Complete 2015 Entrepreneurship 062017-Min PDF

Philippine
Entrepreneurship
Report
2015–2016
Aida Licaros Velasco

Paulynne J. Castillo
Mitzie Irene P. Conchada
Brian C. Gozun
Gerardo L. Largoza
Junette A. Perez
Emilina D. Sarreal
Philippine Entrepreneurship
Report 2015–2016
Copyright © 2017 by De La Salle University
ALL RIGHTS RESERVED.

No part of this monograph may be reproduced, stored in a retrieval system,
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of De La Salle University, Manila, Philippines.
ISBN 978-971-555-639-2
Cover Design: John David Roasa

Layout: Elisa Jamon
Photography: Aida L. Velasco
Table of Contents
List of Tables and Figures v

Acknowledgment vii
Message from the President ix
Message from the Vice-Chancellor for Research and Innovation xi
Foreword xiii
Executive Summary xv

Part 1: The Global Entrepreneurship Monitor (GEM) Model 1
1.1. The GEM Research Project 3
1.2. The GEM Conceptual Framework 5
1.3. How GEM Measures Entrepreneurship 8
Part 2. The Philippines and GEM 2015 Global Report 11

2.1. Societal Perception on Entrepreneurship 12
2.2. Self-Perception About Entrepreneurship 14
2.3. Phases and Types of Entrepreneurial Activity 15
2.4. Motivation for Early-Stage Entrepreneurial Activity 16
2.5. Entrepreneurship Framework Conditions 17
Part 3. Entrepreneurship in the Philippines 19

3.1. The Philippines in a Snapshot 21
3.1.1. Philippine Competitiveness and Ease of Doing Business 23
3.1.2. SMEs in the Philippines 25

3.2. Entrepreneurship in the Philippines 27
3.2.1. Entrepreneurial Perception, Motivation, and Aspiration 30
3.2.2. Philippine Entrepreneurial Activity 32
3.2.3. Entrepreneurship Motivation and Aspiration 34
3.2.4. Gender in Entrepreneurship 36
3.3. Philippine Entrepreneurship Ecosystem 37
Part 4. Conclusion and Policy Recommendations
References 50
2015 Philippine National Team Members 53

List of Tables and Figures
Table 1. Economies Participating in the 2015 GEM Survey 4

Table 2. GEM Indicators 9
Table 3. Motivations for TEA Among ASEAN Countries 16
Table 4. The Philippines at a Glance 22
Table 5. Poverty Incidence 23
Table 6. 2017 ASEAN Ranking on Ease of Doing Business 25
Table 7. Jobs Generated per Establishment 27
Table 8. Demographics of 2015 Philippine APS Respondents 28
Table 9. 2015–2016 Determinants of Philippine Entrepreneurship 29
Table 10. Definitions of EFCs 38
Figure 1. GEM model of the entrepreneurship process 6

Figure 2. GEM conceptual framework 7
Figure 3. Societal perception on entrepreneurship 13
Figure 4. Self-perception phase 14
Figure 5. Phases and types of entrepreneurial activity 15
Figure 5. Motivations for TEA 17
Figure 6. EFCs in the ASEAN 18
Figure 7. Philippine and GEM Economies EFCs 18
Figure 8. Pillars of competitiveness score 24
Figure 9. MSMEs Industry Distribution 26
Figure 10. Jobs generated by Philippine enterprises 26
Figure 11. Entrepreneurial perception of Filipinos 31
Figure 12. Societal perception on entrepreneurship 32
Figure 13. Philippine entrepreneurial activity 32
Figure 14. Entrepreneurial motivation 35
Figure 15. Entrepreneurial aspiration 35
Figure 16. Informal investors’ rate 36
Figure 17. Male/female population and TEA activity 37
Figure 18. 2015 Philippine EFCs 39
Figure 19. 3-year Comparative Philippine EFCs 41
| v
Acknowledgment
The 2015 Philippine GEM National Team members would like to

express their deepest gratitude to
yy The International Development Research Centre of Canada

for giving the financial support to conduct this study,
yy The Angelo King Institute of De La Salle University for giving

the administrative and funding support for the project,
yy The Office of the Vice Chancellor for Research and Innovation,

The DLSU Science Foundation and The Ramon V. Del Rosario
College of Business for the funding support extended to the
project, and
yy The following for the guidance and assistance to the team

in conducting the study: Dr. Edgard Rodriguez of IDRC,
Dr. Roland Xavier of Tun Abdul Razak University, Prof.
Mike Herrington of GERA, and the members of the GERA
Coordination Team, namely, Chris Aylett, Alicia Conduras
Martinez, Forest Wright, and Jonathan Francis Carmona.
| vii
Message from the President
The 2015-2016 Philippine Entrepreneurship Report is a very

timely report on the state of entrepreneurship in the Philippines.
The report also confirms the University’s mission-vision, to be “A
leading learner-centered and research University bridging faith
and scholarship, attuned to a sustainable Earth, and in the service
of Church and society, especially the poor and marginalized”. The
role of small and medium enterprises to sustain the economic
development and inclusive growth of the Filipino people can
best be upheld if we understand the motivations, aspirations, and
activities of these entrepreneurs. The report helps us to do this.
For entrepreneurship to thrive, a supportive ecosystem must be

present. The policy recommendations outlined in the report aim
to help advance the country’s entrepreneurial factor conditions to
make doing business in the country easy and help our industries
to become more established businesses.
I would like to congratulate Dr. Aida L. Velasco and her team in

preparing this report. I would also like to extend our gratitude
to the International Development Research Center (IDRC) of
Canada for supporting this research.
Bro. Raymundo Suplido, FSC

| ix
Message from the Vice-Chancellor
for Research and Innovation
About the Speaker
Raymond R. Tan
The robust GDPis agrowth
full professor of chemical
over the past fewengineering,
years may university
signal
fellow and current Vice-Chancellor for Research and Innovation
the early stages of an economic awakening for the Philippines. at De
La Salle University, Manila, Philippines. His main areas of research are
However,
process systems whether the growth
engineering is sustainable
(PSE) and and sufficiently
process integration (PI). Prof.
inclusive remains uncertain. Since entrepreneurship
Tan received his BS and MS degrees in chemical engineering and is one of thePhD
in mechanical
key elements needed to ensure that the benefits of developmentthe
engineering from De La Salle University, and is
author
reach ofthe
more 180 Scopus-listed
grassroots, it is essentialpublications (including
to have empirical data onoverthis140
journal articles) with an h-index of 30, is member of the editorial board
aspect
of the of the local
journals Cleaneconomy. Theand
Technologies launch of the GEM
Environmental Philippines
Policy (Springer),
Report marks an important milestone in mapping the
Sustainable Production and Consumption (Elsevier/IChemE) and Int. J. of baseline
Supply Chain and Operations Resilience
state(Inderscience).
in the country,He is also
from the insights
which editor offor
thepolicy Recent Advances
booksdevelopment
in Sustainable Process Design and Optimization (World Scientific) and Process Design Strategies for Biomass
can be drawn by various stakeholders.
Conversion Systems (Wiley). For his scientific work, Prof. Tan has received multiple awards from the
National Academy of Science and Technology (NAST), the Commission on Higher Education
(CHED) and the National Research My congratulations to the GEM
Council of the Philippines Philippines project team, led by
(NRCP).
Dr. Aida Velasco of our Ramon V. del Rosario College of Business,
for the completion of this project, whose contents will surely play a
role in contributing to innovation-driven, entrepreneurial growth
of the Philippines in the years ahead.
Raymond Girard Tan

| xi
Foreword
De La Salle University-Angelo King Institute for Economic and

Business Studies (DLSU-AKI) is delighted for several reasons with
the release of the monograph Philippine Entrepreneurship Report
2015–2016. First, the monograph reinforces the commitment of
the University and the institute in building a research culture in
our institution through the generation of data sets and evidence-
based research outputs. Second, with the report the university’s
research thrusts on poverty alleviation via enterprise development
is adequately addressed. Third, with data analysis and the
provision of recommendations, DLSU, alongside the DLSU-AKI,
continues to contribute not only with the discourse on enterprise
development but more importantly in shaping policies that would
enhance the role of entrepreneurship in nation building. Fourth,
with the publication of the third annual report, DLSU-AKI has
demonstrated that it is a dependable research institute that can
handle multi-year research projects in partnership with other
institutions in the region.
As the ASEAN celebrates its golden year and with the establishment
of the ASEAN community one of the major thrusts of the regional
organization is the promotion of inclusive growth. In this light,
the Philippine Entrepreneurship Report 2015–2016 becomes
particularly significant as it addresses how entrepreneurship
can contribute to inclusive growth through the development of
small and medium enterprises. There are challenges in enterprise
development but numerous opportunities as well discussed in the
monograph. To address these challenges, included in the report
are recommendations on improving productivity, technology and
innovation, access to capital, enhanced regulatory environment,
and human resource development.
| xiii
For researchers and teachers in entrepreneurship, this monograph
is likewise relevant. Similar to the previous annual reports, the
2015–2016 report provides broad strokes on the characteristics,
perceptions, motivations, and aspirations of Filipino entrepreneurs.
But what is more pertinent to researchers in business enterprise
is the wealth of specific information at the individual level from
data sets generated over the years. With these valuable data sets,
researchers among our faculty and graduate students can craft
research designs that would probe on issues, problems, and
challenges confronting our Filipino entrepreneurs.
I congratulate Dr. Aida Velasco and her team from the Ramon
V. del Rosario College of Business and the School of Economics
of De La Salle University for this timely report. I also thank the
International Development Research Centre (IDRC) of Canada
for its continuing support of the Global Entrepreneurship Monitor
(GEM) project in which this Philippine report is a component.
Tereso S. Tullao, Jr., PhD

