essay about small business in the philippines

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The role small businesses will play in the Philippines’ economic recovery

MANILA, Philippines — Big businesses may control the stock market, but it is the start-ups and small businesses, or what economists tout as important influencers for growth, that keep the economy moving. For one, small businesses pose competition to previously stale with their innovative concepts and products. And because they operate locally, they create job opportunities with preference for local individuals, driving new job growth in a local town or city. Small businesses also have more flexibility and can be started by almost anyone with grit and a cutting-edge idea, making them more sundry in form, function, culture, and potential.

The global health crisis has greatly impacted the economy, apparent in the tourism, airline, hospitality, and even in the retail industry’s operation slowdown. Supply chains trade have been disrupted and as some businesses came to a halt, over three million Filipino employees lost their jobs due to the relentless plague of the pandemic crisis, according to the Department of Labor and Employment.

The numbers have it

The Philippine Statistics Authority (PSA) reported that Gross Domestic Product (GDP) has contracted in the Philippines during the fourth quarter of 2020, yielding a -9.5% contraction across the entire year. This is a vast change from last year’s growth, which saw four successive quarters of 5% growth and above.

2020’s GDP plunge in the Philippines is the largest on record since 1946, even topping the mid-1980s crash. Economic Planning Secretary Karl Chua states, “without a doubt, the pandemic and its adverse economic impact are testing the economy.” Yet, Chua likewise claims the nation is already seeing early signs of recovery with the easing of health restrictions and social protocols.

With the new year, the government is eyeing an economic rebound as stocks are seeing growth again in Manila, suggesting that larger companies may be experiencing a better recovery than small companies because of their easy access to credit and capital. Given that small and medium-sized enterprises (SMEs) account for 99% of registered businesses in the Philippines , along with providing 60% of the nation’s jobs, most workers and business owners are heavily affected by the current economic turbulence caused by lockdown measures.

Will Covid stand in the way of growth in 2021?

Despite being one of the fastest-growing economies in the world, the Philippines is still struggling to recuperate from recession. Some analysts believe the first quarter of 2021 will see continuous GDP contraction and a slow rise from the slump. With the recent arrival of the Covid-19 vaccines in the country and once lockdown measures are further loosened up for increase economic activity, everything will be looking up.

It may be a struggle to convince the public to take advantage of the government’s vaccination program following the Dengvaxia debate in November 2017, when the Department of Health suspended the school-based vaccination program after the controversy that at least 600 people, mostly children, died after obtaining a single dose of the Dengue vaccine, although not necessarily caused by the vaccine itself. Soon after, the Philippines have fallen to 70th place in countries’ confidence levels in vaccines. In fact, a poll conducted by Pulse Asia saw less than one third of the population are willing recipients of the Covid-19 vaccine.

But whether we believe it or not, the economy will expect a lot of promise only after a more comprehensive vaccination program is put in place as the government aims to vaccinate 70% of the Filipino population by the end of 2021, providing for ample herd immunity to reverse the risks for the remaining 30% who may refuse to be vaccinated. With a minimum faith and slow roll-out of the vaccines, President Rodrigo Duterte has expressed intent on spending almost 4.67 trillion pesos this year in order to drive growth, which would be over 400 billion more than in 2020. The World Bank has forecasted a 5.9% GDP growth rate in 2021 for the Philippines, which would be below 2019 levels.

The role of quick financing

Covid-19 has been reported to strongly affect 68% of SMEs in the Philippines, with only 13.4% slightly affected or not affected at all, while larger firms are more able to adapt to lockdown laws. Bigger supermarkets and groceries, for instance, remained open (it being an essential both for the population and economy) while traders operating in a smaller scale have either temporarily closed or filed for bankruptcy. Furthermore, bigger firms with significant cash reserves and those with strong credit ratings were more able to adapt business models that enabled them to sustain their business despite the limitations and changing restrictions. This is a contributing factor to the contraction of the Philippine economy, which relies on the activity of sole proprietors.

Another factor in the contracting Philippine economy is the limited credit supply. Carmen Reinhart, World Bank’s Vice President, has warned that a credit crunch is looming in the horizon. It is inevitable that when credit is in short supply from banks, businesses turn to alternative loan sources. One successful and popular method in the US, Europe, and Australia is quick-financing business loans .

Quick financing (also billed as alternative lending) is an automated way of lending money to SMEs. With automated scanning and quick interpretation of data, results can be produced in a matter of days, making credit scores, business plans, and lengthy meetings unnecessary. The Philippines is yet to embrace this alternative type of loan source.

Oracle’s Digital Demand studied over 5,000 consumers from multiple countries and found over 40% believed that non-banks are better equipped to assist SMEs with their monetary requirements. Alternative lenders, like quick-financing business loans, are predicted to play an increasingly influential role in the Philippines due to SMEs’ lack of access to traditional forms of credit.

However, a recent study examining 480 SMEs in Manila and Calabarzon showed that 40% of companies were lacking access to finance informal credit markets, proving there isn’t even a plan B for many businesses. This fact does not only hinder small businesses’ ability to pay their employees, but also limits their capacity for technological adaptation and advancement.

A seamless balance of quick-financing business loans and a capacity to quickly adapt to technological solutions this 2021 will provide better access to credit for SMEs and other start-up businesses and will pave the way, economists believe, for the recovery of the country’s economy. By offering innovative solutions to non-IT firms and accruing foreign investment, SMEs will continue to steer the economy to better this year—despite a time of unprecedented uncertainty—something that all Filipinos truly deserve.

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Promoting SME competitiveness in the Philippines: Compete, connect and change to build resilience to crises

Increasing the competitiveness of small firms in the philippines is vital to build resilience to shocks while promoting sustainable and inclusive growth..

Companies that were more competitive before the COVID-19 crisis were less affected by it, according to ITC’s SME Competitiveness Survey. Firms with a greater capacity to change – because of their skills, innovation and financial management – were more likely to adopt resilient or agile responses. Finally, those with better connections to their business ecosystem were better able to access the information and support they needed to survive the crisis.

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How To Start a Business in the Philippines: The Complete 15-Step Guide

Here’s the cold harsh truth about employment:

It’s a rat race and even if you win it, you still end up a rat.

A rat with no control over his schedule, income, and projects to work on.

I’m not saying everyone should leave their jobs en masse. Some people consider their jobs as a vocation and can’t imagine doing anything else.

But for others who are yearning for more freedom and feel stuck at their current jobs, there’s a great alternative–entrepreneurship.

The best part is you don’t have to start big. Even with a small capital, you can open a business in the Philippines and make it profitable through smart planning. This article will teach you exactly how.

How To Start a Small Business in the Philippines With Small Capital: A Step-by-Step Guide

Great things start from small beginnings.

When they started their businesses around WWII, Max’s Restaurant and National Bookstore were deprived of advantages. But with sheer persistence and great strategies, they eventually became household names.

The same is true for almost all the famous brands we recognize today.

Therefore, whether you want to supplement your current income or become your own boss someday, the only way to go big is to start with a small business.

Small business or small-scale enterprise is one that hires few employees and has a relatively smaller asset size.

In order for a small business to qualify for government assistance and incentives, it should have capital assets amounting from Php 3 million to Php 15 million and with employees numbering from 10 to 99 workers 1 . Anything below these levels is classified as microenterprise while businesses that exceed them are known as medium- to large-scale enterprises.

However, the consensus today is that micro, small, and medium enterprises all fall under the general term “small business”.

By starting a small business in the Philippines, you as the owner will pretty much wear several hats–from marketing and finance to production and management.

Hence, it’s crucial to arm yourself with knowledge about all these fields especially at the beginning when you still don’t have the means to hire specialists.

This article will teach you how to start a business in the Philippines with a small capital, no business experience, and little or no college education.

Let’s get the ball rolling.

Step 1: Know your “Why.”

Holocaust survivor Victor Frankl wrote in his book that “those who have a ‘why’ to live can bear with almost any ‘how'” .

Starting a business may not be as tragic as a Holocaust but it is certainly not a walk in the park either.

On one side, owning a business gives you unlimited opportunities to earn money , be your own boss, explore your creativity, help others, and build a legacy.

But there’s another side to the entrepreneurial coin: the risk of failure.

In addition to that, starting a business in the Philippines where unpredictability abounds will push you to go beyond your comfort zone. Success won’t come easily. Long hours of work, missed family times, and sleepless nights will hound you especially during the early stages.

And did I mention you’ll be juggling a lot of hats so you’ll be responsible not just for the welfare of your family but also for the livelihood of your own employees?

So, before taking the plunge, test the water first.

If you only want extra income , don’t resign from your job and look for a part-time job instead. But if you want complete control of your destiny, then it’s time to plan your exit. It doesn’t matter if you take baby steps; what’s important is you carefully weigh the risks and rewards and then make a decision based on your own judgment.

If you get discouraged, look at yourself in the mirror and ask the big “Why?”

As long as you know your purpose for starting a business, you can weather any challenges that life may throw at you.

Step 2: Understand What It Takes To Succeed in Entrepreneurship

You don’t need an MBA to start a profitable business in the Philippines.

However, life-long learning is at the core of successful entrepreneurship. You learn best from your own failures and the mistakes of those who came before you.

Another way to hone your knowledge is to take free or paid training courses designed for beginners. For example, the Philippine Trade Training Center (PTTC) and the U.P. Institute for Small-Scale Industries offer “start your own business” programs that will teach you basic principles of running a business.

We also recommend the following training centers/courses:

• Businessmaker Academy (1503A West Tower, Philippine Stock Exchange Building, Exchange Road, Ortigas Center, Pasig City).
• TESDA Online Entrepreneurship Training Program .
• Ultima EntrePinoy Center for meat processing, baking, and other food business courses (Nutrition Foundation of the Philippines Building, 107 E. Rodriguez Sr. Ave., Quezon City).
• Department of Trade and Industry Negosyo Center – Seminars and Workshops .

Entrepreneurial success takes more than just technical knowledge. Your business can only grow to the extent that you do . Hence, it’s important to also invest in personal development if you want your small enterprise to prosper.

According to Management Systems International 2 , there are attributes common among successful entrepreneurs that led them to the success they have today. These characteristics can be grouped into three clusters–Achievement, Planning, and Power.

