12

LEARNING
ACTIVITY SHEET

APPLIED ECONOMICS
Quarter 3 - WEEK 6

Analyzing the Effects of

Contemporary Economic
Issues Affecting the Filipino
Entrepreneur
 LEARNING ACTIVITY SHEETS
Applied Economics 12
Quarter 3 - Week 6

Title: Analyzing the Effects of Contemporary Economic Issues Affecting the Filipino
Entrepreneur

Introduction
From the previous lesson, you have learned the importance of knowing the
characteristics of market structure. As a newbie in business, you were looking for
profitable market, where you will invest your resources. Having resources cannot
guarantee an entrepreneur that it will be a big success. Being an entrepreneur is not
an easy task. It entails uncertainty and risk, especially in this time of pandemic.

MELCS: Analyzing the Effects of Contemporary Economic Issues Affecting the

Filipino Entrepreneur AE 12 Quarter 3 Week 6

After going through this module, you are expected to:

1. Identify contemporary economic issues in the country; and
2. Analyze the effects of contemporary economic issues affecting the Filipino
entrepreneur.

Directions: Read and understand the statements. Write the correct answer on your
answer sheet.

1. What do you call the art of turning an idea into a business?

A. entrepreneurship
B. history
C. politics
D. sociology

2. What do you call an individual who has identified a need in the

marketplace and has come up with an innovative business idea to fill
that need?
A. entrepreneur
B. historian
C. politician
D. sociologist

2
3. Which refers to an asset or item acquired with the goal of generating
income or appreciation?
A. investment
B. rental
C. wage
D. tax

4. Which refers to the amount of interest due per period, as a

proportion of the amount lent, deposited, or borrowed?
A. capital gain
B. common stock
C. interest rate
D. dividend payment

5. What law protects housing tenants (especially in the lower-income

class) against unreasonable rent increases?
A. Republic Act 9652
B. Republic Act 9653
C. Republic Act 9654
D. Republic Act 9655

6. What agency of the government issues wage order for minimum wage
earners?
A. BIR
B. DepEd
C. DOLE
D. DSWD

7. Which is NOT a part of CARAGA Region?

A. Butuan
B. Bislig
C. Cabadbaran
D. Cebu

8. What is known as the lifeblood of the economy?

A. investment
B. rental
C. wage
D. tax

9. Which refers to the lowest wage permitted by law below which if paid
by employer will subject him to penalty from the government?
A. minimum wage
B. maximum wage
C. maximum wage
D. maximum salary

3
 10. What will happen if there are increase of investment to Filipino
entrepreneurs in the country?
A. It will result to colonial mentality.
B. Foreigners will invade the country.
C. It will create jobs and opportunities to Filipinos.
D. Filipino entrepreneurs will be discouraged to continue their
business.

Direction: Look at the words below. Please unscramble the word to its correct
position. The first letter is correct. The answer must be written in a separate
answer sheet.

TERMS THAT ARE CONNECTED WITH MARKET

1 E-N-T-R-U-P-R-E-N-E-E-R
2 E-N-V-I-S-T-M-E-N-T
3 T-E-X-A-S
4 R-A-N-T-E-L
5 W-E-G-A

Business, as they say, is like a chance. It takes a brave heart to invest their
resources with no guarantee that there will be a return of investments. In this
learning activity sheet, let us discuss the contemporary issues affecting the Filipino
entrepreneurs.

ENTREPRENEURSHIP
According to Fred Wilson, ―Entrepreneurship is the art of turning an idea
into a business‖ (Venture Capitalist). Entrepreneurship is the ability to know what
products and services are needed by people and to be able to provide these things
at the right time, at the right place and to the right people, and at the right price.

WHAT ENTREPRENEURS DO
An entrepreneur is an individual who has identified a need in the
marketplace and has come up with an innovative business idea to fill that need.
Entrepreneurs assemble and then integrate all the resources needed –the money,
the people, the business model, the strategy—needed to transform an invention or
an idea into a viable business. Entrepreneurs are willing to take on the many risks
of implementing their idea, and to also take on the role as leader of their company
or organization. They assume full responsibility for the execution, success, or
failure of the business (https://www.careerexplorer.com/careers/entrepreneur/).