Director, DLSU-Angelo King Institute for
Economic and Business Studies
xiv |
Executive Summary
The results of the 2015 Philippine APS (Adult Population Survey)

and NES (National Experts Survey) show the confidence of Filipinos
in entrepreneurship as a mover to a better life and more progressive
society. Although government policies, structure, and bureaucracy
are seen as constraints to growth and sustainability of entrepreneurial
undertaking, more than half of the population sees business
opportunity in the country and close to 70% believe that they have
the necessary skills to seize the entrepreneurial opportunities in the
economy. On the other hand, there is a high business closure rate
mainly due to unprofitable business operations and difficulty in
accessing financing to continue business operations.
There is also a very high gender equity where the Philippines

registered the highest among 65 economies that participated in the
2015 GEM survey. As for the impact of entrepreneurship on the
economic development of the country, only 10.2% of total early-
stage entrepreneurial activity (TEA) or startup businesses envision
to employ more than 5 workers in the next 5 years, 5.5% offered
innovative products or services, and 2.7% are in the service industry.
Eighty-two percent of all TEA is into retail or wholesale business,
while only 2% is in manufacturing and 4.4% is into services.
The trend in entrepreneurship motivation, activity, and aspirations

was also analyzed from 2006–2015 (periods when the Philippines
joined GEM project). The data showed the same pattern for a factor-
driven economy where poor countries registered a higher percentage
of the population starting a business. Filipinos sustained their high
perception on their capability to be an entrepreneur, their belief that
there is good business opportunity in the country, and their view that
entrepreneurship is a good career option. Media has played a very
important role in generating more interest in entrepreneurship by
| xv
featuring successful Filipino entrepreneurs and offering programs
to encourage the formation and conduct of businesses.
Improvement in the economy dampens to some extent the interest

to start a business given the availability of more jobs during the last
10 years. More startup businesses are put up because of a better
opportunity for financial rewards and independence rather than
as a necessity or due to unemployment. There is also a sustained
increase in established businesses as the economy improved.
To support the development of small and medium enterprises,

policy recommendations are outlined to have more established
businesses and to further the activity of Philippine enterprises in
the global market. The following policy recommendations are
given:
• identification of industry priority areas where the country

can be more competitive globally,
• evaluation of the regulatory environment for startup
businesses and ease of doing business,
• development of innovation capabilities of the business
sector,
• introduction of entrepreneurship and its different forms
in all levels of education,
• creation of new ways of accessing financing through
equity,
• promotion of export capacity and ability to integrate in
the global supply chain, and
• enhancement of human capital development for women
and the youth on entrepreneurship.
xvi |
PART 1
The Global
Entrepreneurship
Monitor (GEM)
Model
The Global Entrepreneurship Monitor (GEM) research project
1.1 studies entrepreneurship in different countries to better
The GEM explain the role of small and medium enterprises in economic
Research development. Nineteen years after the initial 1997 study by
Project Babson College and the London Business School, over 100
countries now participate. GEM is now the largest worldwide
study on entrepreneurship.

The GEM research project conducts annual surveys of
entrepreneurial activity within the different phases of
businesses, attitudes and perceptions of the population towards
entrepreneurship, and the nature of the environment in which
entrepreneurship thrives in different economies.
GEM uses two surveys as its primary research instrument: the

adult population survey (APS) and the national experts survey
(NES). The APS is participated in by a minimum of 2,000
adults and asks about activity, phases of entrepreneurship,
and perception and intentions of the population regarding
entrepreneurship. The NES inquires about the opinion of
experts (minimum of 36 experts) on the entrepreneurial
environment in their respective countries that support or
constrain entrepreneurial activities and growth. There were 65
countries that participated in the 2015 APS and 62 in the NES.
There were 65 economies that participated in the 2015–2016

survey. These economies were classified according to their
level of economic development as used by the World Economic
Forum. These economies are classified according to the
three economic development stages, namely, factor-driven
economies, efficiency-driven economies, and innovation-
driven economies. Factor-driven economies are countries
that depend on agriculture and extraction businesses using
more labor factors and natural resources. Efficiency-driven
economies are countries that have become more competitive
with economic development supported by industrialization
The Global Entrepreneurship Monitor (GEM) Model | 3

and economies of scale where capital-intensive businesses
dominate the economy. Innovation-driven economies are
countries that rely more on new knowledge and expanding
into the service sector. A summary of the classification of
these countries is shown in Table 1.
Table 1. Economies Participating in the 2015 GEM Survey
Region Factor Driven Efficiency Driven Innovation Driven

Africa Botswana Morocco
Burkina Faso South Africa
Cameroon
Egypt
Senegal
Tunisia
Asia and Oceania India China Australia
Iran Indonesia Israel
Philippines Kazakhstan Japan
Vietnam Lebanon Republic of Korea
Malaysia Taiwan
Thailand
Turkey
Latin America and the Argentina
Caribbean Barbados
Brazil
Chile
Colombia
Ecuador
Guatemala
Mexico
Panama
Peru
Puerto Rico
Uruguay
4 | Philippine Entrepreneurship Report 2015–2016

continuation of Table 1...
Region Factor Driven Efficiency Driven Innovation Driven

Europe Bulgaria Belgium
Croatia Finland
Estonia Germany
Hungary Greece
Latvia Ireland
Poland Italy
Romania Luxembourg
Macedonia The Netherlands
Norway
Portugal
Slovakia
Slovenia
Spain
Sweden
Switzerland
United Kingdom
North America Canada
United States
Source: 2015 GEM Global Entrepreneurship Report
1.2 GEM defines entrepreneurship as “any attempt at new business

or venture creation, such as self-employment, a new business
The GEM organization, or the expansion of an existing business by an
Conceptual individual, a team of individuals, or an established business” (Kelly,
Framework Singer & Herrington, 2016). GEM tracks the entire entrepreneurial
process: from the stage where a potential entrepreneur is identified
to when the business is considered established, as shown in Figure
1. Some useful definitions follow.
A potential entrepreneur in the preconception stage is one who

intends to set up a business or pursue self-employment within
the next 12 months. A nascent entrepreneur in the conception
stage is one who has started a business within the last 12 months.
A firm’s birth covers the first year of a business, and its maturity
is said to be attained after three and a half years. Within the

Within the GEM framework, this period of 42 months makes up the so-called
total early-stage entrepreneurial activity or TEA. Businesses in existence for
longer than 3.5 years are considered established businesses or EB. The formal
depiction follows in Figure 1.
Source: 2015 GEM Global Report, p. 13
Figure 1. GEM model of the entrepreneurship process. Source: Gem 2015 Global Report, p.
Figure 1. GEM Model of the Entrepreneurship Process
13.
GEM framework, this period of 42 months makes up

As illustrated in Figure 2,theentrepreneurial activity entrepreneurial
so-called total early-stage is influenced activity
by two
factors: the country’s societal values towards entrepreneurship and the
or TEA. Businesses in existence for longer than 3.5 years
individuals’ psychology, demographic characteristics, and motivations. On
are considered established businesses or EB. The formal
depiction follows in Figure 1.
As illustrated in Figure 2, entrepreneurial activity is

influenced by two factors: the country’s societal values
towards entrepreneurship and the individuals’ psychology,
demographic characteristics, and motivations. On the
other hand, society and individual attitudes toward
entrepreneurship are enhanced or hindered by the social,
cultural, economic, and political conditions within a country.
These factors are determined by the national framework
conditions that impact the economic development of the
country and the entrepreneurial framework conditions
(EFCs) that directly influence entrepreneurial activity. The

Outcome (socio-
Social, Cultural,
economic
Political, Economic
Context development)
Entrepreneurial Output
(new jobs, new value added)
+
-
Entrepreneurial
Framework
Societal Values
Conditions
+
Framework
+
Conditions
Entrepreneurial Activity
National
About
- -
• By phase
- Nascent, new,
Individual established,
+ Attributes discontinuation
(psychological, + • By impact
Basic Requirements
- demographic, - - High growth,
Efficiency Enhancer motivation) innovative,
internationalization
Innovation and • By type
Business + - TEA, SEA, EEA
-
Source: 2015 GEM Global Report, p. 12
Figure 2. GEM Conceptual Framework
EFCs include entrepreneurial finance, government policy,

government entrepreneurship programs, entrepreneurship
education, research and development (R&D) transfer,
commercial and legal infrastructure, internal market
dynamics and entry regulations, physical infrastructure,
and cultural and social norms.
Figure 2 also provides the measures of the variables that

comprise basic requirements, efficiency enhancers, and
innovation and entrepreneurship. These data were gathered
from the NES. On the other hand, data on individual
entrepreneurial attitudes, activity, and aspirations were
obtained via the APS. Together, these data describe the
state of TEA and EB in the country and entrepreneurship’s
contribution to the overall development of the economy.