Achievement cluster

• Opportunity-seeking – the ability to see opportunities and seize them as they come. For example, when people from your hometown are craving for donuts and there’s no single donut store that has been put up yet, will you be quick to act on this opportunity? An opportunity-seeking business person certainly would.
• Persistence – a trait that will allow you to stick to your vision even in the face of criticisms and failures.
• Commitment to contract – which means getting the job done on time and honoring your promises without any excuses.
• Risk-taking – or more specifically, taking calculated risks to minimize potential losses. A good business person doesn’t just invest in any venture without carefully studying the market and identifying flaws in the business model.
• Demand for quality and efficiency – a characteristic of great entrepreneurs who uphold excellence in everything they do and don’t just settle in a “puwede na ‘yan” attitude.

Planning cluster

• Goal-setting – a skill that enables you to clearly define your goals and withstand the pressures and struggles of today in the name of achieving these goals.
• Information-seeking – a quality you need in order to come up with informed decisions and calculated risks. When the future of your business is at stake, you gather only the best information from all the best sources–suppliers, experts, competitors, banks, and even government agencies.
• Systematic planning and monitoring – while planning gives you the opportunity to choose the right supplies, manpower, and materials to achieve your goals, monitoring allows you to fine-tune your plan to bring you closer to achieving your goals.

Power cluster

• Persuasion and networking – if you know how to leverage the power of persuasion, you can literally make everything you want to go in your favor: from persuading the bank to give you a loan to convincing your buyers that your product is worth a try.
• Self-confidence – if you don’t believe in yourself and your ideas, then no one else will. You can’t succeed in any undertaking if you have a deflated ego. Believe in your dreams and everything else will follow.

Step 3: Come Up With a Business Idea

Every successful business starts with one idea.

The problem, however, is many people think that a million-peso idea only shows up in a select few; it’s either you have it or you don’t.

While it’s true that some successful entrepreneurs got their ideas by accident, they are exceptions rather than the rule. For most of us, a winning business idea won’t magically fall into our laps so we have to look for it ourselves.

To start generating a list of business ideas, ask yourself the following questions:

What are the things you’re interested in?

Running a business can be tedious in the long run so you might as well choose a business that is in line with your interests.

Don’t worry if the idea has already been taken. Your goal, after all, is not to be original but to explore an already existing idea you’re interested in, turn it on its head, and make it better than what’s already out there.

Instead of trying too hard to be original, find ways to dominate an already existing market by offering better, cheaper, or faster products or solutions.

Do you have pain points in your life or problems that bother you that you wish could be solved?

Famous entrepreneur and Internet personality Gary Vaynerchuk believes that the best way to find the next great business idea is to stop looking 3 .

Instead, go through the daily grind of life with an open mind so that you can zero in on things that bother you when you encounter them. Chances are, you’re not the only one experiencing the same problem so if you figure out how to fix it, then you have a potential business idea.

The key here is to always have a problem-first approach; after all, the world doesn’t need more products but more solutions to their everyday problems .

What are your core skills or the skills you’ve developed?

You’re more likely to succeed in a business if you have the experience, knowledge, and skills that it demands.

Look back at your employment history and note the skills you’ve developed over the years that you’re both naturally good at and you enjoy doing. These can provide clues on what kind of business to pursue.

And we’re not just talking about skills that you’ve developed in your previous jobs; those that you’ve learned outside work are equally important and perhaps more reliable in helping you figure out what business to try. Since you enjoy doing them without any incentive to motivate you, then you can potentially turn it into a business you’ll never get bored doing.

What businesses are currently booming/trending?

First of all, there’s a difference between a business fad and a business trend. Whereas a business fad enjoys initial hype but proves to be short-lived, a business trend lasts longer as the consumers don’t easily lose interest in the product/service.

Apparently, your focus should be on the trending businesses because more people doing it means the idea is very profitable. In the Philippines, trending business ideas fall in any of these three categories: Food, online, or service.

Food businesses either focus on food manufacturing (i.e., creating your own products from scratch like what Eng Bee Tin did and other big names with humble beginnings in their founders’ own kitchens) or food trading which involves selling ready-made or frozen products like siomai, shawarma, etc.

Online home-based businesses are mostly done by professionals who sell their services instead of tangible products. These include virtual assistants, freelance writers, social media managers, bloggers, bookkeepers, graphic artists, and many more.

Last on the list are businesses in the service industry that are now thriving as more and more people become busier. Some of the best examples are laundry businesses , transportation/delivery services, pet grooming businesses, photography businesses, and wedding and events coordination businesses, among others.

In addition to asking yourself the above questions, you can further increase the number of business ideas you generate by reading this article: 100+ Best Small Business Ideas in the Philippine with High Profit.

Step 4: Conduct Market Research

Starting a business without doing market research is akin to entering an unfamiliar territory without any map to guide you.

But what exactly can you achieve with market research? The answer is knowledge. A wealth of information and insights about who and where your customers and buyers are; when they’re most likely to buy or use your product/service; who your competitors are; and how big is the potential market demand for the product/service you’re currently developing.

In other words, everything that can help your business start off on the right foot.

This step has three components:

• Market segmentation;
• Market research;
• Competitor analysis.

To begin your research, you have to know first that your business doesn’t necessarily need to appeal to everyone . It’s easier to focus on one segment of the market first and then expand later on.

In order to find this target market, you need to divide the general market into smaller subgroups. Also known as market segmentation, this process involves grouping the market according to location, demographics, behavior, or other variables that make sense for your business.

Let’s say you’re planning to develop and sell a mobile phone. You can find your market either at shopping malls or online shopping sites where mobile phones are being sold.

Through market segmentation, you can divide this market into different groups according to their motivations in buying a mobile phone. There are the housewives who only need phones with the most basic features since they’re only using them to call their loved ones; the students who look for phones with cameras and other features that will help them with their studies; the yuppies who prefer phones with a flashy look and more features to meet their professional needs; and so on and so forth.

Another example would be a business that will manufacture its own soap. There’s a huge market for soap but what type of soap exactly?

With the use of market segmentation, you’ll be able to identify different segments of the market with varying demands for a specific type of soap. There are the buyers who want to achieve whiter skin; people with sensitive skin who want to get rid of their pimples; people who just want a skin-friendly moisturizing soap; those who want scented soaps; people who prefer herbal soaps; etc.

After segmenting the market, it will be easier for you to figure out which specific group or type of buyers will be the target of your marketing efforts.

Once you’ve identified your target market, it’s time to put it under the microscope and get to know your prospective customers a little bit better.

This is when the market research comes into the picture. You employ tools and techniques to reach out to your target market and discover what makes them tick.

And if the sound of “market research” intimidates you, don’t worry. Although big companies require an equally big budget to recruit a huge number of respondents for their market research, small entrepreneurs can also gain access to a wealth of valuable information about their target markets without breaking the bank.

The following are the most common techniques you can use to conduct low-cost market research:

1. Survey – is the old-school way of collecting data from a sample group that is assumed to be the representative of the whole. You can use this method to learn what people think about the products currently available in the market and how you can create a better one in terms of quality and price.

Just make sure the survey participants are neither your friends nor relatives because of the biased opinions they tend to provide.

The questions in the survey should explore the factors the respondents consider when buying; what they like or dislike about the current products in the market; the kind of improvements they would like to see; and the price of the product that is reasonable for them.

2. Observation – is probably the crudest form of market research but one that remains effective nonetheless.

It can be in the form of contextual observation where the entrepreneur pays close attention to a sample of the target market as they use or experience a certain product or service. Other entrepreneurs take matters into their own hands and do a mock journey where they put themselves in the consumers’ shoes by buying and using the product/service themselves.

3. Prototyping – known in layman’s terms as simply “taste test” or “sampling”, this method allows the entrepreneurs to put their minimum viable product (or the early version of their product, warts and all) out there and use the customers’ feedback to further improve the said product as they go along.

Market research is a critical part of your initial entrepreneurial journey as it will help you realize whether there’s a demand for your product or not and if there is, who is most likely to buy it, how many they are, where they’re located, and how you can promote your business to them.

It will also identify both your direct (i.e., businesses selling the same product/service) and indirect competitors (i.e., businesses selling different products/services but are in the same category as you).

Speaking of competitors, the competitor analysis is just as, if not more, important than the market research itself.

Not finding time to learn more about your competitors, what they offer, and how much they cost will put your business on the losing end. This is because competitive analysis helps you discover ways to give your business a competitive advantage which will effectively prevent your target market from choosing others over yours.

Aside from collecting and analyzing available data about your competition, you can also go the extra mile and buy your competitor’s products to test them yourself. This way, you can once again put yourself in the customer’s shoes and gain ideas on how you can improve their experience through a product that only your business can provide.

Step 5: Decide Who Will Run the Business

Most starting entrepreneurs build their businesses on their own as a single proprietorship. However, entrepreneurship can be a lonely endeavor so there’s nothing wrong with starting a business with a partner or a group of people.

The following are the different types of business according to ownership and the pros and cons of each to help you decide which path to take:

• Single proprietorship – is the most basic type of business wherein you basically run the whole show. While it’s easier to set up and you’re free from outside interference, this type of business is also the most demanding and puts you at high risk for burnout. The growth of your company is also limited by your financial means.
• Partnership – a business owned by at least two parties, this is also relatively easier to set up than a corporation and has the advantage of having the check and balance maintained by the co-owners. Businesses under a partnership tend to grow faster than sole proprietorship since there is more than one investor. However, more owners mean more chances of having a conflict.
• Corporation – is a business run by at least five people. Like a partnership, a corporation can also grow faster because of the number of shareholders and is also highly flexible because all the owners can share the responsibilities. The downside is corporations are taxed more than sole proprietors, more difficult to set up, and have a tendency to institutionalize a bureaucracy.

To help you further in deciding which type of business structure to pursue, I recommend reading this section in our business registration guide . It contains crucial information on how to choose the right business structure based on your intention, risk appetite, capacity to raise capital, and other factors.

Step 6: Write a Business Plan

Ever heard of the saying “if you’re failing to plan, you’re planning to fail?” Nothing can prove this better than starting a business where your own (or your investors’) hard-earned money is on the line.

This is why writing a business plan is crucial regardless of the size of the business you’re planning to start.

A business plan is a document that will show how your business will evolve from start to finish . It offers a closer look into your business model and helps identify any loopholes in its profitability, thereby giving you a clearer picture of whether the business is worth pursuing or not.

