DIVINE WORD COLLEGE OF LAOAG

REQUIREMENT IN PRINCIPLES OF ECONOMICS WITH

TAXATION AND LAND REFORM

Philippine Companies and Businesses in

Imperfect Market and Their Form Structure
(Monopoly, Oligopoly, Monopolistic Competition, and Oligopsony)

Submitted by:
Jasper D. Aguinaldo

Submitted to:
Ms. Leilanie Mateo

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 May 25, 2016

MONOPOLY

 Meralco Electric Company is a perfect example of monopoly in the Philippines.

Monopoly in Philippines Meralco, the only supplier of electricity in the country.
MERALCO is a major example for monopoly because consumers have no choice
on who they want to provide service for their electricity. What happens is
MERALCO ends up charging whatever they want. You can't do anything about it
since if you complain or don't pay your bills, they just cut off your electricity.

 A mall is considered as a monopoly like SM and Ayala if compared to smaller

businesses who is depending its business survival from it. SM (SM Corp.) is the
biggest mall monopoly in the country. Think about it, if you have retail business
and you want to open a shop, your best bet is to open at an SM mall. If you
don't, what are the chances of your business getting the customers you want?
Everybody goes to the mall now, nobody goes anywhere else anymore. Because
of this, the business is at the mercy of the malls. If the mall decides they don't
want you anymore for any reason whatsoever, you're gone. Small businesses
tend to die around the area. Traffic is a mess because traffic is re-routed for the
benefit of the malls. Monopolies abound in the Philippines. No one has any
power to do anything about it. It just takes a little money and all the permits are
approved to build another mall.

  

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 OLIGOPOLY

 Oil Industry such as caltex, shell, sea oil, petrol is an example of oligopoly
whereby these businesses belonging in this particular industry are competitors
to each other as sellers of oil. They are only few of them because it is costly to
build a business to that particular industry. We can also observe their
advertisements on television but not that much as compared to those businesses
here in the Philippines which are in monopolistic competition.

 Auto manufacturers as to Motor Vehicle Assembly plants in the Philippines like

Delta Motors Corporation, Ford Motor Company Philippines, Isuzu Philippines,
Mitsubishi Motors Philippines, Nissan Motor Philippines are examples of an
oligopoly. They are only some of them who are offering the manufacturing
service and it is really hard for others to enter their market because of the fixed
cost of automobile manufacturing is very high.

 Philippine Film Industry– as to Philippine film studios, there are only few of
them competing in the market. Some of them are the following:
1. GMA Films. GMA Network Films, Inc. (formerly Cinemax Films,
commonly known simply as GMA Films) is a film production company
and a film studio established in 1995 by GMA Network Inc. in
the Philippines. Its movie productions have become both critical acclaim
and commercial successes, among which are Jose Rizal, Muro
Ami and Deathrow.
2. Star Cinema. ABS-CBN Film Productions, Inc. (Doing business as Star

Cinema), is a Filipino film and television production company and film

distributor based in Quezon City. It is the country's largest motion picture
company which regularly garners around 70% of the local film market.

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 Star Cinema has produced most of the highest grossing Filipino films of all
time, of which over 70 films has grossed at least a hundred million pesos.
3. Viva Films. Viva Films is a Filipino film production company founded in
1981 by Vicente del Rosario, Jr. It is owned by Viva Communications Inc.

 PLDT (Philippine Long Distance Telephone) and Globe Telecom are examples of
oligopoly. While these companies are not the only telecom providers, they make
up most of it. There are several minor players, BayanTel comes to mind, but
there exists an effective oligopoly. PLDT alone accounts for 70% of the telephone
services in the Philippines. Interestingly enough, PLDT was a government
monopoly until deregulation in 1995. 

 San Miguel Corp., Philippines is told also to be included as a oligopoly because

the San Miguel company not only controls 90% of the beer market, but 90% of
the soft drink market as well. It is to be considered in oligopoly market because
even though it owns a large percentage as to its product line, still it has
competitors. As to beverages - San Miguel Brewery Inc. is the Philippines' largest
brewer and a leading brand in Hong Kong and South China. San Miguel Beer is
one of the world’s top-selling beers. Its portfolio of beer products includes San
Miguel All Premium Malt, San Miguel Super Dry, San Mig Light, San Mig Strong
Ice, Red Horse Extra Strong Beer and others. Currently, Red Horse extra strong
beer is in fluently advertised in television now.