1.3 When GEM measures entrepreneurship, it looks at how
entrepreneurial activity within the population is influenced
How GEM
by attitudes and perceptions toward entrepreneurship
Measures and the types of activities in which the enterprises are
Entrepreneurship engaged. Entrepreneurship activity is also influenced by
the entrepreneurship ecosystem that supports or hinders
entrepreneurship. These measures are listed in Table 2.
Data on entrepreneurial aspirations, attitudes, and activity

were obtained from the APS conducted among, at least, 2,000
individuals aged 18–64. The survey collected information
on the different phases of entrepreneurial activity, from
entrepreneurial intention to early-stage entrepreneurial
activity to the point at which businesses are considered
established.
To measure entrepreneurial attitudes, GEM surveys the

respondents’ motivations to start a business and their
risk-taking propensity. The motivation to start a business
is classified as either necessity or opportunity driven.
Necessity-driven entrepreneurs are those who start a
business mainly because there are no other options available
to earning a living, while opportunity-driven entrepreneurs
are those who start businesses to exploit opportunities
and to increase their incomes or establish their financial
independence.
Environmental factors are referred to as entrepreneurship

framework conditions (EFCs), namely, entrepreneurial
finance, education for entrepreneurship, government policy,
government entrepreneurship program, R&D transfer,
internal market openness, physical infrastructure for
entrepreneurship, commercial and legal infrastructure for
entrepreneurship, and cultural and social norms. On the
other hand, the macro-level entrepreneurial framework
conditions were verified through interviews with at least
36 national experts. These experts were interviewed on

the following EFCs: financial support, general government
support, physical infrastructure, commercial and service
infrastructure, specific regulations, market openness, R&D
transfer, entrepreneurship education, and cultural norms
and values related to entrepreneurship. At least four experts
for each of the nine factors were interviewed. A minimum
of 25% of these experts had to be entrepreneurs and 50%
had to be professionals.
Table 2. GEM Indicators
Indicator Measures
Perception of societal values related to Entrepreneurship as a good career choice
entrepreneurship High status for successful entrepreneurs
Media attention for entrepreneurship
Individual self-perception about Perceived opportunities
entrepreneurship Perceived capabilities
Entrepreneurial intentions
Fear of failure rate
Entrepreneurial activity TEA
Motivational index (ratio of TEA
improvement-driven opportunity to TEA
necessity)
EB ownership rate
Business discontinuance rate
Entrepreneurial employee activity (EEA)
Perceived quality of the entrepreneurship Entrepreneurial finance
ecosystem Government entrepreneurship programs
Government policies: support and relevance,
government policies, taxes and bureaucracy
Entrepreneurship education at school age,
entrepreneurship education at postschool age
R&D transfer
Commercial and legal infrastructure
Internal market dynamics, internal market
burdens or entry regulation
Physical infrastructure
Cultural and social norms

PART 2
The Philippines
and GEM 2015
Global Report
Part 2. The Philippines and GEM 2015 Global Report
2.1 The Philippines registered the highest societal perception
of entrepreneurship in terms of entrepreneurship as a good
SocietalPerception on Entrepreneurship
2.1. Societal career choice and media attention on entrepreneurship
Perception on among countries in Southeast Asia in the 2015 GEM
Entrepreneurship
The Philippines registered the highest societal perception
survey. Comparisons with the ASEAN of entrepreneurship
countries and the in
terms of entrepreneurship as afactor-driven
good careereconomy choice andin media
are shown Figure 4. attention
Societal on
entrepreneurship among countries in Southeast
perception is defined Asia
by GEM in (2015)
the 2015
as the GEM
view orsurvey.
Comparison with the ASEAN countries andsociety
importance the factor-driven economyThis
places on entrepreneurship. is will
shown in
Figure 4. Societal perception is defined
affect theby GEM (2015)
entrepreneurial as theandview
intentions or people
support importance
the society places on entrepreneurship. This will Inaffect
accord to entrepreneurship. the entrepreneurial
the Philippines, 76% of the
intentions and support the people survey respondent placed high status on entrepreneurs and In the
will have regarding entrepreneurship.
Philippines, 76% of the population73% surveyed places high
regard entrepreneurship status
as a good onchoice.
career entrepreneurs
This
and 73% regard entrepreneurshipis as supported by the high media attention being given to by the
a good career choice. This is supported
high media attention being given to entrepreneurship.
entrepreneurship.
90
80
70
60
50 Entrepreneurship as a
Good Career Choice
40
30 High Status to Successful
Entrepreneurs
20
Media Attention for
10
Entrepreneurship
0
Figure 3. Societal
Source: Global Dataon entrepreneurship. Source: 2015 Gem Global Data.
perception
2015 GEM
Figure 3. Societal Perception on Entrepreneurship

2.2. Self-Perception About Entrepreneurship
In the self-perception phase, the Philippines registered the highest perceived

capabilities and entrepreneurial intentions and second highest in entrepreneurial
opportunities among all ASEAN countries. It also and
The Philippines registered higher
GEM 2015 Globalthan
Reportthe average
| 13
for factor-driven economies. In general, 70% of Filipinos believed that they have the
capability to be an entrepreneur while 54% believed that there is an opportunity in
2.2 In the self-perception phase, the Philippines registered
the highest on perceived capabilities and entrepreneurial
Self-Perception
intentions and second highest on entrepreneurial
about opportunities among all ASEAN countries. The country also
Entrepreneurship topped the average for factor-driven economies. In general,
70% of Filipinos believed that they have the capability to
be an entrepreneur while 54% believed that there is an
the country for entrepreneurialopportunity in the country
undertaking. However,for entrepreneurial
36.45% of undertaking.
Filipinos fear
failure, and only 37% have the intentions to be entrepreneurs.
However, 36.45% of Filipinos fear failure, and only 37% have
the intentions to be entrepreneurs.
80
70
60
Perceived opportunities
50
40
Perceived Capabilities
30
20 Fear of Failure
10
Entrepreneurial
0 Intentions
Figure 4. Self-perception
Source: phase. Source: 2015 GEM Global Data.
2015 GEM Global Data
Figure 4. Self-Perception Phase

2.3. Phases and Types of Entrepreneurial Activity
The Philippines registeredThe Philippines registered

the highest newthe highest on
business rate as measured by the
perceived capabilities and entrepreneurial
nascent entrepreneurship rate, new business ownership rate, and TEA. However, it
intentions and second
has registered the second-to-the-lowest highest
EB rate on highest discontinuance rate
and the
among ASEAN countries. entrepreneurial
Comparison opportunities
among ASEAN among all
countries can be seen in Figure
5. The Philippines also registered ASEAN thecountries.
highest EEA or employee entrepreneurial
activity among ASEAN countries. Although the self-perception of Filipinos on
entrepreneurship is high leading to a high rate of entry into entrepreneurial activity,
the rate of failure or business discontinuance at 12.2%, is the highest in ASEAN
leading
14 | to very low
Philippine EB rate. Thailand,
Entrepreneurship with the lowest entrepreneurial intentions
Report 2015–2016
among ASEAN countries, registered the highest EB rate.
36.45% of Filipinos fear failure, and
only 37% have the intentions to be
entrepreneurs.
2.3. The Philippines registered the highest new business rate as

Phases and Types of measured by the nascent entrepreneurship rate, new business
ownership rate, and TEA. However, it has registered the
Entrepreneurial second-to-the-lowest EB rate and the highest discontinuance
Activity rate among ASEAN countries. Comparisons among ASEAN
countries are presented in Figure 5. The Philippines also had
the highest EEA or employee entrepreneurial activity among
ASEAN countries. Although the self-perception of Filipinos
on entrepreneurship is high leading to a high rate of entry
into entrepreneurial activity, the rate of failure or business
discontinuance at 12.2%, is the highest in ASEAN leading to
very low EB rate. Thailand, with the lowest entrepreneurial
intentions among ASEAN countries, registered the highest
EB rate.
30.0
25.0
20.0
15.0
Indonesia
10.0
Malaysia
5.0
Philippines
0.0
Thailand
Vietnam
Figure 5. Phases and types of entrepreneurial activity.