Specifically, a business plan will help you accomplish the following:

• Prevent or eliminate the risk of losing money invested in businesses that are proven to be lacking in demand.
• Reduce total expenses that would not have been possible without a business plan to help you examine details that are easily overlooked. Remember, every peso counts when you’re starting a business in the Philippines so you don’t want it to be wasted on something not essential.
• Establish a healthy cash flow for your business especially during the lean and peak months. Cash is king when it comes to running a business for without it you’ll always be on the verge of bankruptcy . Through a business plan, you can create a contingency plan to make sure your business will stay afloat when the demand slows down and will be prepared enough to handle increased demands during peak seasons.
• Set goals in terms of the total number of sales, revenues, or expenses and measure the actual performance of your business against these set goals.
• Convince investors or lending institutions to lend you money to start your business. No sane person will easily hand you the capital for your business unless you can provide a well-thought-out business plan containing details on how the business will work and earn back the initial investment.

If you truly know your business inside out, it’s not that hard to write your own business plan. The more complicated and larger the business, the more pages the business plan would require.

Should you need assistance in writing a business plan, you may approach the following people/institutions:

• SME Counselors from the Department of Trade and Industry (DTI);
• Freelance consultants who charge lower fees than consulting firms because they don’t deal with big overhead expenses;
• Accountants/bookkeepers;
• Business professors;
• Extension offices of business schools like Baguio’s St. Louis University Extension Institute for Small-Scale Industries.

As for the content of the business plan, it must depend on what kind of enterprise you’re planning to start. No two businesses are alike so the business plan should be written according to the uniqueness and conditions of your business.

In general, however, the following sections are considered basic components of a good business plan:

• Title page – contains the name of your business and other basic details of your enterprise.
• Executive Summary – provides an overview of what the company or business idea is all about, the problem the business is going to solve, the solution your business will provide, and how it will fit into the marketplace. This section will give investors an idea of whether to invest or not so make sure to leave a great first impression.
• Business description – explains the type of business you’re planning to start, the industry it belongs to, and what it will look like in the future.
• Market strategies – describe how big the market you’re trying to penetrate, who your target market is, and how you plan to sell to this market.
• Competitive analysis – explores who your competitors are, their strengths and weaknesses, and how your business stack up against them. Essentially, this section shows what makes your business different from everybody and how you’re going to use this to beat your competitors.
• Design and development plan – determines what exactly is your product or service and how you will develop it over the short term, medium-term, and long term.
• Operations and management plan – describes how a day in your business will look like.
• Financial plan – discusses in detail where the money to fund your business will come from and whether it will be self-funded or financed by outside investors. It also covers the projections you should create and what factors you should take into consideration; how much financing you need to start the business; how long it will take to pay back the investments (ROI); how will the ownership be divided, if applicable; and your backup plans in case profits or the demand for your business dries up.

When writing your business plan, keep in mind that nothing is final. It’s a living, breathing document that you can update every now and then as your business evolves.

Step 7: Build Your Product/Service

Now that you have a business plan, you can start developing your minimum viable product. This is the earliest version of your product that you’ll introduce to your target buyers. You’ll then use their feedback in order to improve the product prior to mass production.

Even if you’re a perfectionist, it’s virtually impossible to create the perfect product or service right off the bat. So instead of succumbing to analysis paralysis, just release the first batch of your product into the wild and let the feedback dictate what changes you need to make.

Whether you’re planning to sell handicrafts, homemade cakes, or something more complicated, there are important aspects of product development you just can’t afford to take for granted. These are the following:

1. Process . Review the different steps that it will take to create your product. Are all of these steps necessary or can you remove some of them to save on costs without sacrificing product quality? What are tools and equipment will you need and how many skilled workers are needed to operate them?

2. Machines and equipment . Determine the things you’ll need to create your product, how much they are, and where are the best places that offer quality products at a minimal cost.

There are also some considerations to make depending on what type of business you’re going to start. Whereas a simple crafts business may only require hand tools and inexpensive machines, an Internet café will require specific computers with features that are completely different from those intended for personal use.

3. Materials . Know where and how you’ll get the materials you need as they will determine the pricing and eventually the profitability of the finished product.

For example, if your supplier is far from your business plant or location, and the transport facilities in the said place are limited, it will not only result in production delays but also additional manufacturing costs that will then jack up the price of the product.

However, it doesn’t mean you should just settle for the cheapest materials. Remember, don’t make a final decision based on price alone 4 as the reputation of your business is on the line.

To find the best deal, you can search online, get industry recommendations, or attend trade shows, among others.

4. Design . The product and the packaging must be able to get someone’s attention within the first few seconds of him/her glancing at them. The packaging should have a clean design, legible text, and clear branding that people recognize even from several feet away.

5. Pricing . Determine a reasonable price for your product/service by factoring in all the overhead costs. Make sure you have a good profit margin otherwise you may need to reduce the manufacturing costs (instead of increasing the product’s price) in order come up with a price that doesn’t turn off buyers.

The price of the product is also determined by the marketplace; if similar products are within a certain price range, then your product’s price should not veer off too much away from it if you want to capture the same market.

6. Trademark filing . Protect your business from copycats through trademark registration. You can either do it by yourself via the Intellectual Property Office of the Philippines (IPOPHL) website or hire a trademark lawyer to handle all the paperwork on your behalf.

Step 8: Get Feedback for Your Product

In the process of developing our product, we tend to be blinded by our own awesomeness that we forget what actually matters to those who will buy it. This is when feedback becomes very valuable.

Even if you’re only selling a humble kakanin , customer feedback will spell the difference between a profitable business and one that won’t earn repeat buyers.

Your aim is to get honest feedback from actual buyers (a.k.a strangers and not your close friends/relatives) so it won’t hurt if you offer free or discounted products in the beginning.

If you’re selling clothing items, on the other hand, you can sell beta versions of your products in small batches at first and let the customers order through your social media or website. These first few buyers can get your products at a discounted price in exchange for their feedback on the fabric, color, fit, comfort, and other areas of improvement of your product. Done right, these early adopters may turn out to be your first few brand advocates later on.

Through the strategy discussed above, you can get the product to your prospective customers’ hands faster instead of aiming for perfection that can never be attained, especially sans buyer feedback.

This principle, also known as Lean Startup 5 , can be applied to most businesses but most especially to startups that can’t afford to have a long incubation period for their products. Instead of being held back by perfectionism, they push out the early version of their products to the market in order to get that coveted feedback that will then propel those products into a series of improvements.

When collecting feedback from your prospective customers/buyers, remember these tips:

• Be thankful for the feedback regardless is it’s a positive or a negative one. This gesture will not only earn you their respect but also encourage them to continue providing honest opinions which you need the most.
• Dig a little bit deeper to learn what the negative feedback is all about. If someone doesn’t like your product, he or she is most likely referring to one aspect of the product and not its entirety. Ask questions to figure out whether to improve a specific flaw or just scrap the whole idea altogether.
• Look for patterns or the same comments given over and over again. Your customers know what’s best for them so if they’re specifically pointing out the same complaints, then address them as soon as you can before mass-producing your products.

Step 9: Look for Funding

Regardless of the size of your enterprise, you need money to get it started.

If you’re only selling home-cooked meals or desserts, you probably don’t need as much capital and you can start with whatever money is left in your savings account. No need to borrow money since you can get all or a portion of your profit and then reinvest it into your fledgling home-based business.

The same can’t be said for startups or huge businesses like restaurants that require large upfront capital. Aside from your personal savings, you may also need to go through several rounds of investing in order to get the business off the ground.

Here’s a list of different financing options in the Philippines you may consider to raise funds for your budding business:

1. Your own money. Using your life savings or proceeds from the sale of your personal assets is the safest way to finance your business. Since the money will come out of your pocket, you’ll be more in control of your destiny and retain 100% of your equity.

2. Friends and family. If your own money isn’t enough to raise the needed capital, you may also turn to your well-off friends and relatives with enough cash reserves. The advantage of borrowing from them is you’ll get relatively lower interest rates and more flexible payment terms compared to bank loans.

However, if you still fail to raise the needed funds after exhausting your own savings and borrowing money from friends and/or relatives, then it’s time to consider outside sources.

3. Government financing programs . The Philippine government is aware that small businesses are the backbone of the economy so they have established loan/credit programs to support our entrepreneurs.

Financial assistance is offered by different government agencies which include, but are not limited to, the following:

• Department of Science and Technology (DOST) and the Technology Resource Center which offer financing program for small businesses that are technology-related;
• Department of Agriculture ‘s Agri-Microfinance Program or AMP which is designed to provide financial relief to farmers and fishermen (and their families) in drought- or calamity-stricken areas;
• Department of Social Welfare and Development ‘s Sustainable Livelihood Program or SLP which seeks to improve the welfare and development of marginalized families through livelihood strategies.

For a comprehensive list of banks and government offices that offer financing programs for micro, small, and medium enterprises, you can check out the free ebook 6 published by the Bureau of Micro, Small, and Medium Enterprise Development (BMSMED) in collaboration with DTI.

The Philippine government-owned LandBank of the Philippines also offers lending programs 7 for those who are involved in the agricultural industry. These are the following:

• Cacao 100 (Credit Assistance for Cacao Agri-Business and other Organizations) – offers loan assistance to farmers and entrepreneurs with the main goal of catalyzing the growth of cacao output in the Philippines. This is a good choice if you’re looking to fund your cacao nursery, cacao plantation, and all the processes involved in cacao beans processing.
• Agricultural Credit Support Project (ACSP) – suitable for agri-businesses needing additional funding to support increased production or business expansion. This is ideal for entrepreneurs who are seeking financing for their fisheries, farm equipment, agriculture-related services, and agricultural product distribution.
• KAWAYAN ( Kalikasang Kabuhayan para sa Wastong Pamayanan ) – this program provides financial assistance for farmers, LGUs, and entrepreneurs who have businesses involving bamboo nursery, bamboo plantation, trading, and eco-tourism.
• ISDA (Integrated Support for the Development of Aquaculture) – is a program established to help small fishers as well as small and medium enterprises.

For more information about LandBank’s lending programs, you may contact their customer care center at (02) 405-7000, visit the nearest LandBank Lending Center, or send an email to [email protected]

4. Angel investors or Venture Capital investors . Another alternative source of funding is individuals or groups of individuals who already have the intent to invest.

Angel investors are established and wealthy individuals who use their personal money to invest in their chosen startups. The Angel Investment Network is a great online platform that enables you to find individual investors in the Philippines who can relate to the vision of your company.

Venture capital firms like Kickstart Ventures , on the other hand, is composed of a group of professional investors that pool together all the money coming from individuals, corporations, foundations, and pension funds and then invest them to startups of their choice, the majority of which are businesses dealing with technology and science.

