Lesson 4

The Filipino Entrepreneur

Introduction

Entrepreneurship plays an essential role in the economic development

of the Philippines. It involves creating, organizing, and managing businesses
to pursue innovative ideas and seize market opportunities. Understanding
its current state in the country is vitally important for policymakers,
investors, and aspiring entrepreneurs alike; this article offers an overview of
this dynamic entrepreneurial scene in the Philippines by discussing factors
that foster its development, its contribution to economic growth, government
support for entrepreneurs as well as their challenges encountered along
their entrepreneurial journeys.

How Entrepreneurship is Viewed in the Philippines

Entrepreneurship in the Philippines has become an increasingly

viable career path and means of economic advancement, and more
individuals have taken an interest in starting their businesses.
Entrepreneurial spirit can be fostered through societal expectations; stories
of successful self-made entrepreneurs motivate others to follow their dreams
and take steps toward realizing them.

Factors That Stimulate Entrepreneurship in the Philippines

Several factors contribute to the growth of entrepreneurship in the

Philippines:

 Economic Conditions and Market Opportunities: The

country’s favorable economic conditions, including a growing
middle class, increasing consumer demand, and untapped
market segments, create attractive opportunities for
entrepreneurs.

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  Access to Capital and Funding Options: Efforts by financial
institutions, government programs, and the emergence of angel
investors and venture capital firms have improved access to
capital for entrepreneurs in the Philippines.
 Supportive Entrepreneurial Ecosystem: A vibrant ecosystem
comprising business incubators, accelerators, co-working spaces,
and mentorship programs critically supports aspiring
entrepreneurs, fostering innovation and knowledge exchange.
 Technological Advancements and Digitalization: The rapid
rise of technology and widespread internet access have opened
up new avenues for entrepreneurship, enabling the creation of
digital startups and online businesses.

History of Entrepreneurship in the Philippines

Entrepreneurship in the Philippines has an extensive and vibrant

history dating back to pre-colonial times. Early entrepreneurial activities
included agriculture, trade, and craftsmanship. The country’s history of
colonization and post-independence policies significantly influenced
entrepreneurial practices. Over time, entrepreneurship has evolved to adapt
to changing economic landscapes and global trends.

Status of Entrepreneurship in the Philippines

The Philippines has witnessed a surge in startups, small and medium-

sized enterprises (SMEs), and social enterprises. These ventures operate
across various sectors, including technology, e-commerce, agriculture,
tourism, and creative industries.

Growth and Trends in Startups and Small Businesses

Startup ecosystems, such as those in Metro Manila and Cebu City,

have experienced significant growth. Innovative business models, disruptive
technologies, and entrepreneurial talent have contributed to the flourishing
startup culture.

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Industries and Sectors with Notable Entrepreneurial Activity

The Philippines has seen entrepreneurship thrive in information

technology and business process management (IT-BPM), food and beverage,
retail, tourism, and sustainable and social entrepreneurship.

Contributions of Entrepreneurship to the Philippine Economy

Entrepreneurship makes substantial contributions to the Philippine

economy:

 Job Creation and Employment Opportunities: Small- to mid-

size enterprises (SMEs, microenterprises, and startups) are
significant drivers of job creation in industries with labor-
intensive activities, acting as vital forces against unemployment
and underemployment rates. Entrepreneurial ventures play an
essential role in combatting such rates of underemployment.
 Innovation and Technological Advancement:
Entrepreneurship promotes innovation by encouraging the
creation and adoption of novel technologies, processes, products,
and solutions. Startups and SMEs often provide industry growth
through pioneering innovative solutions, thus contributing to its
overall competitiveness and expansion.
 Impact on GDP and Economic Growth: Small and medium
enterprises (SMEs) comprise a significant segment of Philippine
society, contributing significantly to gross domestic product
(GDP). Their entrepreneurial activities stimulate economic
development through increased investments, productivity gains,
and competitive advantages.
 The Role of Entrepreneurship in Poverty Reduction and
Socio-Economic Development: Entrepreneurship gives
individuals, particularly marginalized communities, the power to
improve their socio-economic status through income-generating
opportunities that promote inclusive growth and decrease
poverty.

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The Philippine Government’s Support for Entrepreneurship

The Philippine government recognizes the importance of

entrepreneurship and has implemented several initiatives to support its
development. The Department of Trade and Industry (DTI) and other
government agencies have initiated programs, such as Small Business
Corporation’s financing assistance and the Go Negosyo program, designed to
offer financial and technical support to entrepreneurs.

1. Financial Support and Incentives for Entrepreneurs

To encourage entrepreneurial activities and foster the growth of

existing businesses, the government provides grants, loans, and tax
incentives to promote entrepreneurship while drawing investment dollars to
existing ventures and expanding them further. Such measures aim to lower
barriers to entry while increasing business flexibility.

2. Policies and Regulations Supporting Entrepreneurship

The government has implemented policies that streamline business

registration processes, promote fair competition, and protect intellectual
property rights – providing a favorable environment for entrepreneurial
activities.

3. Partnerships with Private Organizations and Institutions

Collaborations among governments, private organizations, and educational

institutions help foster entrepreneurialism by offering mentorship, training
courses, access to networks and resources, as well as network support.