4
 In the Philippines, we have successful entrepreneurs like Henry Sy, Sr. and
Tony Tan Caktiong. Henry Sy, Sr. was the founder of the SM Group and is
currently, Chairman Emeritus of SMIC, SM Development Corporation (SMDC),
Highlands Prime, Inc. (HPI) and BDO Unibank, Inc. (BDO) and Honorary Chairman
of China Banking Corporation. Sy topped the Forbes Philippines Rich List for
eleven years in a row, through 2018, and was worth an estimated $19 billion when
he died at age 94 on January 19, 2019. On the other hand, Tony Tan Caktiong is
the Chairman of Jollibee Foods Corporation (JFC), the undisputed leader in the
Philippine's fast-food industry. He started the business with two ice cream parlors
in 1975 and created Jollibee in 1978.

FUNDAMENTAL BUSINESS MODEL

Source: https://donboscolms.com/wp-content/uploads/2020/10/Lesson-5_Contemporary-Economic-Issues.pptx

This is the fundamental business model used by entrepreneurs around the

world. The business owners need capital in a form of cash so that they can supply
the cost of their products and services. After producing these products and services
they will sell these items so that they can continue their operation. In return, they
will be receiving profit from their item in a form of cash.

INVESTMENT
In putting up business, it is necessary to know the initial investment of the
entrepreneur so that he able to assess if he needs additional investment. What is
investment? Investment is an asset or item acquired with the goal of generating
income or appreciation. It is defined as building up the capital stock for more
future production and consumption.

A. Long-Term Investments and Short-term Investments

Long-term investments are assets of the company which include stocks,

bonds, and real estate. Long-term investments are assets that a company intends
to hold for more than a year. When corporations are formed, they sometimes raise

5
funds by selling shares of ownership, or stocks to the public. Short-term
investment is an investment that will mature to cash within a one-year time and is
considered liquid. When someone invests in short-term stock and bonds, the
thinking is that these assets can be cashed in quickly. Short-term investments
have two main requirements.
1. These must readily be convertible to cash.
2. Management must intend to convert or sell the investment within 3 to 12
months.

B. Other Terms in Investments

Investing generally refers to using one's savings in a way that earns a
return. Investing includes the purchase of new plants, new equipment, new homes,
and net increases in inventories. Appreciation refers to an increase in the value of
an asset over time. Investors purchase shares of corporate stock hoping to earn
a return. Stockholders may earn a return from their stocks in two ways. They may
receive a share of the corporation's earnings as a dividend payment, or they may
earn a capital gain if they sell their stock for more than they paid for it. Shares of
common stock give their owners one vote per share when important decisions are
made for the firm. These decisions include electing a board of directors to oversee
the firm's operations. Owners of common stocks do not receive a dividend unless
one is declared by the firm's board of directors. When the entrepreneur has not
enough investment, he will resort to borrowings or borrow from financial
institutions like banks. The borrowings bear interest rates. This is the amount of
interest due per period, as a proportion of the amount lent, deposited, or borrowed.

INTEREST RATES
A loan that is considered low risk by the lender will have a lower interest
rate. A loan that is considered high risk will have a higher interest rate.
Businesses take loans to fund capital projects and expand their operations by
purchasing fixed and long-term assets such as land, buildings, and machinery.
Borrowed money is repaid either in a lump sum by a pre-determined date or in
periodic installments. The money to be repaid is usually more than the borrowed
amount since lenders require compensation for the loss of use of the money during
the loan period. The lender could have invested the funds during that period
instead of providing a loan, which would have generated income from the asset.

Effects to entrepreneur of investment and interest rate:

Low interest rate attracts more entrepreneurs to invest, while high

interest rates lessen the opportunity of the entrepreneurs to start their
business in the country.

RENTALS
As an investor, what will you do if you do not own land or space to be used
for your business? The answer is rent or lease a land or space. Rentals come from
a property from which the owner receives payment from the occupant(s), known as
tenants, in return for occupying or using the property. Republic Act 9653, better
6
known as the Rent Control Act of 2009, is the law that protects housing tenants
(especially in the lower-income class) against unreasonable rent increases. It also
provides the eviction rules that both landlords and tenants must observe. The Civil
Code has lease provisions that cover rentals above PHP 10,000 and those not
covered by the Rent Control Act of 2009, including commercial spaces and rent-to-
own units.