5. Startup incubator or accelerator . The thriving local ecosystem has prompted the launch of several startup incubators and accelerators, most notable of which are the IdeaSpace Foundation, Launchgarage Inc., and QBO Innovation Hub, among others 8 .

The goal of these companies is to provide support to startups (mostly technology or fintech companies) in the form of office facilities, consulting, pitch events and equity-free seed funding that will help get their enterprises off the ground.

6. Banks . There are SME-friendly banks that lend money to entrepreneurs despite the risks associated with small businesses. Just make sure you comply with their requirements and show enough proof (including a business plan) that you have a clear vision for the business you’re going to start.

Examples of local banks known for supporting small businesses include the government-owned LandBank of the Philippines, the Development Bank of the Philippines, Metropolitan Bank and Trust Company, and the Planters Development Bank.

Related: Best Banks in the Philippines

7. Pitching competitions . Early-stage businesses can also get funding by joining televised pitching competitions like The Final Pitch and the upcoming reality show “Project GO” 9 sponsored by GoDaddy Inc. and to be aired on AXN.

These reality shows will require qualified contestants to pitch their business ideas in front of a panel of esteemed Filipino business experts and investors (think Shark Tank ). Since they’re joining a reality show, investment decisions will not be made unless the entrepreneurs go through a series of entertaining challenges first.

Prizes for winning contestants may be in the form of funding in exchange for partial ownership of their businesses or equity-free funding to help jump-start their ventures.

8. Other sources of financing . Small business owners can also consider the following when seeking credit assistance:

• Pawnshops – the ideal choice if you’re only looking for quick cash. You can get the money you need by pawing your jewelry, gadget, or other valuables and then pay back the amount along with incurred interest.
• Credit cooperatives – popular especially in rural areas, the credit coop can lend you an amount up to five times bigger than what you initially deposited when you joined. Unlike banks, credit coops charge a significantly lower interest rate for your loan.
• Lending investors – a cross between banks and money lenders, these companies offer short-term loans to small enterprises with interest rates of usually 3% to 5% a month–higher than those offered by banks but lower than those charged by money lenders.

Step 10: Formulate Marketing Strategies

In a nutshell, marketing strategies refer to how you’re going to convince or influence your target market to buy your product or services.

Your marketing strategies can be summarized into four key components. Let’s go over them one by one.

1. Product strategies – revolve around the product itself and how it will be perceived by your target market. It starts with good branding which is the design, reputation, name, logo, or a combination of these that make your product or service different from other similar products/services in the market. Consistent branding must also be present in the product’s packaging and labeling.

However, an excellent product can only go so far; you also need to invest in product support which is a catch-all term for all warranty, delivery, installation, and other services that come with the purchase of the product.

2. Place strategies – focus on how you want to bring your product or services to your target market. Depending on your business, you can use traditional or modern distribution channels (or even both).

Traditional distribution channels exist in the form of kiosks and brick-and-mortar stores where face-to-face interaction between the buyer and seller can cultivate a long-term buying relationship. New distribution channels, meanwhile, are those that don’t necessarily require an in-person interaction since the transaction can easily be completed via phone or the Internet.

Your choice of distribution channels depends on your target market’s preference and behavior, competition, as well as the current state of the market (think the 2020 pandemic that has forced restaurants and a lot of businesses to shift to e-commerce).

3. Price strategies – cover everything that concerns the price tag for your product.

How you price your product can make or break your business. Therefore, ensure you price your product or service in a way that will keep your business profitable while meeting the needs of the target market.

To come up with a price, there are three factors you have to consider. First is the cost of making the product or service you’re selling. You can add the total cost you incurred in producing your product and then divide it by the total number of the products to determine the unit cost.

For example, if you spent Php 1,500 to bake 100 chocolate cookies, the unit cost would be Php 15 (1,500/100). As for the selling price, you need to add a markup which is a percentage of the unit cost that you think when added will sufficiently cover the direct (i.e., materials, labor, etc.) and overhead costs. Say the markup is 20%, and 20% of Php 15 is 3, then the selling price is Php 18 (15 + 3).

The second factor you have to consider is the competition. You will use the price they have set for a similar product/service as a benchmark when determining the price of your own. You may either go higher to make the target market perceive what you’re offering as higher in quality or lower to make an introductory offer and in so doing gain your first few fans.

Lastly, the current demand for the product/service you’re selling can also determine the selling price. Simply put, the higher the demand for the product that only a few businesses are offering, the higher the selling price becomes. Conversely, the lower the demand for a product with plenty of supply, the lower the price will be.

4. Promotion strategies – make up the core of your marketing strategies since these cover all the tools and channels you’ll use to reach out to your target market.

Remember that whether you’re using Internet ads or television commercials to promote your business, it’s important to convey your message in a way that resonates with your prospective buyers.

To do this, you must focus on highlighting the benefits and not the features of the products. People won’t care how many advanced technologies you’ve used to produce your product unless it offers solutions to their problems. If you’ve studied your market well, then you should know by now what keeps these people awake at night and how your product can address this.

Step 11: Register Your Business

Now that you’re a few steps away from launching your own business, it’s time to legitimize it by securing all the required permits and registration documents.

Whether your business is a sole proprietorship, partnership, or corporation, you’re required by the government to register it. Doing so will allow your business to be legal in the eyes of the law, file tax returns, apply for government loans, and avoid incurring penalties.

The process of business registration in the Philippines can be long and frustrating. Fortunately, we’ve covered all the basics and condensed them into one easy-to-follow business registration guide in the Philippines .

Step 12: Find a Strategic Location

Choose the right location for your retail business and you already have the battle half-won. But how do you pick a great location? Here are some guidelines you need to follow:

• It should be near the source of raw materials. The main reason why some products are priced ridiculously high is that it costs a lot for the raw materials to be delivered to the business location. Therefore, putting up a business near the source of the raw materials (e.g., sugar millers near sugarcane plantation, food processors near fruit/vegetable farm) will bring the transport cost down and in so doing make the product price more affordable for the consumers.
• It should be where the market is. In the same way that you save on transport costs by placing your business near the source of your raw materials, you should also make sure that the business is near and accessible for people you intend to serve. If the target market exists within the vicinity of your own home, much better since you can start a home-based business and save on rental fees.
• It should be accessible to your employees and customers. Foot traffic is the lifeblood of brick-and-mortar businesses so make sure the place where you’ll establish your store is easy to find, has plenty of public transport, and has available parking spaces for everyone. This strategic location will benefit not just your customers but also your current and future employees. A business near a good source of skilled labor won’t have a hard time finding new employees should the need arises and will also save on accommodation costs since they’re within the commuting distance of the business.
• It must be in a place with a reliable and adequate supply of power, water, and Internet services . Even the slightest disruption in any of the aforementioned utilities can drastically affect your daily business operations so make sure you choose a location with an established infrastructure. If you’ll be renting a place, verify beforehand if the utilities are included in the lease so you won’t be caught off guard by any hidden charges.
• It should be in a safe and peaceful environment. Building a business in a neighborhood notorious for looting and other forms of violence is a huge risk you can’t afford to take especially if you’re a first-time entrepreneur. Pick a place where established businesses have been thriving for decades and whose residents have high purchasing power. You also need to ensure that your business will comply with existing ordinances and zoning restrictions in your chosen community.
• It must be in a decent and pleasant place. You don’t want to start a business in an environment that will drive prospective customers away so make sure to check the place for the presence of disagreeable things like smoke, noise, foul odors, dust, as well as proximity to places like bars and pub houses (unless your businesses are bars and pub houses).
• It should be where a moderate number of your competitors are operating . The presence of competition can either be a good thing or not. If the place is full of competing stores placed one after another, it may be more difficult to stand out and penetrate the market. On the contrary, the absence of any competitor may be a telltale sign that the place is bad for business, especially if it has a history of similar businesses closing down or going bankrupt. In most cases, however, establishing your business beside one or two competitors can actually be a good thing since the presence of similar businesses in one place will attract more foot traffic.

Step 13: Form Your Dream Team

A business won’t run by itself. It needs people to complete its daily operations.

As a business owner, it’s your responsibility to find and choose the right employees to join your dream team. If you own a retail business, the rule of thumb is to hire people who are highly approachable and have a positive attitude. A grumpy Debbi Downer is a liability that will cost you a lot of loyal customers.

Once you’ve found the right people, it’s time to train them well and incentivize them to do their best work consistently. In order to keep your employees motivated and committed to their jobs, not only should you pay them right but also treat them with the same respect and kindness you’d want to receive if you’re the employee.

Should you need assistance in providing technical training for your staff, the government can help you through various programs offered by the Technical Education Development Authority (TESDA), the Technology Resource Center (TRC), and the Department of Science and Technology (DOST).

When it comes to employees’ rights, there are a few important things you have to keep in mind to ensure you’ll be in good terms with your employees:

• All employees, male or female, are entitled to equal compensation and work opportunities. Discrimination is not allowed in any way or form so you should not do unacceptable things like not hiring a woman just because she’s married or firing an employee just because she got pregnant.
• Every employee should be assured security of tenure. You can’t dismiss an employee unless it’s due to a just or authorized cause. Termination can only be done after observing due process.
• Employees are normally required to work for 8 hours a day . This 8-hour period already includes rest periods of less than an hour but excludes meal periods of at least one hour.
• Employees are entitled to get a rest day after not more than 6 consecutive workdays. They can also file different types of leaves to take a break from work. These include the five-day Service Incentive Leave (SIL) with pay which can be availed by the employee after a year of service in the company; Maternity Leave which is granted to qualified female SSS members in anticipation of childbirth or due to abortion or miscarriage; and the seven-day Paternity Leave with pay for the male spouse of a woman who is about to give birth or has suffered from a miscarriage.
• Employees must be paid the right wage commensurate to the amount of work rendered as well as wage-related benefits like accommodation, overtime, rest day, night differential, 13th-month pay , and holiday.
• Employees deserve to be protected from any injury, sickness, or death through a safe working environment .
• All employees have a right to join or form a legitimate worker’s organization or labor union without the employer’s interference. These groups are established for the purpose of upholding their rights as workers and doing collective bargaining. For instance, workers can be represented by these organizations in tripartite decision-making involving them, the government, and the employers’ organizations. This way, they can have their voices heard in matters concerning workers’ wages and labor disputes.

Step 14: Purchase All the Needed Equipment and Supplies

Some businesses can get by with just manual labor. However, for those that invest in machines and equipment, the increase in business productivity and profitability can be phenomenal if done right.