Figure 5. Phases and Types of Entrepreneurial Activity
2.4. Motivation for Early-Stage Entrepreneurial Activity

The Philippines and GEM 2015 Global Report | 15
Entrepreneurs always detect opportunities that lead them to start a business.

Factor-driven economies are usually motivated to start a business out of necessity.
Although the self-perception of Filipinos on
entrepreneurship is high leading to a high rate of
entry into entrepreneurial activity, the rate of failure
or business discontinuance at 12.2%, is the highest in
ASEAN leading to very low EB rate.
2.4. Entrepreneurs always detect opportunities that lead them

to start a business. Factor-driven economies are usually
Motivation for motivated to start a business out of necessity. This can
Early-Stage be brought about by few job opportunities. However, as
Entrepreneurial economies improve and more job opportunities become
Activity available, entrepreneurship becomes an avenue to seize the
opportunity to earn more, improve one’s economic standing,
be financially independent, or serve the needs of the society
to make the community a better place to live in. For the
Philippines, the high TEA is motivated by the opportunity
to earn more. Comparisons of motivation to start a business
among ASEAN countries are shown in Table 3 and Figure 5.
Table 3. Motivations for TEA among ASEAN Countries
Necessity- Opportunity Improvement Motivational

Country TEA
Driven Driven Driven Index
Indonesia 17.7 19.0 80.3 36.5 1.9
Malaysia 2.9 13.7 86.3 67.0 4.9
Philippines 17.2 25.6 73.7 41.6 1.6
Thailand 13.7 17.2 81.2 75.6 4.4
Vietnam 13.7 37.4 62.6 57.9 1.5
Table 3 confirms that the Philippines and Vietnam had

a lesser percentage of TEA that is opportunity driven as
compared to the three efficiency-driven economies in
the ASEAN. These two countries also reported the lowest
motivational index. Motivational index is the ratio between
improvement-driven TEA and necessity-driven TEA.
Malaysia had the highest motivational index where those

ASEAN. These two countries have also registered the lowest motivational index.
Motivational index is the ratio between improvement-driven TEA and necessity-
driven TEA. Malaysia registered the highest motivational index where those
engaged in opportunity-driven
engaged inTEA is five times
opportunity-driven TEAmore thanmore
is five times those
thanengaged in
business driven by necessity.
those engaged in business driven by necessity.
100.0
90.0
80.0
70.0
60.0
50.0 Indonesia
40.0
Malaysia
30.0
20.0 Philippines
10.0
Thailand
0.0
Vietnam

Figure 5. Motivations for TEA.
Figure 5. Motivations for TEA
2.5. Entrepreneurship Framework Conditions
EFCs describe the environment entrepreneurship thrive.
2.5. The Philippines strongly supports entrepreneurship through
EFCs describe the environment
education.entrepreneurship thrive. The Philippines
and second strongly
Entrepreneurship It ranked first in postschool education
supports entrepreneurship through education. It ranked first in postschool
in school education (basic education) entrepreneurship
Framework
education and second in school education (basic education) entrepreneurship
training among the ASEAN economies. However, it ranked
Conditions
training among ASEAN economies. However, it ranked the lowest among ASEAN
the lowest in the region in government support and policies,
countries in government support and policies, taxes and bureaucracy, and
taxes and bureaucracy,
government programs. Malaysia ranked the andhighest
government
in programs.
financingMalaysia
followed by the
ranked the highest in financing followed by the Philippines.
Philippines. Overall, Malaysia and Indonesia have the highest EFCs as per experts’
opinion among the five ASEAN countries that participated in the GEM NES.
The Philippines
Indonesia and Malaysia providestrongly
a more supports
encouraging entrepreneurial environment
entrepreneurship through
compared to other countries in the ASEAN. education.
It ranked first in postschool education and
second in school education (basic education)
entrepreneurship training among the ASEAN
economies.

Overall, Malaysia and Indonesia have the highest EFCs as
per experts’ opinion among the five ASEAN countries that
participated in the GEM NES. Indonesia and Malaysia
provide a more encouraging entrepreneurial environment
relative to other countries in the ASEAN.
The Philippines is an archipelago made up of more than
7,000 islands and a founding member of the Association
Financing
Financing
for…
Cultural 8 Governmen
and social… 6 for…tal…
PhysicalCultural 8 Governmen
Taxes and INDONESIA
4
and…and social… 6 bureaucra… tal… MALAYSIA
Physical 2 Taxes and INDONESIA
Internal 4 Governmen
and… 0 PHILIPPINES
market… tal…bureaucra… MALAYSIA
Internal
2 Basic- THAILAND
Internal Governmen
market… 0 school… VIETNAM PHILIPPINES
market…
Commercial Post-school tal…
and…
Internal entrepren…
Basic- THAILAND
R&D
market… Transfer school… VIETNAM
Commercial Post-school
and… entrepren…
R&D
Figure 6. EFCs in the ASEAN.
Transfer
Figure 6. EFCs in the ASEAN

Figure 6. EFCs in the ASEAN.
Physical Infrastructure
5.47 (52/62)
School-level 7 Internal Market
Entrepreneurship 6 Dynamics 6.12 (8/62)
Education 4.99 (2/62)
5
R&D Transfer 4.06 4 Cultural and Social
(24/62) 3 Norms 5.71 (10/62)
2 Physical Infrastructure
Government 1 5.47 (52/62) Commercial and Legal
School-level GEM
Entrepreneurship 0 7 Internal5.2Market
Infrastructure
Entrepreneurship
Programs 3.58 (49/62) 6 (20/60) 6.12 (8/62) Philippines
Dynamics
5
Government Policies: Post-school
R&D
Taxes and Transfer 4.06
Bureaucracy 4 Entrepreneurship Cultural and Social
(24/62)
2.87 (52/62)
3 Norms 5.71 (10/62)
Internal Market
Government Policies:
Burdens or Entry 2 Support and Relevance
Regulation 4.13
1 3.85 (37/62)
Government(32/62) Entrepreneurial Commercial and Legal GEM
Entrepreneurship 0
Finance 5.09 (12/62) Infrastructure 5.2
Programs 3.58 (49/62) (20/60) Philippines
Figure Government
7. Philippine and GEM Economies EFCs.
Policies: Post-school
Figure 7. Philippine and GEM Economies EFCs Entrepreneurship
Taxes and Bureaucracy
2.87 (52/62) Education 6.3 (1/62)
Internal Market
Government Policies:
Burdens or Report
18 | Philippine Entrepreneurship Entry 2015–2016
Support and Relevance
Regulation 4.13
3.85 (37/62)
(32/62) Entrepreneurial
Finance 5.09 (12/62)
PART 3
Entrepreneurship
in the Philippines

3.1. of Southeast Asian Nations (ASEAN). It is classified as
a factor-driven economy-relying mainly on its natural
The Philippines in a
resources in generating income and economic activities
Snapshot for the country. However, as more businesses are engaged
in service, the country is expected to move from a factor-
driven to an efficiency-driven economy. The Philippines
posted a GDP growth rate of 5.8% in 2015, down from its
2014 GDP growth rate of 6.1%. For the period of 2012–
2015, the country reported an average GDP growth rate of
5.9%. Fifty-seven percent (57%) of its GDP is accounted
for by the services sector. The inflation rate in 2015 was
computed at 1.4%. On the other hand, the unemployment
rate in the country has been reduced from 8% in 2006 to 6.5%
in 2015. The Philippines’ economic and social indicators are
presented in Table 4.
Ranked as the 2nd most populous country in the ASEAN,

the Philippines has 101.57 million citizens, with an average
population growth rate of 1.9% for the period 2010–2015.
Twenty-eight percent (28%) of the population belongs
to the youth sector, aged 15–29 years old. The adult
literacy rate is 95.4%, whereas net enrollment in primary
education is 93.8%.
In 2015, foreign direct investment (FDI) went down by 1.6%.

