The Philippine

Environment for
Entrepreneurship
 Is it important for small business entrepreneurs to know the business
environment?
 What is the Environment for SMALL BUSINESS Entrepreneur?
 How does this environment affect the BUSINESS OF AN Entrepreneur?
ENVIRONMENT FOR A BUSINESS
ENTERPRISE
Business Environment
 External Factors
Environment may be healthy or unhealthy
Economic System and Other Conditions

Phases of Business Environment

• Economic
• Legal
• Political
• Socio-cultural
RATIONALE FOR PROMOTING MICRO,
SMALL, AND MEDIUM ENTERPRISE
 Relative ease in setting up.
 Employment generation.
 Flexibility and lower capital cost per job created.
 Provision of niche services that may not be profitable for large

businesses.
 Distribution of income
 Utilization of Local Resources
 Export Earnings
 What is MSME?
MSME’s
 Micro, Small and Medium Enterprise
 Defined as total asset value and number
of employees
 Micro enterprise most numerous
enterprise (91.8%)
followed by Small enterprise (7.5%)
Did you know that in the Philippines…

In 2019, MSMEs generated a total of 5,510,760 jobs or

62.4% of the country’s total employment. The micro
enterprises produced the biggest share (29.8%) closely
followed by small enterprises (25.2%) while medium
enterprises were far behind at 7.4%. Meanwhile, large
enterprises generated a total of 3,315,575 jobs or 37.6% of
the country’s overall employment.
 The Philippine MSME
Development Plan
 Intense foreign competition
 Critical issues such as improvement of the management

capability of MSME’s and business environment for

MSME’s growth.
 Government and private sector resources and partnership
 Innovation in all aspects of operations and
 Creation of more business opportunities
 Vision, Mission
and Goals
 Vision

- to create globally competitive MSMEs in the new industrial economic

environment.
 Mission

- to develop excellently- managed enterprises served by a pool of professional

partners.
 Strategies

-Build up distinctive competence ; harness efficient technologies ; establish

relationship partners.
 Strategic Development Goals
The long-term development goals are :
1. To increase the contribution of MSMEs
2. To be at par with or be better that the performance level of comparable
The strategies for MSMEs include :
3. Increased production output and sales
4. Increased export growth
5. Increased productivity
6. Generate new creative entrepreneurs and progressive micro-
enterprises
 SME Development Plan
( Small and Medium Enterprises)
A. Enterprise-level strategies
1. Provide comprehensive support to entrepreneurs in terms of managerial and
technological capability
2. Provide business opportunities for development
B. Sector-level strategies
3. to strengthen the competitiveness of local industries
4. To provide services that support industrial linkages between local MSMEs and
leading industries
C. Broad-based level strategies
1. To improve access of MSMEs to financing
2. To improve the enabling business environment
3. To improve the implementations of policies and regulations
affecting MSMEs .
Magna Carta for Small enterprises
The BMBE Law
Consumer awareness program and fair trade advocacy
Incentive and policy measures foe development of business cooperatives
4. To
improve access of institutions to programs and capability
building for institutions.
Philippine Bureau of Food and
Drug
 Quality for all products especially food examine if
there are contaminants.
Also determines if products meet product standards;

otherwise it reject the whole batch.

GLOBAL ASPECTS OF
ENTREPRENEURSHIP
 Globalization
 known as “global capitalism”
characterized by free circulation of capital

worldwide and regulation by market forces or

“free trade” where there is an easy or free flow
of goods from one country to another because
the taxes has been lowered
 Why Go Global?
Companies that move into international business can reap many
benefits, including
 offsetting sales declines in the domestic market
 increasing sales and profits
 extending their products’ life cycles
 lowering manufacturing costs
 improving competitive position
 raising quality levels
 becoming more customer oriented
 Strategies for Going Global
Nine principal strategies
 Creating a presence on the web
 Relying on trade intermediaries
 Establishing joint ventures
 International franchising
 Using countertrading and Bartering
 Exporting products or services
 Outsourcing production
 Engaging in foreign licensing agreement
 Establishing international locations
 Barriers to International Trade
 Domestic barriers
 International barriers
 Political barriers
 Business barriers
 Cultural barriers
 INTERNATIONAL DEVELOPMENT
 Also known as global development is a wide concept
concerning the level of development on an international
scale.
 It is the basis for international classifications such as

developed country, developing country and least

developed country .
 Today , many events and developments abroad affect

our lifestyle including the way we conduct business.

 International Institution
1. World Trade Organization
o Only international organization that deals with the global rules of

trade between nations.

o Its main function is to ensure that trade flows as smoothly ,

predictably and freely as possible .

o Purpose is to help producers of goods and services, exporters and

importers conduct their business.

o Improve the welfare of the people of the member-countries
2. ASEAN ( Association of Southeast Asian Nations )
o Established on August 8 , 1967
o is an organization of countries in southeast Asia set up to promote

cultural, economic and political development in the region

o TAC ( Treaty of Amity and Cooperation ) – signed during first

ASEAN Summit February 24 , 1976

The Association represents the collective will of the

nations to blind themselves together in friendship and
cooperation and , through joint efforts and sacrifices ,
secure for their peoples and for prosperity the
blessings of peace , freedom and prosperity.
- The ASEAN Declaration, Bangkok 8 August 1967
3. AFTA ( ASEAN Free Trade Area )
o Initiated on the 4th ASEAN Summit in Singapore in

January 1992
o  is a trade bloc agreement by the Association of Southeast

Asian Nations supporting local manufacturing in all ASEAN countries

The primary goals of AFTA seek to:

 Increase ASEAN's competitive edge as a production base in the

world market through the elimination, within ASEAN, of tariffs and

non-tariff barriers
 Attract more foreign direct investment to ASEAN
4.APEC
( Asia Pacific Economic Cooperation)
o Isthe premier forum for facilitating economic growth ,
cooperation , trade and investment in the Asia-Pacific region
o Non-biding commitments , open dialogue and equal respect

for the views of all participants

o Had 21 members referred to as member economies.
o Established in 1989
o to further enhance economic growth and prosperity for the

region and to strengthen the Asia-Pacific community .

o Worked to reduce tariffs
“Bogor Goals “ of a free an open trade
and investment in the Asia-Pacific by
2010 for industrialized economies
and 2020 for developing economies

o Free and open trade and investment help economies to grow ,

create jobs and provide greater opportunities for international
trade and investment.
 Lending Institutions for
Developing Countries
1. The World Bank
 offers array of instruments including loans and

grants to finance poverty-reduction and economic

development efforts around the world.
 Two Types of Lending Instruments
Development Policy
Investment Loans
Loans
 used to finance goods,  provide quick disbursing
works, and services in external to support policy and
support of economic and institutional reforms.
social development
 typically run for one to three
projects in a broad range
years
sectors.
 typically run for five to

ten years.
Lending Institutions for Developing
Countries
2. The Asian Development Bank
 multilateral bank similar to the World Bank
 extends loans and equity investment to its

developing member countries in Asia for their

economic and social development.