Therefore, you have to apply the same meticulousness in selecting the supplies, machines, and equipment needed to produce your product. Follow these proven tips before making a purchasing decision:

• Have a clear idea of what you want to buy before heading to the store/supplier. Know the specific needs of your business, the kind of machine/equipment that can meet these needs, and all the engineering features and operating characteristics you’re looking for. This way, you can cut down on shopping time and simply go straight to comparing only the products that meet all your criteria.
• Shop around and don’t settle with the first supplier that you come across no matter how great it is. Instead, get information on each supplier that sells the machine/equipment you’re looking for and judge them one by one in terms of reliability, price, warranty, payment terms, delivery, installation service, maintenance, etc. Just because the product is the cheapest doesn’t mean it’s also the best; multiple factors will determine which one suits your business best.
• Choose excellent machine/equipment that is within your price range . Remember, it’s an expensive investment so make sure you have done your assignment of comparing the cost of each machine/equipment that you’ve shortlisted based on their fuel efficiency, capacity, and other technical matters. Alternatively, you can lease or buy a second-hand machine/equipment so you won’t have to spend more money on a new one.

Step 15: Launch Your Business

And there you have it: You are now ready to start your own business. Although this article has only covered the basic details of jumping into entrepreneurship, it should be enough to get you started.

Remember, it’s not unusual for first-time entrepreneurs to make mistakes in their first ventures but the lessons from these mistakes are what will propel you forward as you learn more about your business.

Entrepreneurship is not just about earning big bucks. It’s also about generating job opportunities that will help a lot of families. As an entrepreneur, you’ll be serving not just yourself but also the community around you.

Regardless of the outcome, consider this journey as a launching pad to greater things. And if there’s one thing that owning a business can teach you, it’s the truth that learning doesn’t stop.

So keep learning and have faith both in God and in yourself. Who knows? Your greatest breakthrough may be just around the corner.

• Bureau of Small and Medium Enterprise Development (BSMED). (2015).  Your Guide to Starting a Small Enterprise  [Ebook]. Retrieved from https://www.dti.gov.ph/resources/e-library/business/starting-a-business/guide-in-starting-a-business-enterprise/
• Bureau of Small and Medium Enterprise Development (BSMED). (2015).  Do You Want to Go Into Business?  [Ebook]. Retrieved from https://www.dti.gov.ph/resources/e-library/business/starting-a-business/guide-in-starting-a-business-enterprise/
• Entrepreneur.com. (2017).  Need a Business Idea? The Best Way to Find One Is to Stop Looking.  [Video]. Retrieved from https://www.entrepreneur.com/video/295451
• Goodman, M. (2015). The 7 Steps of Effective Product Development. Retrieved 10 August 2020, from https://www.entrepreneur.com/article/244616
• The Lean Startup Methodology. Retrieved 12 August 2020, from http://theleanstartup.com/principles
• Bureau of Micro, Small and Medium Enterprise Development (BMSMED). (2012).  Financing Programs for Micro, Small, and Medium Enterprises (MSMEs)  [Ebook].
• Summit Publishing Co. Inc. (2015).  52 Inspiring Success Stories: Breakthrough Ideas for the Aspiring Entrepreneur  (pp. 7-9). Mandaluyong City.
• Noda, T. (2018). 10 Notable Incubators and Accelerators In The Philippines. Retrieved 14 August 2020, from https://fintechnews.sg/22610/fintechphilippines/incubators-accelerators-in-the-philippines/
• GoDaddy, AXN launch reality show to jumpstart ventures of Filipino entrepreneurs. (2020). Retrieved 14 August 2020, from https://mb.com.ph/2020/08/12/godaddy-axn-launch-reality-show-to-jumpstart-ventures-of-filipino-entrepreneurs/

Written by Luisito Batongbakal Jr.

in Business and Finance , Juander How

Last Updated March 31, 2022 07:11 PM

Luisito Batongbakal Jr.

Luisito E. Batongbakal Jr. is the founder, editor, and chief content strategist of FilipiKnow, a leading online portal for free educational, Filipino-centric content. His curiosity and passion for learning have helped millions of Filipinos around the world get access to free insightful and practical information at the touch of their fingertips. With him at the helm, FilipiKnow has won numerous awards including the Top 10 Emerging Influential Blogs 2013, the 2015 Globe Tatt Awards, and the 2015 Philippine Bloggys Awards.

Browse all articles written by Luisito Batongbakal Jr.

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Philippines focused on working with SMEs to create economic opportunities

The Philippines | Economy

Although small and medium-sized enterprises (SMEs) comprise 99.6% of all businesses in the Philippines, employ 65% of its workforce and account for 35% of GDP, they face a host of growth challenges including lack of technical capacity, difficulty in accessing regional markets in ASEAN and, most notably, lack of access to finance. While the government moves to support credit growth and connections to national and regional supply chains will help, private sector offerings including new online payment platforms could offer perhaps the best mid-term solution to persistent challenges SMEs face in accessing new markets and services.

Credit Access

A September 2015 report by Deloitte and Visa, titled “Digital banking for small and medium-sized enterprises: Improving access to finance for the underserved”, found that total loan volumes for SMEs in the country stood at just $9bn in 2014, compared to Thailand’s region-leading $171bn. After adjusting for the size of its economy and contribution to GDP, the report’s authors found that the Philippines is lagging behind its regional neighbours in terms of credit access. Personal funds stand as the dominant source of financing for SMEs, with just 39% of respondents surveyed for the study reporting they had accessed finance through a bank loan; most banks require collateral before extending credit. Disbursement is often slow due to lack of available credit information, as well as lack of bank and government guidance on compliance documents. The cost of credit for SMEs is also much higher compared to large-scale corporate loans. This leads many SMEs to seek finance through alternative sources. Credit leasing accounted for 24% of SME financing, with supplier credit making up another 24%, followed by equity financing (10%) and grants (2%), according to the report. Non-financial impediments to SME development include rising business costs, difficulty in sourcing staff, intense competition as the ASEAN Economic Community integration process proceeds, unstable demand and burdensome regulations.

Promisingly for Philippine SMEs, the new administration of President Rodrigo Duterte has highlighted small business development as a critical economic priority. Before he was elected, Duterte promised to allocated P18bn ($380.8m) annually for SME lending during a speech to the Makati Business Club in April 2016. Duterte told attendees that each of the country’s 18 regions would receive P1bn ($21.1m) in annual funding in a bid to reduce reliance on exploitative loan sharks, with the programme to be overseen by the Department of Trade and Industry (DTI). He also promised to reduce the processing time for new business licences to three days. The increased focus on SMEs continued after Duterte’s May 2016 election victory. During his first state of the nation address, the president specifically directed government financial institutions to develop new financing option for SMEs, once again emphasising that the DTI will play an important role in any new lending initiatives.

Dti Support

The DTI, for its part, has been increasingly vocal about delivering new SME support mechanisms. In August 2016, for example, the department announced that it had mapped out plans to strengthen the SME sector and support small businesses as they join the global supply chain. Speaking to the media, Ramon Lopez, secretary of trade and industry, urged CEOs of large firms to support the entry of micro-, small and medium enterprises (MSMEs) in the ASEAN production network and supply chain under a new initiative, Kapatid, launched in partnership with the Philippine Centre for Entrepreneurship earlier in the month.

With participation from the Philippine Chamber of Commerce and Industry, the Association of the Filipino Franchisers and the Employers Confederation of the Philippines, the programme offers mentorship for micro-entrepreneurs, facilitates connections to shared service facilities, and links MSMEs into the value chains of larger companies, using a World Bank-recommended inclusive business model and promoting their growth.

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How the pandemic is affecting small businesses in the Philippines

By: Anna Gravois

Around the world, the lasting impact of the COVID-19 pandemic goes far beyond inundated hospitals and widespread travel bans. For small businesses in the Philippines, the challenges that owners face in keeping doors open continue to be immense, especially for those in rural areas. In 2020, business owners were forced to let a huge percentage of their workforce go, with the World Bank reporting a 52% job loss in the construction sector and an even higher number among workers in small businesses like laundry, hairdressing, and other roadside shops. To learn more about how the pandemic is affecting small businesses in the Philippines we interviewed Horton Caguingin, a Kiva Coordinator for Kiva Field Partner Alalay sa Kaunlaran, Inc (ASKI) . Established in 1986, ASKI is a non-profit dedicated to promoting and developing micro and small-to-medium enterprises and the delivery of social services across the Philippines. Horton’s work as the liaison between Kiva and ASKI provides him with a unique perspective on the challenges that business owners across the Philippines have been facing, as well as what has been helping them stay afloat amidst a world crisis. Interested in supporting small businesses in the Philippines? Microloans have helped business owners during periods of closures and lower demand. You can help crowdfund small loans to people in the Philippines here.

How Horton facilitates Kiva loans at ASKI

Horton started his journey in microfinance as an Accounting major at university and began his internship at ASKI shortly afterwards. He worked his way up to an accounting assistant, and finally to a Resource Mobilization Officer, taking over ASKI’s Kiva account. Over his 4 years as a Resource Mobilization Officer, Horton has developed a deep understanding of ASKI’s microfinance recipients, including their journeys, struggles, and successes. “I’m essentially the leader of Kiva’s ASKI team and oversee three officers in designated regions. We upload client stories on the website, and I review them before they are sent out. I also facilitate the repayment report that is submitted to Kiva monthly."

"With the help of microfinance, we can help clients’ children with their schooling.” ​​​

The impact of COVID-19 on business owners

The Philippine government passed numerous laws to aid in the well-being of citizens during this crisis. Emergency subsidies were disbursed to people across the Philippines, but unfortunately these weren’t enough to cover the cost of living. Horton speaks to how business owners have been reevaluating their strategy to support themselves and their children: “Aside from financial support and social services, ASKI also helps clients to market their products online. Online business has been a trend in the Philippines since quarantine started and the Philippines’ Travel and Tourism sector was severely affected. Education has also been affected in the Philippines. The government is promoting online classes, but it’s tough for less fortunate families to afford the gadgets and internet required to use them. Families use their money to buy necessities, like food, instead. With the help of microfinance, we can help clients’ children with their schooling.” Fund a microfinance loan in the Philippines

The impact of COVID-19 on ASKI

Prior to the pandemic, ASKI brought financial services to underserved communities around the Philippines. Additionally, like many of Kiva’s Field Partners, they provide social services to their clients, offering scholarships for students, day care centers, and health services.