Communication in the country is mostly done through
cellular phones with 118.1 cellular phones per 100 persons,
the third lowest in the ASEAN. The country is a heavy
internet user with 40.7% of the population subscribing to the
internet, the fourth highest among the ASEAN economies.
However, the country has the slowest broadband and the
most expensive internet connection in the region.
Entrepreneurship in the Philippines| 21

Table 4. The Philippines at a Glance
Indicators Value
Population (as of 2015) 100.98 Million
Land area (×1000 km ) 2
300
Density (persons/km2) 335
GDP growth rate (2015) 5.8%
Phase of economic development Factor-driven
Geography Archipelago (7,000+ islands)
Major islands Luzon, Visayas, Mindanao
Major minerals Gold, copper, iron, nickel
Competitive advantage Large domestic market, higher education and training,
buyer sophistication
Form of government Presidential, power equally divided among executive,
legislative, and judicial branches
Development plan focus (2010–2016) Inclusive growth
Inflation rate (2015) 1.4%
Unemployment rate (2015) 6.5%
Peso–US dollar exchange rate (October 2015) 46
Poverty incidence of total families (2015) 16.5%
Poverty incidence of population (2015) 21.60%
Simple literacy (2013) 96.5%
Functional literacy (2013) 90.3%
Source: Philippine Statistics Authority website, http://psa.gov.ph
The economic growth of the country in support of the

development plan, focusing on inclusive growth, has
resulted in the reduction of the poverty incidence for the
last 10 years. As can be seen in Table 5, poverty incidence
rates among the population and families have consistently
reduced from 26.6% and 21% in 2006 to 21.6% and 16.5% in
2015, respectively. Employment figures also improved with
the continuous reduction in unemployment rate from 8.0%
in 2006 to 6.5% in 2015.
3.1.1. Philippine Competitiveness and Ease of Doing

Business

Table 5. Poverty Incidence
Year Among the Population (%) Among Families (%)

2006 26.6 21
2009 26.3 20.5
2012 25.2 19.7
2015 21.6 16.5
Source: Phil. Statistics Authority Website, http://psa.gov.ph/poverty-press-releases
To address the new challenges the country is facing, a new

administration launched the Philippine Development Plan
2017–2022 which was developed based on the long-term
vision for the Philippines called Ambisyon 2040. Based on
a survey of 10,000 Filipinos, Ambisyon 2040 describe how
Filipinos see their lives in the country in 2040. Ambisyon
2040 outlines the three aspirations of Filipinos, namely,
Matatag (strongly rooted), Maginhawa (comfortable),
and Panatag na Buhay (secure). Quoting the report,
In 2040, we will all enjoy a stable and comfortable

lifestyle, secure in the knowledge that we have enough
for our daily needs and unexpected expenses, that we
can plan and prepare for our own and our children’s
future. Our family lives together in a place of our
own, and we have the freedom to go where we desire,
protected and enabled by a clean, efficient, and fair
government.
Based on the World Economic Forum Global Competitiveness

Report 2016–2017, the Philippines ranked 57th among
125 countries that participated in the survey, down from
the 47th ranking in 2015. Scores on the twelve pillars of
competitiveness are shown in Figure 8. Infrastructure got the
lowest score followed by innovation, technological readiness,
and institutions.

are shown in Figure 8. Infrastructure got the lowest score followed by innovation,
technological readiness, and institutions.
Institution
6
Innovation Infrastructure
5
Business 4 Macroeconomic
Sophistication 3 Environment
2
1
Health and
Market Size 0 Score
Primary…
Technological Higher
Readiness Education and…
Financial Goods Market
Market… Efficiency
Labor Market
Efficiency
Figure 8. Pillars of competitiveness score. Source: WEF Country Competitiveness Report 2016–2017.
Source: WEF Country Competitiveness Report 2016–2017
In terms of the ease of doing business, the Philippines performed poorly in

Figure 8. Pillars of Competitiveness Score
comparison with other ASEAN economies. Table 6 shows the ranking of the
different ASEAN countries out of the 190 economies that were ranked. The
Philippines ranked 99 with starting the business as the most difficult to deal with in
the country. Protecting minority investors is not very much upheld in the country,
In terms of the ease of doing business, the Philippines
followed by enforcing contracts. The next difficulties that businessmen have to
performed
hurdle in the country are the procedurespoorly in
in comparison withand
paying taxes othergetting
the ASEAN
credit.
economies. Table 6 shows the ranking of the different
Table 6. 2017ASEAN
ASEAN countries
Rankingout ofon
the 190
Easeeconomies.
of Doing TheBusiness
Philippines
Factors in Doing ranked 99 with starting
ASEAN Countries a business
(Ranking as the
outmost difficult
of 190 to
economies)
Business deal
S withMin the country.
T Protecting
B V minorityI investors
P is C L
Ease of doing business not
2 very 22
much upheld
46 in the 72country,82followed
91by enforcing
99 131 139
Starting a business contracts.
6 112 Among78 the difficulties
84 that
121businessmen
151 have
171 to 180 160
Dealing with construction hurdle in13the country
10 42 are37 the procedures
24 in paying85
116 taxes 183 47
permit and getting credit.
Getting electricity 10 8 37 21 96 49 22 136 155
Registering property 19 40 68 134 59 118 112 120 65
3.1.2. SMEs in the Philippines

Table 6. 2017 ASEAN Ranking on Ease of Doing Business
Factors in Doing ASEAN Countries (Ranking out of 190 economies)

Business S M T B V I P C L
Ease of doing business 2 22 46 72 82 91 99 131 139
Starting a business 6 112 78 84 121 151 171 180 160
Dealing with construction 10 13 42 37 24 116 85 183 47
permit
Getting electricity 10 8 37 21 96 49 22 136 155
Registering property 19 40 68 134 59 118 112 120 65
Getting credit 20 20 82 62 32 62 118 7 75
Protecting minority 1 3 27 102 87 70 137 114 165
investors
Paying taxes 8 61 109 89 167 104 115 124 146
Trading across borders 41 60 56 142 93 108 95 102 120
Enforcing contracts 2 42 51 93 69 166 136 178 88
Resolving insolvency 29 46 23 57 125 76 56 72 169

Country Legend: S–Singapore, M–Malaysia, T–Thailand, B–Brunei Darussalam, V–Vietnam, I–Indonesia, P–Philippines,
C–Cambodia, L–Lao PDR
As of 2015, there are 900,914 registered business

establishments in the country dominated by MSMEs
(micro, small, and medium enterprises), 99.5% of Philippine
enterprises. Micro enterprises comprised 89.9% of all
business establishments. Small enterprises comprised 9.2%;
medium, 0.4%; and large, 0.5%. Majority of the Philippine
MSMEs are in wholesale and retail-equivalent to 46.5%
of all businesses. The distribution of MSMEs in different
industries is shown in Figure 9.
Of total employment in 2015, MSMEs generated 4,784,870

jobs as compared to 2,981,819 jobs created by large
enterprises. Among MSMEs, micro enterprises generated
the most number of jobs (2,285,634) relative to small
(1,968,452) and medium (530,784) enterprise created jobs
(refer to Figure 10).

Majority of the Philippine MSMEs are in wholesale and retail equivalent to 46.5% of
all businesses. The distribution of MSMEs in different industries is shown in Figure
9.
Accommodation
and Food Service
Industry, 13.3
Financial and
Others, 13.5 Insurance
Activities, 3.8
Information and
Communication,
3.9
Manufacturing,
12.7
Wholesale and
Of total employment in46.5
Retail, 2015, MSMEs generated 4,784,870 jobs as compared to l
enterprises providing 2,981,819 jobs. Among MSMEs, micro enterprises gener
the most number of jobs (2,285,634) compared to small (1,968,452) and med
Other Service
Activities, 6.3
(530,784) enterprise jobs. The distribution of jobs generated is shown in Figure
Source: Department of Trade & Industry Website, http://www.dti.gov.ph/businesses/msmes/msme-resources/msme-statistics
Figure 9. MSMEs Industry Distribution. Source: http://www.dti.gov.ph/businesses/msmes/msme-
resources/msme-statistics. Figure 9. MSMEs Industry Distribution
Micro
Large 30%
38%
Small
25%
Medium
7%
Figure 10. Jobs generated by Philippine enterprises. So
Figure 10. Jobs Generated by Philippine Enterprises
http://www.dti.gov.ph/businesses/msmes/msme-resources/msme-statistics.
The data on the number of jobs generated per business establishment are prov
in Table 7.
Table 7. Jobs Generated per Establishment
Business Category Jobs per Establishment
Micro 2.82
Small 23.75
Medium 147.3
Large 662
The data on the number of jobs generated per business

establishment are provided in Table 7.
As the country bids to move from a factor-driven economy to

an efficiency-driven economy, the role of MSMEs becomes
more critical in sustaining growth and supporting inclusive
growth. MSMEs’ job generation contributed to the decrease
in unemployment and reduction in poverty incidence.
With the government support in developing and growing
Philippine enterprises, the country is facing a new breed
of entrepreneurs who will require a more innovative and
supportive business environment.
The economic development plan of the Philippines for the