Effects to entrepreneur of rentals:

In Income Statement, rental fee is in expense account which means the
bigger the place/space, the higher the cost. Also consider the location; it is more
costly to rent in urban areas than in rural areas. For example, the rental fee of
100 square meter of land in Pasig City is P50,000.00 per month, but in
Mangagoy, Bislig City with the same area is only P20,000 per month. So, the
size and location matter when planning to rent.

MINIMUM WAGE
Minimum wage refers to the lowest wage permitted by law below which if
paid by employer will subject him to penalty from the government. In the
Philippines, the Department of Labor and Employment (DOLE) issued wage order
for minimum wage earners effective May 1. 2019. Minimum wage rates are
determined by factors such as poverty threshold, prevailing wage rates as
determined by the Labor Force Survey, and socio -economic indicators (i.e.
inflation, employment figures, Gross Regional Domestic Product, among others),
which insure better workers protection. This law establishes a minimum amount
that an employer can pay a worker for one day of labor.

DAILY MINIMUM WAGE RATE FOR REGION XIII CARAGA

Source: http://caraga.dole.gov.ph/default.php?retsamlakygee=25&resource=4605f628f91de21e4b5f9433f46e29eb

7
 DAILY MINIMUM WAGE RATE FOR DOMESTIC WORKERS IN
REGION XIII-CARAGA

Source: http://caraga.dole.gov.ph/default.php?retsamlakygee=25&resource=4605f628f91de21e4b5f9433f46e29eb

Effects to entrepreneur on minimum wage:

Over and above minimum wage is the voluntary productivity-based pay,

which encourages workers and enterprises to become more competitive and
productive by rewarding employees supplementary pay based on the quality of
their performance.

TAXES
Tax is the lifeblood of the economy. It fuels the social services provided by
the government to its citizen. A tax is a mandatory financial charge, or some other
type of levy imposed upon a taxpayer by a governmental organization to fund
various public expenditures. Failure to pay, along with evasion of or resistance to
taxation, is punishable by law. Taxes are considered inflows for the government
and outflows for firms. The way a tax is imposed often is justified in the basis of
one of two general principles: the benefits received and the ability to pay.

A. Benefits-Received Tax Principle

This principle relates taxes to the benefits taxpayers receive from a public
good. For example, gasoline tax payments increase the more people drive. The more
people drive, the more they benefit from roads that the gasoline tax finances.

B. Ability to Pay Tax Principle

This approach to taxes relates that those with a greater ability to pay are
taxed more. Income and property taxes usually rely on the ability to pay tax
approach.

8
 At the national level, taxes are imposed and collected pursuant to the
National Internal Revenue Code, the Tariff and Customs Code, and several special
laws. There are four main types of national internal revenue taxes: income, indirect
(value-added and percentage taxes), excise and documentary stamp taxes, all of
which are administered by the Bureau of Internal Revenue (BIR).

A. Corporate Income Taxes

The regular corporate income tax (RCIT) is 30% on net taxable income.
There is a minimum corporate income tax (MCIT) equivalent to 2% of gross income,
which applies beginning on the fourth year of commercial operation.

B. Withholding Taxes
Most income is subject to withholding of taxes. If the payor is classified as a
top-20,000 corporation or a top-5000 individual engaged in business, it is required
to withhold on all payments for the purchase of goods (1%) and services (2%).
Withholding taxes on income subject to the RCIT are creditable against the
calculated liability.

C. Indirect Taxes
A 12% VAT is imposed on the gross selling price on the sale, barter or
exchange of goods and properties, as well as on the gross receipts from the sale of
services within the Philippines, including the lease of properties.

D. Excise Taxes
In addition to VAT, excise taxes are imposed on the following: alcohol,
tobacco, petroleum products, automobiles, mineral products, and non-essential
goods such as jewelry and precious stones, perfumes, yachts, and other sport
vessels.

E. Documentary Stamp Tax

A documentary stamp tax (DST) is required for certain documents,
transactions or instruments specified in the tax code when the obligation or right
arises from Philippine sources or when the property is situated in the Philippines.