Learn more about Kiva’s Field Partners

“In March 2020, the president of the Philippines issued an executive order for enhanced community quarantine,” Horton says. This lockdown affected many cities, including ASKI’s areas of operation. “Many establishments, government offices, and institutions were temporarily closed. Public transportation was not allowed to operate, and people were restricted from going outdoors.” COVID-19 placed microfinance institutions like ASKI in a uniquely difficult position. Since many businesses and other establishments were forced to shut down or greatly reduce their operations, a large percentage of ASKI’s clients were unable to make loan repayments. This was a sentiment heard around the country and the world, and resulted in the Philippine government implementing a loan moratorium. The moratorium was a necessary lifeline to millions of citizens living in the Philippines, but it also meant that microfinance institutions didn’t have the same financial capital they needed to support their own employees. This makes Kiva an especially crucial investor to ensure the endurance of microfinance institutions like ASKI. Despite reduced working hours, no ASKI employees were laid off due to the pandemic. This speaks to the resilience and adaptability of the microfinance sector. With help from Kiva and other global investors, ASKI was able to pivot their strategy to focus on social services. Learn more: how microfinance stayed resilient through a global pandemic

Finding hope during a crisis

Horton is optimistic for the future of the Philippines. With partnerships from the government and other organizations like Kiva, he is positive that recovery is close. In fact, as of March 2022, ASKI has been able to pay off all outstanding loans back to Kiva. He is grateful for the support the Philippines has received from organizations around the world, and is confident that microfinance can help small businesses around the Philippines flourish. To learn more about ASKI, click here . To support borrowers and Field Partners in the Philippines, click here.

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The Current State of Entrepreneurship in the Philippines

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.
• 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.

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.

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.

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.

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.

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.

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.

Recommended Read: Supporting Small Businesses in the Philippines

Final Words

The current state of entrepreneurship in the Philippines showcases a thriving ecosystem driven by cultural shifts, favorable economic conditions, and technological advancements. The contributions of entrepreneurship to the Philippine economy, including job creation, innovation, and socio-economic development, are significant. However, challenges such as access to financing, market opportunities, and regulatory barriers persist. Continuous government support, policy reforms, and collaborative efforts between the public and private sectors are vital in addressing these challenges and nurturing a sustainable entrepreneurial ecosystem. By doing so, the Philippines can unlock the full potential of its entrepreneurs and drive future economic growth.

I'm Benjie, and I'm the founder and main contributor to this blog. I started this blog as a way to share my passion for entrepreneurship and to promote the amazing work being done by Filipino business owners. As a proud Filipino myself, I'm always inspired by the creativity, innovation, and resilience of our people, and I believe that sharing their stories is a great way to help them succeed and inspire others to follow in their footsteps.

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Unlocking Entrepreneurship Success: Your Ultimate Guide to Thriving in the Philippines 

Disclosure: Small Business Philippines strives to provide relevant and accurate information in all its articles. However, some information in our articles may differ or might be outdated from what you can see or read directly from the establishments’ or businesses’ websites. Please get in touch with us directly for any discrepancies.

Entrepreneurship is the dynamic process of identifying, creating, and pursuing opportunities to develop innovative ideas into viable business ventures. As an entrepreneur, you take risks, overcome challenges, and drive your vision to fruition. In the Philippines, entrepreneurship is a thriving force that drives economic growth and empowers individuals to shape their own destinies.

Why Pursue Entrepreneurship in the Philippines?

When to embark on your entrepreneurial journey, where to establish your business, 1. identify your passion and purpose, 2. conduct market research, 3. create a solid business, 4. secure funding, 5. build a strong team, 6. establish a legal entity, 7. develop a marketing strategy, 8. adapt and innovate, harness the power of networking, embrace digital transformation, prioritize customer satisfaction, embrace social responsibility, key takeaways.

The Philippines offers a favorable environment for entrepreneurs due to its growing economy, young and dynamic population, and supportive government initiatives. With a robust market, emerging industries, and a culture of innovation, there are ample opportunities for aspiring entrepreneurs to carve their niche and achieve remarkable success.

Timing plays a crucial role in entrepreneurship. While there’s never a perfect moment to start, it’s important to assess market trends, evaluate personal readiness, and capitalize on emerging opportunities. Consider factors such as your financial stability, industry growth, and the availability of resources before leaping.

Choosing the right location is vital for entrepreneurial success. In the Philippines, several cities offer favorable conditions for startups, such as Metro Manila, Cebu City, and Davao City. Each location has its own advantages, including access to talent, infrastructure, and market reach. Conduct thorough research to identify the ideal location that aligns with your business goals.

How to Start Your Entrepreneurial Journey?

Discover your true passion and align it with a viable business idea . Consider your skills, interests, and the problems you want to solve. Find a purpose that drives your entrepreneurial journey and keeps you motivated during challenging times.

Thoroughly analyze the market landscape to identify potential customers, assess competition, and validate your business idea. Understand your target audience’s needs, preferences, and pain points to develop a compelling value proposition.

Plan A well-crafted business plan acts as your roadmap to success. Outline your business objectives, strategies, financial projections, and marketing plans. Seek professional guidance if needed to ensure your plan is comprehensive and realistic.

Evaluate different funding options, such as bootstrapping, loans, grants, or seeking investors. Develop a robust financial model that showcases the potential profitability of your venture. Be prepared to present your business plan to potential investors or financial institutions.

Surround yourself with talented individuals who share your vision and complement your skills. Assemble a team with diverse expertise to cover all critical aspects of your business, from operations to marketing and finance.

Register your business with the appropriate government agencies and secure the necessary permits and licenses. Ensure compliance with local regulations and tax requirements to avoid legal complications down the road.

Craft a comprehensive marketing strategy to effectively reach and engage your target audience. Leverage digital marketing tools, social media platforms, and other advertising channels to build brand awareness, generate leads, and drive sales.

Entrepreneurship is a dynamic journey that requires continuous learning, adaptation, and innovation. Stay updated with industry trends, embrace new technologies, and be open to feedback. Iterate your business strategies to stay ahead in the ever-evolving business landscape.

Examples and Tips for Entrepreneurial Success in the Philippines

Attend industry events, join entrepreneurial communities, and build relationships with like-minded individuals who can offer guidance, collaboration, and potential partnerships.

Leverage technology to streamline your operations, enhance customer experiences, and scale your business efficiently . Embrace e-commerce, digital marketing, and automation tools to gain a competitive edge.

Focus on delivering exceptional products or services and prioritize customer feedback. Build a loyal customer base through personalized experiences, prompt support, and continuous improvement.

Incorporate sustainable practices into your business operations , support local communities, and give back to society. Showcasing a strong commitment to social responsibility can enhance your brand reputation and attract socially conscious customers.

• Entrepreneurship in the Philippines offers immense opportunities for growth and success.
• Timing, market research, and strategic planning are key factors to consider before starting your entrepreneurial journey.
• Choose the right location, assemble a strong team, and develop a robust marketing strategy to thrive in the competitive landscape.
• Adaptation, innovation, and networking are crucial for long-term entrepreneurial success.
• Embrace digital transformation and prioritize customer satisfaction to gain a competitive edge.
• Emphasize social responsibility to create a positive impact while building your brand.

Start your entrepreneurial journey today and unlock the limitless potential that awaits you in the thriving entrepreneurial landscape of the Philippines. Embrace the key strategies, insights, and tips shared in this guide to paving the way for your entrepreneurial success. Remember, with dedication, resilience, and strategic thinking, you can turn your vision into reality and make a lasting impact in the business world.

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Overview of Business Environment in the Philippines Analytical Essay

Introduction, pest analysis, recommendations.

The Philippines is one of the progressive countries in Southeast Asia. Its present growth can be attributed to the resilience of the Filipino spirit and the industry of millions of overseas workers, added with a popular and enigmatic president, Benigno S. Aquino III, son of former president Corazon Aquino, one of the heroes of the EDSA Revolution and martyred Benigno Aquino.

The rich culture and a people who want to rise above underdevelopment can make a business venture promising and challenging. The economy depends much on Overseas Filipino Workers (OFW) remittances and export products like sugar, pineapple, coconut, and electronic products which are being exported to major countries like the United States, Europe and other Asian countries.

Overseas remittances remain the lifeblood of the economy; if it were not for the billions of dollars sent by Filipinos from the Middle East and other countries, the economy could have suffered much. Presently, Filipinos are united to rise from political crises that have plagued the nation for years.

The Philippines experienced two colonizing periods in its long history – four centuries of Spanish colonization which introduced Christianity, and the takeover of the Americans which introduced education and the bulwarks of democracy. Through these periods, the Philippines experienced political upheavals, repression, and a little growth.

After years of instability due to the emergence of different political factions, the Philippines now has a stable political system under the administration of President Benigno Aquino or Pinoy as he is popularly known. President Aquino has opened the floodgates of investments coming from major investors from the United States and Europe.

In the recent past, it was put in a stagnant position because of politics and quest of a few greedy politicians for power. It deteriorated during the reign of the dictator, Ferdinand Marcos, who ruled with impunity and countless human rights violation. There were other factors that affected the downward trend of the economy, such as the SARS scare and Islamic terrorism. (Beirman, 2003, p. 254)

The Philippines is a developing country although in some respect it has been observed as more developed than some countries in the Association of Southeast Asian Nations (ASEAN). The country is blessed with abundance of natural resources and a big and industrious workforce presently employed in the Middle East, the United States, Europe and other progressive countries in Asia.

The Philippine economy has continued to be strong and growing despite the many challenges, both political and economic, that it has encountered all through the years. (Tetangco, 2006)

The present global economic crisis did not have much effect on the Philippines because of the OFW remittances. Skilled labor is one of its valuable economic assets. The level of unemployment has gone down (Trading Economics, 2011) due to skilled labor being exported to countries wanting for talented and experienced labor force.

The vast natural resources could have been a major asset of the economy if it were tapped with utmost diligence and care. Mining could be a major contributor considering that recent mines have been discovered in its islands, but thanks to the militancy and awareness of the people, there are oppositions trying to save the environment.

The Philippines can be the number one destination in Asia because of its rich heritage, historic spots, rich natural resources, and hospitable people willing to receive any guest who enters in their shore lines.

Social factors are in favour of foreign investments. Filipinos are hospitable, they welcome every foreign national into the country; this is the reason why tourism is thriving and is also one of the major dollar earners of the country.

The people are ‘westernized’, due to years of American colonization, so that entry of a UK company is very much welcome. UK products are welcome. Filipinos patronize ‘imported’ products, or those coming from western countries because they have this colonial mentality and the fact that they are used to Western products brought to them by relatives who come home from abroad.