3.2. past 10 years has been focused on enterprise development
Entrepreneurship to support economic development and inclusive growth.
in the Philippines Policies, legislations, and government programs on the
local and national levels have been crafted to support
entrepreneurship. The status of Philippine entrepreneurship
described by entrepreneurial perception, motivation, and
aspiration is determined through the APS. Two thousand
respondents aged 18–64 were surveyed representing all
regions in the country. The survey was conducted using face-
to-face interviews. The demographics of the respondents are

The 2015 APS revealed a continuous high societal
perception of entrepreneurship and strong motivation
of the population to become entrepreneurs given the
Filipinos’ perceived opportunities in their environment,
entrepreneurial capabilities, and fear of failure.
Table 8. Demographics of 2015 Philippine APS Respondents
Gender Male 50.1%

Female 49.9%
Age (years) 18–24 23.4%
25–34 29%
35–44 21.8
45–54 16.2
55–64 9.65
Average household size 4.77
Annual income Below PhP 60,000 49.9%
PhP 60,000 to less than 120,000 26.7%
PhP 120,000 to less than 240,000 11.4%
PhP 240,000 to 600,000 4.2%
PhP 600,000 to 2 million 1.9%
Refused to answer 6.6%
Education Secondary/high school 54.3%
Postsecondary/vocational 11.4%
College 17.4%
Postgraduate 1.2%
The 2015 APS revealed a continuous high societal perception

of entrepreneurship and strong motivation of the population
to become entrepreneurs given the Filipinos’ perceived
opportunities in their environment, entrepreneurial
capabilities, and fear of failure. The country believes that
employment generation can be better supported with the
establishment of more businesses that can lead to poverty
reduction. However, the 2015 APS showed that Filipinos do
not aspire to create jobs when starting a business. Although
there is a high perceived capability to start a business and

However, the 2015 APS showed that Filipinos do
not aspire to create jobs when starting a business.
low fear of failure among Filipinos, the business failure rate

is high, resulting into a very low number of established
businesses.
There is high gender equity in the country with more females

engaged in early-stage entrepreneurial activity than males.
Filipinos are motivated 60% more by the opportunity to earn
more than the necessity of earning an income. Entrepreneurs
in the Philippines do not see entrepreneurial growth
through more job creation with only 10.2% expecting to
generate more than five jobs in the next five years making
the Philippines ranked 45th in the category among the 65
economies surveyed. Most new businesses in the country
(82.4%) are engaged in wholesale and retail and only 2%
are into manufacturing. Details of the findings on the state
of entrepreneurship in the Philippines for 2015–2016 are
Filipinos are motivated 60% more by the opportunity to

earn more than the necessity of earning an income.
Table 9. 2015 Determinants of Philippine Entrepreneurship
Self-Perception about Entrepreneurship

Value (% of Respondents) Rank/65
Perceived opportunities 53.8 12
Perceived capabilities 69.0 8
Fear of failure 36.5 31
Entrepreneurial intentions 37.1 9
TEA 17.2 16
EB Ownership Rate 7.3 26
EEA 2.3 29
Business discontinuance rate 12.2 3
Continued in the next page......

continuation of Table 9...
Self-Perception about Entrepreneurship
Motivational Index
Improvement-driven opportunity/necessity motive 1.6 38
Gender Equity
Female–male TEA ratio 1.3 1
Female–male opportunity ratio 0.9 24
Entrepreneurship Impact
Job expectations (5+) 10.2 46
Innovation 5.5 7
Industry (% in business service sector) 2.7 57
Industry Distribution of TEA
Industry % of TEA
Agriculture 8.9
Mining 0.1
Manufacturing 2.0
Wholesale and retail 82.4
Information technology and communication 1.2
Finance 0.9
Administrative services 0.6
Source: 2015 Philippine APS
3.2.1. Entrepreneurial Perception, Motivation,

and Aspiration
Among the respondents of all the countries in Southeast

Asia, the Philippine respondents registered on the average
the strongest entrepreneurial intentions and perceived
capabilities and opportunities. As can be seen in Table 9,
the Philippines ranked 8th on perceived capabilities among
65 countries that participated in the 2015 APS and 9th on
entrepreneurial intentions. This points to a very strong desire
to be an entrepreneur based on the belief that Filipinos have
what it takes to be one.
Comparing the APS results from 2006 to 2015, the intent to

start a business among Filipinos revealed a declining trend
over the 10-year period. This is supported by an increasing

a higher level of perceived opportunities from 46% of the population in 2014 to
53.8% in 2015.
80.00
70.00
60.00
50.00
40.00 Perceived Capabilities
30.00
Perceived Opportunities
20.00
10.00 Fear of Failure Rate
0.00 Entrepreneurial Intention
2006 2013 2014 2015
Perceived Capabilities 72.48 68.40 66.15 68.99
Perceived Opportunities 58.05 47.94 45.89 53.77
Fear of Failure Rate 35.22 36.19 37.68 36.45
Entrepreneurial Intention 48.40 44.12 42.84 37.11
Figure 11. Entrepreneurial perception of Filipinos. Source: GEM APS Key Indicators 2001–2015.
Source: GEM APS Key Indicators 2001–2015
Philippine society has a high

Figure 11.regard for entrepreneurs
Entrepreneurial Perceptionasofcan be seen in Figure 12.
Filipinos
Entrepreneurship is now highly considered by 75% of the population as a good
career choice. The media attention being given to successful entrepreneurs and the
different government programsfear supporting entrepreneurship
of failure. As the country’sineconomy
the country
improves and
contribute to the high societal perception on entrepreneurship. On another note,
more job opportunities are present, the risk of putting up
these perceptions are slowly declining over the 10-year period except for the media
a business seems to be higher as compared to the security
attention being given to entrepreneurship.
of having a fixed salaried work. On the other hand, there is
a higher level of perceived opportunities from 46% of the
population in 2014 to 53.8% in 2015 (refer to Figure 11).
Philippine society has a high regard for entrepreneurs as

can be seen in Figure 12. Entrepreneurship is now highly
considered by 75% of the population as a good career
choice. The media attention being given to successful
entrepreneurs and the different government programs
supporting entrepreneurship in the country contribute to the
high societal perception on entrepreneurship. On another
note, these perceptions are slowly declining over the 10-
year period except for the media attention being given to
entrepreneurship.

100.00
90.00
80.00
70.00
60.00 Know Startup
50.00 Entrepreneur Rate
40.00 Entrepreneurship as
Desirable Career Choice
30.00
High Status Successful
20.00
Entrepreneurship
10.00
Media Attention for
0.00 Entrepreneurship
2006 2013 2014 2015
Know Startup Entrepreneur Rate 51.07 41.05 33.34 46.16
Entrepreneurship as Desirable Career
82.64 84.86 81.80 74.63
Choice
High Status Successful Entrepreneurship 83.70 79.27 78.13 76.15
Media Attention for Entrepreneurship 77.68 86.79 84.70 81.46
Figure 12. Societal perception on entrepreneurship. Source: GEM APS Key Indicators 2001–2015.
Source: GEM APS Key Indicators 2001–2015
Figure 12. Societal Perception on Entrepreneurship

3.2.2. Philippine Entrepreneurial Activity
The self- and societal perception 3.2.2. Philippine Entrepreneurial Activity

on entrepreneurship is translated into
entrepreneurial activity. There are four phases of entrepreneurial activity in the
GEM framework, which will be used The in understanding
self- the entrepreneurship
and societal perceptions activity
on entrepreneurship is
in the Philippines. These are nascent
translated into entrepreneurial activity. There are four phases3
entrepreneurship (startup business, less than
months in existence), new business entrepreneurship
of entrepreneurial activity(starting
in the GEM a framework
business, which
less than
will
3.5 years in existence), total early entrepreneurship (nascent and new business),
be used in understanding the entrepreneurship activity in
and EB (more than 3.5 years in existence). In 2015, the TEA rate among the
population surveyed was 17.16%, the and
Philippines. These are nascent
the Philippines ranked entrepreneurship
16th among(startup
all 65
economies surveyed. EB ownership business,rate
less than
was 3 7.25%.
months inAlthough
existence),69%new business
of the
entrepreneurship
population said they have the entrepreneurial (starting ato
capability business, less than 3.5 years
be an entrepreneur, in
only
37% have entrepreneurial intentions. This
existence), is early
total translated into around
entrepreneurship 40%and
(nascent of new
the
respondents either starting a business or an
business), andEB. However,
established startup(more
business entrepreneurship
than 3.5 years
activity is declining over the 10-year period of study as can be seen
in existence). In 2015, the TEA rate among the in population
Figure 12
surveyed was 17.16%, and the Philippines ranked 16th
among all 65 economies surveyed. EB ownership rate was
7.25%. Although 69% of the population said they have
the entrepreneurial capability to be an entrepreneur, only
37% have entrepreneurial intentions. Hence, around 40%

25.00
20.00
15.00 Nascent Entrepreneurship Rate
10.00 New Business Ownership Rate
5.00 Total early-stage Entrepreneurial