 Steel industry
 Aluminum
 Gas

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 MONOPOLISTIC COMPETITION

 Restaurants such as chowking, gerry’s grill, Max’s of Manila, red ribbon and
mang inasal are in monopolistic competition whereby there are so many
competitors that they have as to the same industry that they belong. As to the
list of Philippine restaurant chains here in the Philippines, there are more or less
a hundred of Philippine restaurants which absolutely proves that there are many
of them and to classify them to be in the monopolistic competition. We can
observe that there are multiple advertisements in different media whenever
there is a new product that a certain restaurant is promoting to the public. Also,
in order for them to hold the loyalty of their customer and to gain more
customers, they keep on improving their service and specially their food
products. They extremely compete to their competitors and one of their
techniques is by giving loyalty cards to their customer.

 Toothpaste such as colgate and Soap industries such as dove, belo soaps, etc. are
in monopolistic competition. Most likely with consumer goods, such as health
and beauty aids, fall into this category because suppliers try to differentiate their
product as being better so that they can justify higher prices or to have a larger
market share than the competition. The differentiation is significant or the
suppliers are convincing consumers that it is significant by using advertising or
other methods that would convince consumers of a product's superiority.
Suppliers of toothpaste try to convince the public that their product makes teeth
whiter or helps to prevent cavities or periodontal disease. As we can observe,
different of brands of toothpaste is being advertised in television.

 Monopolistic competition includes nestle, rebisco (in philippines).

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 Milk product such as drinking milk products and powdered milks is one of the
biggest categories in packaged food. Milk products like nido, bearbrand, alaska
and many others are competing for their customers. Companies fortify milk with
vitamins and/or minerals to ensure continued consumption among consumers.
This holds true for products targeted at both children and adults. Although milk
is known to naturally contain beneficial nutrients, the addition of vitamins
and/or minerals provides consumers with more reasons to consume drinking
milk products on a regular basis. The strategy that these companies promote
their milk products is through advertisements. Most of the time it is aired
through the television where they strategically compare it to a brand X and
specify the nutrient contents of their product and its contribution for human
health and development.

“Nestlé Philippines Inc led drinking milk products in 2014 with a

value share of 49% which it maintained in 2015 even though the
company dropped out of fresh milk with the withdrawal of Nestlé
Full Cream Milk in February 2015. This makes it the clear leader of
the category. The company’s strength lies in powder milk with
Bear Brand taking the lead with a value share of 36% in 2015. Its
other brands, however, also hold leading positions in their
respective categories. Chuckie for instance is the leader in dairy
only flavoured milk drinks. Bear Brand and Nestlé Fresh Milk,
meanwhile, hold the number one and two spots, respectively, in
shelf stable milk. Its different brands benefit from the company’s
reputation for quality. Continued advertising, meanwhile, helps
sustain recall. Its annual Choose Wellness Expo provides a positive
image for its brands as beneficial for wellbeing. Continuous

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 strategy development is done in order to be on top over its many
competitors.“

 Media (Philippines). There are multiple companies in media industry who are
competing in the market. Media is a collective communication outlets or tools
that are used to store and deliver information or data.  It is either associated
with communication media, or the specialized mass media communication
businesses such as; print media and the press, photography, advertising, cinema,
broadcasting (radio and television) and publishing. Because of many
competitors, companies in media industry try to catch the attention of the
customers by targeting the things that people want to know, to see and to hear
at certain time. Companies in media industry are listed below.

1. ABS-CBN Corporation
2. ABS-CBN Film Productions, Inc. (Star Cinema)
3. Aliw Broadcasting Corporation
4. All Youth Channels
5. Asian Television Content Philippines Corporation
6. Bombo Radyo Philippines
7. Brigada Mass Media Corporation
8. Broadcast Enterprises and Affiliated Media, Inc.
9. Christian Era Broadcasting Service International
10. DZCE-TV, also known as INC TV
11. Eagle Broadcasting Corporation
12. GMA Network Films, Inc.
13. GMA Network, Inc.
14. Intercontinental Broadcasting Corporation
15. Malaya Business Insight
16. Manila Broadcasting Company
17. Manila Bulletin
18. Manila Standard Today
19. Manila Times
20. Nation Broadcasting Corporation
21. Net 25
22. Newsbreak
23. Nine Media Corporation