Technological

Technology plays an important role in this new venture to the Philippines as the next destination of a UK supermarket chain. Information technology and the Internet have been introduced. Young graduates from first class universities and thriving technical schools in the country are equipped with IT expertise and other technical courses. IT professionals also dominate the labor force. The Internet is not new to Filipinos.

Almost all major businesses and organizations in the Philippines have their websites and they make use of computers and the Internet.

Porter’s Five Forces

Porter’s five forces will also shape the entry of a UK firm in the Philippines. Profitability will be determined by these five sources of competitive pressure. (Grant, 2005, p. 173)

Threat of New Entrants

There are a number of supermarkets in the Philippines and our entry will be a threat, although this will depend on the kind of products the UK supermarket will bring. Existing supermarkets also bring with them imported products coming from the UK, U.S. and Europe

Bargaining power of suppliers

Outsourcing companies from China can supply the UK supermarket for its store in the Philippines. However, this is what existing stores and supermarkets are doing. Chinese products are flooding Philippine stores. Products will have to come from local suppliers.

Bargaining power of buyers

Filipino customers are meticulous and want low cost products. In order to remedy the situation, supermarket products will have to be sourced locally, but some imported ones will be mixed with local products, such as fruits coming from UK and the US, in order to make the store competitive.

Threat of substitute products

This is one of the problematic areas that the UK store will have to tackle. Local products will be a major threat. The Philippines has an abundance of fruits, vegetables, fish, and different kinds of meat products. These are cheap and are supplied locally.

Cultural Dimensions

The Philippines has a rich cultural heritage, from the Malay race to the European and American cultures introduced to Filipinos. There are also various ethnic groups comprising the Filipino culture.

The UK supermarket management will have to adjust to the Filipino culture, but it is not too difficult. Filipinos are receptive of foreign culture. They are hospitable and love to be with other nationalities. Most families have members abroad; many come from the UK doing different professional jobs. Employees will not have difficult time adjusting to the Filipino culture.

The Philippines is an important country in Asia and to have a UK supermarket in that country is recommended. It is a growing and dynamic economy.

Management decision making will be influenced by the local cultures, for example the kinds of products and foods that should be available all the time. (Cray and Mallory, 1998, p. 71)

Management will have to adjust with the Filipino culture although, as stated above, Filipino culture is already a mixture of ethnic and foreign culture. There are a number of foreign nationals in the Philippines and many of them are Europeans, Americans, and mostly ethnic Chinese.

Beirman, D., 2003. A comparative assessment of three Southeast Asian tourism recovery: Singapore roars: Post SARS 2003, Bali Post – the October 12, 2002 Bombing, and WOW Philippines 2003. In: Y. Mansfeld and a. Pizam (eds.), 2006. Tourism security and safety: from theory to practice. Oxford, UK: Elsevier Inc. p. 254.

Cray, D. and Mallory, G., 1998. Managing culture . UK; US: International Thomson Business Press.

Grant, R., 2005. Contemporary strategy analysis , fifth ed. United States of America: Blackwell Publishing.

Tetangco, A., 2006. The state of the Philippine economy and policy directions of the Bangko Sentral ng Pilipinas. Bank for International Settlements. Web.

Trading Economics, 2011. Philippines unemployment rate . Web.

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IvyPanda. (2018, October 25). Overview of Business Environment in the Philippines. https://ivypanda.com/essays/business-environment-case-study-the-philippines/

"Overview of Business Environment in the Philippines." IvyPanda , 25 Oct. 2018, ivypanda.com/essays/business-environment-case-study-the-philippines/.

IvyPanda . (2018) 'Overview of Business Environment in the Philippines'. 25 October.

IvyPanda . 2018. "Overview of Business Environment in the Philippines." October 25, 2018. https://ivypanda.com/essays/business-environment-case-study-the-philippines/.

1. IvyPanda . "Overview of Business Environment in the Philippines." October 25, 2018. https://ivypanda.com/essays/business-environment-case-study-the-philippines/.

Bibliography

IvyPanda . "Overview of Business Environment in the Philippines." October 25, 2018. https://ivypanda.com/essays/business-environment-case-study-the-philippines/.

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Today’s front page, Tuesday, May 21, 2024

When ‘the incubator’ works truly well, even small businesses will survive: a pandemic success story

• Mila M. Lumactao
• May 22, 2024
• 4 minute read

IN the worst days of Covid-19, the economic impacts rippled ruinously across communities throughout the Philippines. Such was the case of an entire farming community in barangay Zumigui in Luna, Apayao, which struggled as selling prices of their traditional monocrop product—rice—kept dropping.

The Dumapay family, rooted in the community, enjoined their relatives, lifelong friends, and neighboring farmers to revisit another product naturally abundant in the area but largely ignored: coconuts.

Fast forward to April 2022, and Dumapayao Farms Corporation (DFC) was born: with a company brand fusing family name and their treasured Apayao heritage, and the proponents and co-founder Reynold and Judith Dumapay envisioning, “to honor God as we enable farmers in the countryside to experience a better life through sustainable secondary crops.” Regionally, DFC has effectively pioneered high-value coconut-based production and processing in Apayao; over the long-term, DFC seeks to establish Apayao as the “Coconut Capital of the North.”

Enter the incubator

Bucking twin challenges—the typical attrition rate of Philippine MSMEs, and the cumulative economic effect of the pandemic and lockdown measures—Dumapayao Farms found a wholistic enabling environment. First to throw support was the local government, led by the office of Mayor Josephine Bangsil of Luna, Apayao; Rep. Eleanor Bulut-Begtang, the lone congresswoman of the province, and the Provincial Government of Apayao, led by Gov. Elias Bulut Jr.

Because the company was new to its first and flagship product, Virgin Coconut Oil (VCO), national government representatives filled in crucial gaps.

The Department of Agriculture (DA) provided the list of accredited suppliers of the VCO cold processed machines, and assisted DFC’s participation in the 2023 Philippine Food Expo Exhibition.

An attached corporation of the DA, the Philippine Coconut Authority spearheads the development of the country’s coconut and other palm oil industry to their full potential. The Dumapays’ firm, now registered under the PCA, has a suite of benefits, including access to important updates (especially trade trends and policies) on the local and global coconut markets, and support in terms of endorsement to potential domestic and foreign buyers.

For its part, the Department of Trade and Industry’s DTI-Cordillera Administrative Region (CAR) office offered robust support, including intellectual property training to protect the firm’s corporate and product brands (Dumapayao Farms Corp. and Zumigui Gracefield, respectively).

For actual product development, marketing, and distribution support, the DTI backed DFC via three programs in the agency’s extensive assistance ecosystem: DTI Apayao’s ONE TOWN, ONE PRODUCT (OTOP) Philippines, a priority stimulus program for that endeavors to capacitate MSMEs—“OTOPreneurs”—to innovate and produce market-ready products and services; ARISE Plus Philippines, which aims to foster inclusive economic growth and poverty reduction in the through improved international trade performance and competitiveness; and, through efforts of the Export Marketing Bureau. The DTI also brought in DFC to form part of the CAR contingent in regional, national, and international-scale events, the most recent being the International Food Exhibition (IFEX) Philippines held last May 10-12.

The Department of Science and Technology (DOST), meanwhile, provided technical assistance: earlier, on DFC’s coconut vinegar production, and most recently, for the development of the Zumigui Gracefield all-natural coconut flour product. DOST funneled the latter grant through its Small Enterprise Technology Upgrading Program (SETUP).

Equally important, the agency, particularly through its DOST Apayao office, also provides training and mentoring for the DFC farming and production team, the majority of whom are members of Apayao’s local Indigenous People (IP) community.

From ‘crab mentality’ to ‘coconut mentality’

Even with multi-agency and LGU support, however, a number of businesses fail to thrive due to unfair practices of direct competitors: another example of the notorious Filipino “crab mentality” of pulling others down. However, DFC’s Reynold and Judith Dumapay discovered to their relief and surprise that the Philippines’ main trade group for VCO, Virgin Coconut Oil Producers and Traders Association of the Philippines Inc. (or VCO Philippines), were, in their own experience, “incredibly supportive, and we received a lot of mentoring, and even practical tips such as the distinctions between [VCO centrifuge] machine types and brands.”

Also a welcome partner in the entire growth journey for MSMEs such as DFC: large enterprises and their Corporate Social Responsibility (CSR) arms that invest in other forms of capability building. In DFC’s case, BPI Foundation, Inc sponsored mentoring sessions through its BPI Sinag Synergy business challenge for social enterprises. DFC emerged as one of the top 25 out of the initial field of 59 finalists, and thus qualified for the program’s Online Bootcamp.

Luna’s local brand meets global markets

AS a relatively new social enterprise rooted in the second-class municipality of Luna, Apayao, DFC further benefited from the two-pronged support from DTI—through the agency’s on-ground, grassroots business development support, and through DTI’s Center for International Trade Expositions and Missions (CITEM). As the DTI’s export promotion arm, CITEM counts IFEX Philippines 2024 as just one in its wide roster of promotional programs and activities.

CITEM focuses on developing, nurturing, and promoting globally competitive small and medium enterprises (SMEs), exporters, designers, and manufacturers by implementing an Integrated Approach to Export Marketing in partnership with other government and private entities.

As DFC’s case demonstrates, CITEM fills this very vital link for the company, and many other community-based and social enterprises in the Philippine regions: a fast track to connect with key players in the export markets.

All these illustrate how a well-rounded approach in government support—with strategic synergies between and among agencies, regional offices, and the local government units, plus highly-targeted and relevant interventions from large enterprises—can go a long way in ensuring that embryonic businesses can get their footing, become stable, and thrive with resilience.

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The Impact Of The Coronavirus (COVID-19) On Businesses in the Philippines

May 29, 2020 | Ronnie Salonga

What is the impact of the coronavirus (covid-19) on businesses in the philippines, new normal established, impact on the economy, barriers on trade, monetary struggles of small and start-up businesses, dwindling of essential stocks.

It has been more than two months since the quarantine was implemented and the effects of COVID-19 on businesses in the Philippines are drastically being felt. With several establishments forced to close down, the Philippine economy could be on its way to the verge of collapse if the pandemic isn’t contained.

Since the implementation of the Enhanced Community Quarantine (ECQ), companies are trying to keep up with the new set of demands and protocols. However, it will not suffice if the pandemic persists for a longer period of time. Here are some insights into the impact of COVID-19 on businesses in the Philippines .