Activity (TEA)
0.00
2006 2013 2014 2015 Established Business Ownership
Nascent Entrepreneurship Rate 4.93 12.00 8.16 7.61 Rate
New Business Ownership Rate 15.62 6.73 10.52 10.07 Discontinuance Rate
Total early-stage Entrepreneurial Activity
20.39 18.52 18.38 17.16
(TEA)
Established Business Ownership Rate 19.72 6.61 6.16 7.25
Discontinuance Rate 8.50 12.30 9.20 12.10
Figure
Source: GEM13.
APSPhilippine entrepreneurial
Key Indicators 2001–2015 activity. Source: GEM APS Key Indicators 2001–2015.
Business closure as measured by discontinuance rate is mainly due to the business

Figure 13. Philippine Entrepreneurial Activity
being unprofitable, difficulty in getting financing to fund operations of the business,
and personal reasons like death in the family, poor health, or sickness of the
of the respondents
entrepreneur. Filipino entrepreneurs are either starting afor
sourced investment/capital business or an EB.
the business
from family (77.6%), friends However,
(38.4%),startup
banksentrepreneurship
and financial activity is declining
institutions over
(5.9%),
private investors/venture the 10-year
capitalists
period of(10.3%), andbe seen
the study as can government
in Figure 13
programs/donations/grants (5.9%).while there is an increasing trend on EB. This trend can be
explained by
3.2.3. Entrepreneurship Motivation theAspiration
and country’s decreasing unemployment rate
and GDP improvement.
Filipinos are mainly motivated to be an entrepreneur by opportunity to earn more
(41.55%) rather than necessity (25.64%) as shown in Figure 14. These
Business closure as measured by discontinuance rate is mainly
opportunities are greater financial independence, higher financial income, and
maintaining current earnings. due to the business
In 2006, 45% of being unprofitable,
Filipinos difficulty in to
were encouraged getting
be
entrepreneurs due to necessity financing to fund operations
as compared to onlyof25.64%
the business, and personal
in 2015. The
entrepreneurial motivation for reasons
opportunity to earn
like death more
in the has been
family, increasing
poor health, since
or sickness
2013 from 38% to 41.55% in 2015.
of the entrepreneur. As a result of the high discontinuance
rate in the
There is also increasing expectation Philippines,
of growth serial entrepreneurship
of business in terms of more tendencies
jobs
are prevalent among Filipinos. Serial entreprenuership,
generated, a bigger market that can be tapped, and offering innovative products and
services. Data on these aspirations
whichare given
refers in tendency
to the Figure 15. of Growth expectation
entrepreneurs who beginfor a
new venture after a prior business, (Nielsen, & Sarasvathy,
2011), those who have experienced setting up more than one
business, (Eggers, & Song 2013), or numerous individuals
who terminate their own businesses and start again. More
than 70% of TEA in the Philippines have intentions of

starting a new business in the next three years despite
quitting their business in the last 12 months.
Filipino entrepreneurs sourced investment/capital for the business from
family (77.6%), friends (38.4%), banks and financial institutions (5.9%),
private investors/venture capitalists (10.3%), and government programs/
donations/grants (5.9%).
Filipino entrepreneurs sourced investment/capital for the

business from family (77.6%), friends (38.4%), banks and
financial institutions (5.9%), private investors/venture
capitalists (10.3%), and government programs/donations/
grants (5.9%).
3.2.3. Entrepreneurship Motivation and Aspiration
Filipinos are mainly motivated to be an entrepreneur by the

opportunity to earn more (41.55%) rather than necessity
(25.64%) as shown in Figure 14. These opportunities can
provide them greater financial independence and higher
financial income. In 2006, 45% of Filipinos were encouraged
to be entrepreneurs due to necessity as compared to
only 25.64% in 2015. The entrepreneurial motivation for
opportunity to earn more has been increasing since 2013,
from 38% to 41.55% in 2015.
The entrepreneurial motivation for opportunity to

earn more has been increasing since 2013, from
38% to 41.55% in 2015.
There is also increasing expectation of business growth in
terms of more jobs generated, a bigger market that can be
tapped, and offering innovative products and services. Data
on these aspirations are presented in Figure 15. Growth
expectation for TEA in terms of providing at least five
jobs for the next five years has increased from 8.42% in
2006 relative to 13.46% in 2015. There is also a better TEA
outlook in terms of product innovation where 53.59% of

expectation on tapping into the international market: 6.7% in 2015 versus 2.5% in
2006. This positive expectation is supported by the increasing trend in the informal
investors’ rate shown in Figure 16. Informal investors are friends, family, or other
network that invest in the business.
100.00
90.00
80.00
70.00
60.00 Improvement-Driven
50.00 Opportunity
40.00 Entrepreneurial Activity:
Relative Prevalence
30.00
20.00 Necessity-Driven
10.00 Entrepreneurial Activity:
0.00 Relative Prevalence
2006 2013 2014 2015
Improvement-Driven Opportunity
Entrepreneurial Activity: Relative 42.11 38.03 33.49 41.55
Prevalence
Necessity-Driven Entrepreneurial
45.72 43.59 29.36 25.64
Activity: Relative Prevalence
Figure
Source: 14.APS
GEM Entrepreneurial motivation. Source: GEM APS Key Indicators 2001–2015.
Key Indicators 2001–2015
Figure 14. Entrepreneurial Motivation
80.00
70.00
60.00
50.00 International Orientation

early-stage
40.00
30.00 New Product early-stage

20.00
10.00 Growth Expectation early-

stage Entrepreneurial
0.00 Activity: Relative
2006 2013 2014 2015
International Orientation early-stage Prevalence
2.50 11.28 0.40 6.87
New Product early-stage
27.74 55.10 60.97 53.59
Growth Expectation early-stage
Entrepreneurial Activity: Relative 8.42 6.26 7.34 13.46
Prevalence
Figure
Source: GEM15.
APSEntrepreneurial aspiration. Source: GEM APS Key Indicators 2001–2015.
Figure 15. Entrepreneurial Aspiration
5.00
4.50 Entrepreneurship in the Philippines| 35
4.00
3.50
Prevalence
Figure 15. Entrepreneurial aspiration. Source: GEM APS Key Indicators 2001–2015.
5.00
4.50
4.00
3.50
3.00
2.50 Informal Investors
2.00 Rate
1.50
1.00
0.50
0.00
2006 2013 2014 2015
Informal Investors Rate 1.14 1.66 4.51 4.48
Source: GEMFigure
APS Key16. Informal
Indicators investors’ rate. Source: GEM APS Key Indicators 2001–2015.
2001–2015
3.2.4. Gender in Entrepreneurship

Figure 16. Informal Investors’ Rate
The Philippines registered a very high gender equity measured as the ratio of TEA
activity for the female working population to TEA activity of the male population. As
TEA indicated that their product is new to their customers
in 2015 compared to 27.74% in 2006. There is also a higher
expectation on tapping into the international market: 6.7%
in 2015 versus 2.5% in 2006. This positive expectation is
supported by the increasing trend in the informal investors’
rate shown in Figure 16. Informal investors are friends,
family, or other network that invest in the business.
3.2.4. Gender in Entrepreneurship
The Philippines registered a very high gender equity,

which is measured as the ratio of the TEA activity for the
female working population to the TEA activity of the male
population. As can be seen in Figure 17, there are more
The Philippines registered a very high gender equity, which

is measured as the ratio of TEA activity for the female
working population to TEA activity of the male population.

TEA as compared to males since 2006. In 2015, the Philippines ranked first among
all 65 countries that participated in the GEM survey. The gender gap is increasing
during the 10-year period as more females are starting a business than males.
25.00
Total early-stage
20.00 Entrepreneurial
Activity for Male
15.00 Working Age
Population
10.00
Total early-stage
5.00 Entrepreneurial
Activity for Female
0.00 Working Age
2006 2013 2014 2015 Population
Total early-stage Entrepreneurial
Activity for Male Working Age 18.31 19.06 15.85 14.85 Gender Equity
Population
Total early-stage Entrepreneurial
Activity for Female Working Age 22.45 17.99 20.78 19.47
Population
Gender Equity 1.23 0.94 1.31 1.31
Figure
Source: 17.
GEM Male/female
APS population and TEA activity. Source: GEM APS Key Indicators 2001–2015.
Figure 17. Male/Female Population and TEA Activity
3.3. Philippine Entrepreneurship Ecosystem

females starting a business or engaging in TEA as compared
to males since 2006. In 2015, the Philippines ranked first
among
The environment that Filipino all 65 countriesthrive
entrepreneurs that participated in the GEM
in is described survey.
in the GEM
framework through the EFCs.TheThe EFCsequity
gender are assessed
continued to through
increasethe
overNES. In the 2015
the 10-year
NES, 38 experts composed ofperiod
entrepreneurs, policy
as more females start makers,
businessesindustry practitioners,
relative to males.
and civic organization leaders were asked to complete the survey. The definitions of
the EFCs are summarized in Table
3.3. 10. The result
The environment of the
in which 2015
Filipino NES is shown
entrepreneurs thrivein Figure
18. in is described in the GEM framework through the EFCs.
Philippine
The EFCs are assessed through the NES. In the 2015 NES,
Entrepreneurship Table 10. Definitions
38 experts composed of of EFCs
entrepreneurs, policy makers,
Ecosystem EFC
Financing for entrepreneurs industry practitioners,
Definition
and civic organization
The availability leaders were and
of financial resources—equity
asked to complete debt—for
the survey. Theand
small definitions of the EFCs
medium enterprises (SMEs)
(including grants and subsidies)
are summarized in Table 10. The result of the 2015 NES is
Government support and policies The extent to which public policies support
shown in Figure 18.entrepreneurship—entrepreneurship as a relevant
economic issue
Taxes and bureaucracy The extent to which public policies support
entrepreneurship—taxes or regulations are either
size-neutral or encourage new and SMEs
Government programs The presence and quality of programs directly
assisting SMEs at all levels of government (national,