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 24. People's Television Network
25. Philippine Broadcasting Service
26. Philippine Daily Inquirer
27. Philippine Star
28. Progressive Broadcasting Corporation (UNTV Channel 37)
29. Quest Broadcasting Inc.
30. Radio Corporation of the Philippines
31. Radio Mindanao Network Inc.
32. Radio Philippines Network
33. Rajah Broadcasting Network
34. Rappler
35. Regal Entertainment
36. Solar Entertainment Corporation
37. Sonshine Media Network International
38. Southern Broadcasting Network
39. TAPE, Inc.
40. Tribune Publishing Co., Inc.
41. TV5 Network, Inc.
42. UNTV
43. Viva Entertainment
44. ZOE Broadcasting Network

 Banks in the Philippines. Most common way of how banks compete to others is
through convenience and the size of branch/ATM networks that they have. As to
rates for savings, there is virtually no competition. They catch the attention of
people through small details like ATM fees. Having a large ATM network drives
accounts. Banks also incorporate in their strategies to make their customers to
be convenient with the services that they provide. Sometimes banks also used
the television media to advertise their service.

1. Al-Amanah Islamic Investment Bank of the Philippines, Islamic bank

2. Allied Bank, bank
3. Asia United Bank, bank
4. Banco de Oro Universal Bank, bank
5. Bank of Commerce, commercial bank
6. Bank of the Philippine Islands, bank
7. Cebuana Lhuillier Pawnshop, bank

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 8. Chinabank, bank
9. Citystate Savings Bank, thrift
10. Development Bank of the Philippines, development bank
11. EastWest Bank, universal bank
12. Equicom Savings Bank
13. Land Bank of the Philippines, universal bank
14. Metropolitan Bank and Trust Company, bank
15. Philippine Bank of Communications, commercial bank
16. Philippine Business Bank, savings bank
17. Philippine National Bank, bank
18. Philippine Savings Bank, savings bank
19. Philippine Veterans Bank, commercial bank
20. Philtrust Bank, commercial bank
21. Planters Development Bank, development bank
22. Rizal Commercial Banking Corporation, commercial bank
23. Security Bank, commercial bank
24. Union Bank of the Philippines, bank
25. United Coconut Planters Bank, bank

 PHILIPPINE TELECOMMUNICATION COMPANIES. Uses Tv ads to promote.

1. ABS-CBNmobile
2. Bayan Telecommunications Inc.
3. Cherry Mobile
4. Cignal Digital TV
5. Digital Telecommunications Philippines
6. Dream Satellite TV
7. G Sat
8. Global Destiny Cable
9. Globe Telecom
10. Philippine Long Distance Telephone Company
11. Red Mobile
12. Sky Cable Corporation
13. Smart Communications
14. Starmobile
15. Sun Cellular
16. Talk 'N Text - a subsidiary of SMART Communications
17. Touch Mobile - a subsidiary of Globe Telecom

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 OLIGOPSONY (Worldwide)

 Several examples of real life oligopsony markets which are currently active today
is the worldwide oligopsony market for cocoa. There are actually only three
large, major firms which purchase the wide majority of cocoa bean production
around the world. These three firms, Cargill, Archer Daniels Midland and
Callebaut, control most of the world's cocoa supply. The suppliers or sellers of
the cocoa bean production - in this case, the buyers are purchasing the
production of the beans and not necessarily the cocoa beans directly - must
compete among each other in order to receive business from one or more of the
three major firms involved in purchasing cocoa worldwide. The three firms, in
this case, have an extraodrinary amount of power over the sellers and can often
dictate where the cocoa beans are grown, how they are grown, how they are
sent and how they are sold. 

 Another example of a real life oligopsony market is tobacco in the United States.
The three companies of Altria, Brown & Williamson and Lorillard Tobacco
Company purchase about 90% of all the tobacco which is grown in the United
States by American tobacco farmers. The farmers or suppliers of the tobacco are
at a disadvantage because they must compete among one another to hopefully
secure the business of one of the big three firms involved in the purchase of
tobacco in the United States.

In both of the above real life cases, the sellers are at a disadvantage over the
sellers. The sellers must compete with one another for the buyer’s business
while also assuming most of the risk in the oligopsony market. For example, if a
seller vastly overproduces a particular product, it is the seller—and not the buyer
—who is at risk of losing money from overproduction. An oligopsony is greatly
beneficial to sellers while putting buyers at a disadvantage. 

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