVESTMENTS
the cost of purchasing physical assets
like plant, machinery, and equipment (also
known as fixed investment) as well as stocks
(also known as inventory investments)
 INVESTMENTS AND
INTEREST RATES
- Interest rates are important in expanding capital
stock, which has an impact on investments.

the higher the interest rate, the lower the quantity of

investments; the lower the interest rate, the higher the
quantity of investments
 EFFECTS TO
ENTREPRENEUR
Low interest rates stimulate more entrepreneurs to
invest, but high interest rates limit entrepreneurs'
ability to establish a business in the country.
Addressing widespread poverty is the single most important policy challenge facing
the Philippines. Not only is poverty high when benchmarked against countries in
Asia, but also the rate of poverty reduction has been slow. While the Philippine
economy has grown at an average of 6 percent for the last five consecutive quarters
(since 2012), poverty incidence remains above 20 percent of the population. The
critical challenge is to spread the payback of this huge economic turnaround among
the people, especially the poorest of the poor. They should feel the benefits of the
growing Philippine economy.

Entrepreneurship can provide the solution by creating wealth, jobs, and social
empowerment. If we are to address the issue of poverty with some degree of
success, history tells us we have no choice but to actively encourage entrepreneurial
ventures
II. RENTALS
 RENT
- It usually refers to the temporary use of property for a
particular period of time.

- Land, which is a fixed component of production, has long

been connected with rent.

The idea of rent is established out of the scarcity

of land.
 EFFECTS TO
ENTREPRENEUR
Rental fees are recorded as an expense on the income statement,
implying that the larger the location/space, the greater the cost. Take
into account the location; renting in cities is more expensive than
renting in rural areas. For example, the monthly rental charge for a 100
square meter property in Surigao City is P50,000.00, but the same
space in Butuan Cit costs just P25,000. When it comes to renting, the
size and location are crucial.
III. MINIMUM WAGE
 MINIMUM WAGE
It refers to the lowest salary allowed by law, which, if
provided by an employer, will result in a government
penalty. The Department of Labor and Employment
(DOLE) in the Philippines has issued a salary order
for minimum wage earners effective January 1, 2020.
how was minimum wage
determined?
Minimum wage rates are decided by considerations such as
the poverty line, current wage rates as established by the
Labor Force Survey, and socioeconomic indicators (such as
inflation, employment data, and Gross Regional Domestic
Product, among others), all of which help to safeguard
employees.
 EFFECTS TO
ENTREPRENEUR
Above and beyond the minimum wage, there is voluntary
productivity-based compensation, which promotes individuals
and businesses to become more competitive and productive by
rewarding employees with additional compensation depending
on the quality of their work.
 Contemporary economic issues facing the
filipino entrepreneur through minimum
wage

✓ Minimum wage - lowest wage per hour that a worker may be

paid as mandated by the federal law.
✓ Wages - another factor that drives up a business operating
expenses.
✓ National Wages and Productivity Commission -
regularly reviews minimum wage rates across sectors.
✓ Tax - compulsory contribution to state revenue, levied by the
✓ Percentage tax -paid by the entities exempt from VAT with gross
annual sale not exceeding a limit prescribed by the BIR. 3%
✓ Capital gains tax - imposed on the sale of capital assets such as
real estate properties and stocks.
✓ Value added tax - a tax on sale, lease and importation of goods
and services.
✓ In c om e t ax - i s t h e c om m on t ax f i l e d by e m pl oy e d an d
selfemployed individuals.
✓ RFP - register file pay
✓ COLA - cost of living allowance
IV. TAXES
 TAXES
- Taxes are the lifeblood of the
government. It fuels the social
services provided by the government
to its citizen.
 TAXES IN THE PHILIPPINES
-The National Internal Revenue Code, the Tariff and Customs Code,
and various specific legislation are used to assess and collect
taxes at the national level. Income, indirect (value-added and
percentage taxes), excise, and documentary stamp taxes are the
four major types of national internal revenue taxes managed by
the Bureau of Internal Revenue (BIR).
 EFFECTS TO
ENTREPRENEUR
Because high taxes are viewed as an extra expense to the
entrepreneur, they tend to discourage investment. Low taxes
entail fewer government projects, such as school buildings,
roads, and bridges, as well as the provision of social services to
citizens.
How can entrepreneurs gain
from tax?
The government offers new businesses tax breaks of up to six
years and vat (Value-added tax) exemptions on goods
purchased by a company that will export 100 percent of its
goods.
Thank you for
listening!