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Challenges Faced by Filipino Entrepreneurs
 Access to financing and capital: Limited access to capital and
funding sources, especially for early-stage ventures, poses a
significant hurdle for entrepreneurs in the Philippines.
Addressing this challenge requires innovative financing models
and increased collaboration between financial institutions and
entrepreneurial support organizations.
 Limited market opportunities and competition: Highly
competitive markets and limited access to larger markets can
impede the growth of entrepreneurial ventures. Diversifying
markets, leveraging digital platforms, and enhancing market
linkages can help overcome these challenges.
 Regulatory hurdles and bureaucratic processes: Cumbersome
business registration procedures, complex regulations, and
administrative red tape can deter potential entrepreneurs.
Streamlining bureaucratic processes and reducing regulatory
burdens are crucial for fostering a conducive environment for
entrepreneurship.
 Skills and knowledge gaps: Developing entrepreneurial skills,
business acumen, and technical knowledge remains challenging
for aspiring entrepreneurs. Strengthening entrepreneurship
education and training programs can bridge these gaps and
equip entrepreneurs with the necessary tools for success.
 Infrastructure and logistical challenges: Inadequate
infrastructure, mainly in rural areas, can hamper
entrepreneurial activities. Improving transportation,
telecommunications, and access to utilities can enhance
connectivity and enable businesses to thrive in all regions of the
country.

Innovative Strategies and Solutions Used by Filipino Small Business

Owners

Even though small business owners in the Philippines face many

unique obstacles, many are finding effective strategies and solutions to meet
them and thrive. Here are a few successful examples:

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 1. Collaborations and Partnerships

Small business owners are teaming up with other businesses – both big and
small – in order to form mutually beneficial relationships that offer them
both mutual advantage. For example, a local bakery could team up with a
coffee shop so both could offer each other’s products and increase foot
traffic together, expanding both customer bases while expanding revenue
streams.

2. Digital Presence

Establishing an online presence for any business – big or small – is

becoming an essential aspect of doing business today. Small business
owners in the Philippines recognize this truth, with many realizing the
necessity of maintaining websites and social media pages to reach more
customers or even going as far as creating e-commerce platforms to sell
products online and increase reach even further.

3. Technology Adoption

Small business owners are discovering innovative ways to use technology in

their operations in order to increase efficiency and reduce costs. Some have
taken to using mobile payment systems for faster transactions, while others
utilize cloud-based accounting software for inventory and accounting
management.

4. Community Assistance

Small businesses rely heavily on their local communities for support. By

engaging customers and building relationships through events and
promotions, as well as offering tailored customer service that keeps
customers coming back, small business owners are tapping into this vital
source of help for success.

Real-life examples include the “Barkada” system – a Filipino term meaning

the close group of friends – where small business owners collaborate

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together to promote and support each other’s businesses. Another is using
social media platforms like Facebook or Instagram, where small business
owners can showcase their products while engaging with customers directly,
and crowdfunding platforms have even helped some entrepreneurs raise
funds for their ventures.

These strategies and solutions have enabled small business owners in

the Philippines to overcome the challenges they encounter and make a
significant contribution to the economy. Through partnerships, digital tools,
and community support systems, small businesses are able to expand and
create job opportunities, ultimately leading to the overall economic
development of the nation.

Strengths of Filipino Entrepreneurs

1. Filipino entrepreneurs have what we might call street-smarts and a

great deal of common sense. They are practical thinkers. They make
decisions based on what they know about human nature from
experience. They are not only able to come up with good products but,
more importantly, they know how to relate to their customers and give
what their customers want. You really cannot learn such skills from a
book or in a classroom.

The practical knowledge that one gained by relating to actual

customers and trying your own hand at a business. In other words,
entrepreneurs develop their street-smarts and sharpen their common
sense through experience. They learn from both their successes and their
mistakes. That’s what makes them effective entrepreneurs.

2. Filipino entrepreneurs are also practical when it comes to money. They

make sure that they get maximum profit for the lowest possible cost.

3. Passionate about business. When a Filipino entrepreneur decides on

what business he will establish, usually it will be related to something
he or she is passionate about. This passion drives him to learn
everything possible about the products or services he is offering to
customers. The same passion also gives the Filipino entrepreneur a
strong commitment and involvement in his enterprise.

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 Filipino entrepreneurs are all in business to earn for themselves
and their families. However, the most successful ones have the passion
that fuels their minds, emotions and bodies to make the business grow.
This passion reaches the point where the business in no longer just
about the bottomline; the business itself brings fulfillment and happiness
to the entrepreneur. This proves that if one is passionate about one’s
enterprise, then one will find the resources to make it successful for its
own sake.

4. Confident and self-reliant. The Filipino entrepreneur is always hands-

on and self-reliant. When he is just starting out his business, he is
practically able to do everything involved in running it-from finding
the best suppliers to renting the place of business, to the marketing,
selling and customer relations, and even accounting. All this would
not be possible without the entrepreneur’s supreme confidence in
himself or herself.

5. Filipino entrepreneurs trust their own judgment and their own capacity
to run their businesses. They are able to take calculated or even
daring, seemingly unwise, risks. They know that while they can get
the best advice, the best research, ultimately, the success of the
business depends on their own judgment.

6. Hard-working and goal-oriented. No one can doubt how hardworking

the Filipino entrepreneur is. His involvement in his business is nearly
absolute, to the point that his personal time for himself and his loved
ones is compromised. He is also goal-oriented, and has the discipline
to set smaller goals that he will accomplish in order to meet his final
objective.

7. A leader and an innovator. The most successful Filipino entrepreneurs

have excellent leadership skills. He is able to convince and influence
his employees and his customers positively. He is also able to
innovate-to come up with novel solutions when a challenging situation
arises.

8. Value-oriented. Finally, the Filipino entrepreneur has a set of values

that guides him in doing business. The greatest value for a Filipino
entrepreneur is his family.