We often hear words like “social distancing” and the “new normal” these days as we live through the pandemic. For the educational sector, schools have been suspended by the government since last March. Both the Department of Education and various college universities are now eyeing online learning as their tool to continue progressing academically during these times. However, these have proved to be insufficient as not all of the population has a stable broadband connection in their homes.

Certain businesses that are labeled essential have been allowed to continue on running, with a few rules implemented to maintain safety measures . Public markets are strictly implementing the rules of social distancing, with some municipalities providing “mobile palengkes” to their citizens. Other essential services such as hospitals, food establishments, and banks also continue to provide work for their employees.

However, people who had jobs in what are considered “non-essential sectors” are now taking the negative blow of this new normal. Some employers are unable to provide full compensation or work from home arrangements. Employees who live in other cities are having difficulty traveling to their workplace due to checkpoints. Other companies have suffered such a great loss that they had to let some people go. The pandemic has been crippling both Filipino families and businesses alike.

There is no doubt that the economy as a whole is now on the brink of a recession. Several business industries have taken a much slower pace due to the global pandemic affecting the flow of supply and demand in the country. According to Rappler , the National Economic and Development Authority (NEDA) has estimated that the Philippines’ gross domestic product (GDP) may be as low as -0.6% this year.

It is estimated that the Philippines may lose between P276.3 billion and P2.5 trillion based on how long the pandemic will ensue. In the worst-case scenario, the economy may slow down to a recession as labor supply drops to 19.7%. On the other hand, labor supply may only drop to 7.4% with most of the industries thriving if the country successfully combats the virus in the second quarter of the year.

Still, as COVID-19 continues, many Filipinos may lose their jobs. Industries like BPO, tourism, and aviation sectors have laid off their employees due to a lack of financial resources to support them. Meanwhile, in terms of construction, it is widely known that the infrastructures of the “Build, Build, Build” program are reliant on China for funding. Having the pandemic around paused not only the construction itself but also the compensation of the workers involved. Many of whom are daily wage earners.

Additionally, there are still several business buildings that are yet to be finished. The pause in construction due to COVID-19 may postpone future economical endeavors.

To keep our economy breathing, the Philippines imposed no restrictions on imports and exports within the country. An article by Pharmaceutical Technology stated that according to the Philippine Statistics Authority (PSA), China is the country’s top trading partner, making up 18.8% of its total trade. This is together with Korea and Japan in terms of imports.

The coronavirus may result in a more subdued trading economy in the Philippines for the year 2020. But keeping the import-export system alive may help our economy survive . As for healthcare supplies and equipment, the Philippine government ordered that they will not be subjected to taxes and fees. This is in compliance with the Republic Act No. 11469, also known as the “Bayanihan Heal As One Act”. This allows the country to get the necessary supplies at ease without any further restrictions. This greatly benefits the great influx of COVID-19 patients in need.

Big conglomerates may survive the current economic crash, but micro, small, and medium enterprises (MSMEs) in the Philippines are taking the hardest hit financially. According to the latest List of Establishments from the Philippine Statistics Authority (PSA), there are 998,342 MSMEs in the country, which takes up 99.52% of all local businesses as of 2018. The lack of consumer demand tests businesses’ financial capacity to keep their enterprises afloat, together with trying to support their workforce. Some MSMEs try their best to match today’s algorithm of demands by offering online and delivery services. However, lessening of employees are needed to keep up with their financial demands.

According to an article by CNN Philippines , the government has already allotted a P120-billion credit guarantee program and P51-billion wage subsidy programs for micro-businesses. This is through the Department of Finance together with the Department of Trade and Industry’s low-interest lending program for small businesses. These may aid entrepreneurs in maintaining their financial assets as well as compensating their workers.

In the midst of a pandemic, it is a common occurrence for essential supplies to be often out of stock. Two months into the imposed Enhanced Community Quarantine throughout Luzon, people have frantically hoarded rubbing alcohol, food supplies, and other goods. Forcing the government and supermarkets to create new rules to prevent further shortages.

Some businesses ramped up their production, with the government promising incentives to companies producing essential goods through commonly imposed taxes. The government also allowed the return of 50% of the workforce to aid in the production process. Other businesses are using online means to deliver products to their consumers and other unorthodox methods for them to survive the negative economic effects of the pandemic.

These issues may continue to persist if we don’t combat the virus sooner. While private conglomerates may survive the economic crash, smaller sectors and Filipino workers may eventually succumb to losing finances. Until the pandemic is resolved, the Philippine economy may take devastating damage as days go by.

Key Takeaway

The sudden socio-economic threat imposed by COVID-19 is a crisis currently endured by countries across the globe. While its impact is felt greater by the day, the survival of its most important sectors are pillars to preventing economic collapse . With the effect of COVID-19 on businesses in the Philippines, it is truly a challenging time for all. However, once settled into the new normal and after planning for solutions together post-pandemic, businesses may rise once again.

Author’s Note : This entry was optimized by the best SEO Services Agency in the Philippines – SEO Hacker

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Turkey's energy minister held talks with Chinese authorities and companies on mining projects, nuclear and renewable energy this week, his ministry said on Tuesday, and the two countries signed a preliminary pact on energy conversion.

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Morning Briefing: Asia Pacific Edition

Thursday briefing: slovakia’s leader was shot.

Also, mixed reviews for King Charles’s portrait.

By Amelia Nierenberg

Shooting left Slovakia’s leader in ‘life-threatening’ condition

Robert Fico, Slovakia’s prime minister, was shot five times and critically wounded yesterday. Officials said the attack appeared to be an assassination attempt and was politically motivated. Police said a suspect had been detained.

The interior minister said Fico was still in surgery hours after the shooting and remained in critical condition. Here’s the latest .

Videos from the scene showed the gunman shooting Fico in Banikov Square, in the center of the town of Handlova. The attacker is seen standing with other people behind a barrier before shooting Fico at close range when he came to greet them.

Who is Robert Fico? The 59-year-old politician is serving his third term. He has aligned with the Hungarian prime minister, Viktor Orban, in opposing aid to Ukraine , and has strong ties to Russia’s leader, Vladimir Putin.

China sent dozens of ships to confront Filipino fishing boats

China has deployed dozens of coast guard and maritime militia ships toward Scarborough Shoal, a disputed atoll in the South China Sea, to block a fleet of about 100 small Filipino fishing boats. While such confrontations have become commonplace as Beijing tries to assert control over a region far from its borders, this was an escalation.

“What we’re seeing this time, I would say, is definitely of another order,” said the director of SeaLight, a group that monitors the sea. He called China’s response a show of “overwhelming force.”

Background: The Filipino group organizing the flotilla of fishing boats said it wanted to assert the Philippines’ claims to Scarborough Shoal. The shoal, which Beijing calls Huangyan Island, has been under Chinese control since 2012. Filipino fishermen had long worked there, but since then their access has been restricted and sporadic.

Russia’s momentum in Ukraine has the U.S. worried

The White House is watching as Russia’s new offensive picks up speed in Ukraine’s northeast. U.S. officials are privately concerned that it could change the trajectory of the war , perhaps even reversing Russia’s once-bleak prospects.

Moscow’s electronic warfare techniques — which came to the battlefield late — have taken out artillery and drones provided by the U.S. and NATO. And the delay in U.S. aid allowed Russia to gain a huge artillery advantage. Ukraine’s lack of air defense ammunition meant Russia could use its air power with more impunity.

Analysis: Some experts say that Moscow’s true goal in taking territory around Kharkiv is to force Ukraine to reinforce the city, weakening the front lines elsewhere. A thinly spread Ukrainian military could give Russia the chance for another push in June.

For more: These maps show Russia’s advances .

WAR IN GAZA

Rafah: Israel directed many Palestinians to a “humanitarian zone.” Satellite imagery shows an overcrowded area that is damaged by strikes and lacking medical care.

Arms: The Biden administration told Congress that it intended to sell Israel more than $1 billion in new weapons .

Military: The leaders of Israel’s armed forces are frustrated with Prime Minister Benjamin Netanyahu because he has yet to develop a plan to govern Gaza after the war.

MORE TOP NEWS

Singapore: The prime minister, Lee Hsien Loong, stepped down after 20 years . He oversaw a rise in prosperity — and discontent.

Hong Kong: YouTube said it would block the access of Hong Kong users to the protest anthem “Glory to Hong Kong,” complying with a court order.

New Caledonia: After deadly riots broke out, France moved to declare a state of emergency in the South Pacific territory, which has long tried to gain independence.

U.S. election: President Biden and Donald Trump have agreed to debates in June and September, which would be their first onstage clashes in more than three years.

Orcas: The whales sank another boat near the Strait of Gibraltar.

MORNING READ

Kei Kobayashi was the first Japanese chef to earn three Michelin stars in Paris. Now, he has come back to Japan to try to build an empire .

Lives lived: A.T. Ariyaratne, a Sri Lankan who fought to alleviate poverty in his country, has died at 92 .

CONVERSATION STARTERS

Talk about Bumbling: The dating app Bumble apologized after an ad campaign enraged women, its target audience.

The Bridgerton glow-up: Characters receive makeovers as they move from the sidelines of the plot into the spotlight.

Real estate: Some luxury buildings in the U.S. are offering at-home IV drips as an amenity.

ARTS AND IDEAS

King charles iii’s red portrait.

Royal portraits tend to be fairly staid, with symbols of state, of office, of pomp and lineage.

Which is why the new official portrait of King Charles III, painted by Jonathan Yeo, has created such a controversy . Some said he looked as if he were “burning in hell” or “bathing in blood.” A reference to “colonial bloodshed” rounded out the theme. Others compared it to a possessed portrait in “Ghostbusters II.”

This is not the first polarizing royal portrait. Take a spin through some other surprising or contentious paintings of royals .

RECOMMENDATIONS

Cook: Make a light coconut-miso salmon curry .

Read: In “ Chasing Hope ,” Nicholas Kristof recounts the highs and lows of his career as a Times correspondent.

Listen: This year marks the 50th anniversary of Cass Elliot’s death. This playlist highlights her range as a vocalist .

Block: Stop buying citronella candles. Try these effective mosquito repellers instead.

Heal: I was prescribed a long-term antibiotic. Is that safe ?

Play: Spelling Bee , the Mini Crossword , Wordle and Sudoku . Find all our games here .

P.S. My colleague David Pierson, who covers China, shared five things he’s enjoyed in Hong Kong .

That’s it for today. See you tomorrow. — Amelia

Email us at [email protected] .

Amelia Nierenberg writes the Asia Pacific Morning Briefing , a global newsletter. More about Amelia Nierenberg