Effects to entrepreneur of taxes:

High taxes tend to lessen investment because this is considered an additional

cost on the part of the entrepreneur. Low taxes mean fewer government
projects such as school buildings, roads, bridges and providing social services
to people. How can entrepreneurs gain from tax? Government considers new
entrepreneurs with tax holiday up to 6 years and vat exemption for purchase
of supplies of the firm that is going to export 100% of its product.

9
LEARNING ACTIVITY 1: THUMBS UP! THUMBS DOWN!
Direction: Read each statement very carefully. Write the word Thumbs Up if
you agree with the statement, and Thumbs Down if you disagree with the
statement. Answer it on a separate sheet of paper.

1. Low rental fees mean more businesses will be created.

2. High interest in external borrowings attracts potential Filipino
entrepreneurs.
3. Increase in minimum wage will increase the buying power of workers.
4. High tax rates mean easy life on Filipino entrepreneurs.
5. Entrepreneurs always consider the following when making business
decisions: rental fees, tax rates, minimum wage rate, amount of
investment and the interest rate.

LEARNING ACTIVITY 2: MATCHING TYPE

Direction: Match column A with column B. Write the letter of your choice
before the number. Answer it on a separate sheet of paper.

MATCH A MATCH B

A. It is a mandatory financial charge, or some

1. Rent other type of levy imposed upon a taxpayer
2. Minimum Wage by a governmental organization to fund
3. Tax various public expenditures.
4. Investment B. It come from a property from which the
5. Interest Rate owner receives payment from the
occupant(s), known as tenants, in return
for occupying or using the property.
C. It refers to the lowest wage permitted by
law below which if paid by employer will
subject him to penalty from the
government.
D. This is the amount of interest due per
period, as a proportion of the amount lent,
deposited, or borrowed.
E. It is an asset or item acquired with the goal
of generating income or appreciation.

10
LEARNING ACTIVITY 3: Analyze and Think like an Entrepreneur!
Direction: Read and understand the questions carefully. Choose the letter of the
correct answer. Answer it on a separate sheet of paper.

1. Jessie is an OFW. Due to the COVID-19 Pandemic, the company decided to

reduce their number of employees and he is one of them. He decided to open his
milk tea business in Espiritu St. He ran his business for a month. His business
is not doing well since he is new in the market. Despite the challenges, he
striving to put his name in the Bislig. One day, his landlord told him that he will
increase his store rental by Php 5,000 per month. What do you think is the
effect of this rental to our Filipino entrepreneur? Jessie will
A. increase the price of his milk tea so that he can afford the rent.
B. decrease the price of his milk tea so that he can attract more customers.

2. Lea, a young Filipino entrepreneur has an established small sari-sari store in

Mangagoy. Since she wanted to have more money for her business so she joined
the M2M Investment wherein her money will be doubled in a month. She used
the earnings in her store as an investment to M2M Company. She knew that
M2M Company double your money is too good to be true, but she decided to
take the risk and invested all the store’s money. Three days before receiving the
money from M2M Company, the SEC reported the company as scam. What do
you think is the effect of the news regarding M2M Company to our Filipino
entrepreneur? Lea will
A. invest more money to M2M Investment.
B. report the M2M and she will try to loan from the bank to save her sari-
sari store.

3. Lady Lee, a young Filipino entrepreneur owned a travel and tour agency in
Mangagoy. Since it was not convenient for people to travel due to COVID-19
Pandemic last April 2020, she is struggling to sustain the minimum wage to her
employees. What do you think is the effect of the news regarding M2M Company
to our Filipino entrepreneur? Lady will
A. shift her travel and tours to private transportation that follows the IATF
protocol.
B. continue her travel and tours and encourage people to take vacations
despite the COVID situation.

4. Paulie Anne is an employee at a company in Cebu City. Due to the COVID-19

Pandemic, the company decided to reduce their number of employees and she is
one of them. Paulie Anne decided to borrow money from lending company to
support her start-up business. However, her profit is not enough to pay for the
interest rate from her amount borrowed. What do you think is the effect of this
situation to our Filipino entrepreneur? Paulie Anne will
A. increase the price of her items so that she can afford the interest rate.
B. go to another lending company so that she can pay for the interest rate.

11
5. Due to the lockdown because of the COVID-19 Pandemic computer shops were
forced to closed. Because of this Francis James, a computer shop owner was
not able to pay his tax. What do you think is the effect of this situation to our
Filipino entrepreneur? Francis James will
A. sell all his computer units.
B. offer his neighbors to rent his computer sets since it is useful in their
online class and work from home ventures.

Post Test

Directions: Read and understand the questions carefully. Choose the letter of the
correct answer.

1. What is known as the lifeblood of the economy?

A. investment
B. rental
C. wage
D. tax

2. What agency of the government issues wage order for minimum wage
earners?
A. BIR
B. DepEd
C. DOLE
D. DSWD

3. Which is NOT a part of CARAGA Region?

A. Aklan
B. Bislig
C. Cabadbaran
D. Tandag

4. Which refers to the lowest wage permitted by law below which if paid
by employer will subject him to penalty from the government?
A. minimum wage
B. maximum wage
C. maximum wage
D. maximum salary

5. What will happen if there are increase of investment to Filipino

entrepreneurs in the country?
A. It will result to colonial mentality.
B. Foreigners will invade the country.
C. It will create jobs and opportunities to Filipinos.
12
 D. Filipino entrepreneurs will be discouraged to continue their
business.
6. JL, an investor purchase shares of corporate stock hoping to earn a
return. Her stockholders receive a share of the corporation's
earnings. What is this term called?
A. capital gain
B. interest rate
C. common stock
D. dividend payment

7. Bruce, an investor purchase shares of corporate stock hoping to earn

a return. His stockholders receive if they sell their stock for more
than they paid for it. What is this term called?
A. capital gain
B. interest rate
C. common stock
D. dividend payment

8. Luca hold shares give his owners one vote per share when important
decisions are made for the firm. What do you call the shares that
Luca hold?
A. capital gain
B. interest rate
C. common stock
D. dividend payment

9. Joseph is paying PHP 15,000 for his lease provisions in an area in

Mangagoy. What law does his lease provision adhere?
A. The Civil Code
B. Republic Act 9262
C. Republic Act 7610
D. Republic Act 10354

10. Mr. Montalban wants to open his store in Panaghiusa District. He

borrowed from the bank wherein he is told to pay an amount of
interest due per period, as a proportion of the amount lent. What is the
term referred by the italicized words?
A. capital gain
B. interest rate
C. common stock
D. dividend payment

13
 10. B 5. C 5. B
10. C 9. A 4. A 4. A
9. A 8. C 3. D 3. A
8. D 7. A 2. C 2. B
7. D 6. D 1. D 1. A
6. C POST-TEST LEARNING ACTIVITY 3
5. B 5. Thumbs Up! 5. D
4. C 5. Wage 4. Thumbs Down! 4. E
3. A 4. Rental 3. Thumbs Up! 3. A
2. A 3. Taxes 2. Thumbs Down! 2. C
1. A 2. Investment 1. Thumbs Up! 1. B
TEST 1. Entrepreneur ACTIVITY 2
ACTIVITY 1
PRE- MOTIVATION LEARNING LEARNING

REFERENCES

Websites:

pdfcoffee.com_applied-economic-quarter-1-module-6-week6-1-pdf-free.pdf. Date
Retrieved May 5, 2021.

http://caraga.dole.gov.ph/default.php?retsamlakygee=25&resource=4605f628f91de2
1e4b5f9433f46e29eb. Date Retrieved May 6, 2021.

https://www.careerexplorer.com/careers/entrepreneur/. Date Retrieved May 6, 2021.

https://donboscolms.com/wp-content/uploads/2020/10/Lesson-5_Contemporary-
Economic-Issues.pptx. Date Retrieved May 6, 2021.

Prepared by: Evaluated by:

JESSEL L. LUSANTA-MONTALBAN LILIFREDA P. ALMAZAN, PhD.

Teacher II Education Program Supervisor - AP
Bislig City Division Bislig City Division
Region XIII- CARAGA Region Region XIII-Caraga Region

14