Table 10. Definitions of EFCs
EFC Definition
Financing for entrepreneurs The availability of financial resources—equity and debt—for small
and medium enterprises (SMEs) (including grants and subsidies)
Government support and policies The extent to which public policies support entrepreneurship—
entrepreneurship as a relevant economic issue
Taxes and bureaucracy The extent to which public policies support entrepreneurship—taxes
or regulations are either size-neutral or encourage new and SMEs
Government programs The presence and quality of programs directly assisting SMEs at all
levels of government (national, regional, municipal)
Basic school entrepreneurial education and training The extent to which training in creating or managing SMEs is
incorporated within the education and training system at primary
and secondary levels
Postschool entrepreneurial education and training The extent to which training in creating or managing SMEs is
incorporated within the education and training system in higher
education such as vocational, college, business schools, etc.
R & D transfer The extent to which national research and development will lead to
new commercial opportunities and is available to SMEs
Commercial and professional infrastructure The presence of property rights, commercial, accounting, and
other legal and assessment services and institutions that support or
promote SMEs
Internal market dynamics The level of change in markets from year to year
Physical and services infrastructure Ease of access to physical resources—communication, utilities,
transportation, land, or space—at a price that does not discriminate
against SMEs
Cultural and social norms The extent to which social and cultural norms encourage or allow
actions leading to new business methods or activities that can
potentially increase personal wealth and income
Source: 2015 GEM NES Questionnaire
Post school entrepreneurial education topped the environ-

mental factors that support entrepreneurship in the country
followed by internal market dynamics, cultural and social
norms, and physical and services infrastructure. On the
other hand, taxes and bureaucracy, government programs,
and government support and policies burden and constrain
Philippine entrepreneurial undertaking.
Post school entrepreneurial education topped the

environmental factors that support entrepreneurship in the
country followed by internal market dynamics, cultural and
social norms, and physical and services infrastructure.

Financing for
entrepreneurs
7 Governmental
Cultural and social 5.09
5.71 6 support and
norms
5 policies
Physical and 3.85
4 Taxes and
services 5.47
3 bureaucracy
infrastructure
2 2.87
1
Internal market Governmental
4.13 0 3.58 2015
openness programs
Basic-school
Internal market 4.99Entrepreneurial
dynamics 6.12
Education and…
Commercial and 4.06 Post-school
5.2
professional entrepreneurial
6.3
infrastructure education and…
R&D Transfer
FigureGEM
Source: 18.NES
2015
Key Philippine EFCs. Source: GEM NES Key Indicators 2007–2015.
Indicators 2007–2015
Figure
The large population of the 18. 2015
country supports theEFCs
Philippine domestic market that is up to date
on different products and services available globally. This is an outcome of the
Entrepreneurial
movement of Filipinos to different countrieseducation in higher
for work, education
bringing is mandated
into the country
by lawThe
innovative products and services. and offered as a bachelor’s
country’s populationdegree
isand master’s
very activedegree.
in social
media and use of internet exposing
There arethem to global and
also government trends. Theundertakings
private positive societal
to
perception on entrepreneurship from the of findings
support development of APS through
youth entrepreneurship supports the the
entrepreneurial intentions ofdifferent
the population. There programs
business incubator is also affordable access to
that offer trainings
resources in the country open in
toopportunity
all levels and types of business.
identification, business plan development,
and elevator pitch to attract venture capitalists and angel
On the other hand, government policies and bureaucracy stunt the development and
investors.
growth of businesses in the country. Although there are numerous laws that support
entrepreneurship in the country, there is limited information dissemination that is
being done. There is also The large population
inconsistent and ofinefficient
the country supports
way oftheimplementing
domestic
regulations and policies on SMEs.
marketLaws
that is have been
up to date on crafted
different to encourage
products startups.
and services
However, these laws do not support
availablethe growth
globally. Thisand expansion
is an outcome ofofthestartups.
movementBusiness
of
operations become more burdensome as they grow due to the more restrictive
Filipinos to different countries for work, bringing into the
regulations on large enterprises. It isinnovative
country also moreproducts
difficult toservices.
and conductThe business in the
country’s
Philippines because of taxes levied by the government and bureaucracy in
population is very active in social media and the use of
implementing policies and procedures in running a business.
internet, thus, exposing them to global trends. The positive

societal perception on entrepreneurship, given the findings
of APS, supports the entrepreneurial intentions of the
population. There is also affordable access to resources in
the country which is open to all levels and types of business.
The country’s population is very active in social

media and the use of internet exposing them to
global trends.
On the other hand, government policies and bureaucracy

stunt the development and growth of businesses in
the country. Although there are numerous laws that
support entrepreneurship in the Philippines information
dissemination is limited. Likewise, regulations and policies
on SMEs are inconsistently and inefficiently implemented.
Laws have been crafted to encourage startups. However,
these laws do not support the growth and expansion of
startups. Business operations become more burdensome as
they grow due to the more restrictive regulations on large
enterprises. It is also more difficult to conduct business in
the Philippines because of taxes levied by the government
and bureaucracy in implementing policies and procedures
in running a business.
...government policies and bureaucracy stunt

the development and growth of businesses in the
country.
Over the last three years, Philippine EFCs have registered
considerable improvement as can be seen in Figure 19.
Improvements in education, internal market dynamics,
commercial and professional infrastructure, and social and
cultural norms are observed. The highest improvement
was registered with the post school entrepreneurial
education. This can be attributed to the incorporation of
entrepreneurship courses in nonbusiness degrees like science
and engineering programs.

Business operations become more burdensome as they
grow due to the more restrictive regulations on large
enterprises.
Financing for
entrepreneurs
Cultural and social 7.00 Governmental
norms 6.00 support and policies
5.00
Physical and
4.00 Taxes and
services
3.00 bureaucracy
infrastructure
2.00
2013
1.00
Internal market Governmental
0.00 2014
openness programs
2015
Basic-school
Internal market
Entrepreneurial
dynamics
Education and…
Commercial and Post-school
professional entrepreneurial
infrastructure education and…
R&D Transfer
Figure
Source: GEM19.
NES3-year comparative
Key Indicators 2007–2015 Philippine EFCs. Source: GEM NES Key Indicators 2007–2015.
Over the last Figure

three19.years,
3-year Comparative
Philippine Philippine
EFCsEFCs have registered considerable
improvement as can be seen in Figure 19. Improvement in education, interna
market dynamics, commercial and hand,
On the other professional infrastructure,
factors directly related to governmentand social and
cultural norms are observed. The highest
have remained improvement
considerably the same overwas registered
the last 3 years. with the
postschool entrepreneurialAlthough
education.
there This can be attributed
are numerous to the
laws and policies thatincorporation
are o
entrepreneurship coursesaimed
in nonbusiness degrees like
to support entrepreneurship science
in the country,and the engineering
programs. population is not well-informed regarding these policies.
There is also inconsistent implementation of these policies
On the other hand, factors directly
among local related
government units.to government have remained
considerably the same over the last 3 years. Although there are numerous laws and
policies that are aimed to support entrepreneurship in the country, the population i
Although there are numerous laws and policies that are
not well-informed regarding these policies. There is also inconsisten
aimed to support entrepreneurship in the country, the
implementation of these policies among local government units.
population is not well-informed regarding these policies.
There is also inconsistent implementation of these policies
among local government units.
Part 4. Conclusion and Policy Recommendations

The country’s economic performance has been improving in the last 10 years in
terms of GDP growth, reduction in unemployment rate, and decreasing poverty
PART 4
Conclusion
and Policy
Recommendations
Conclusion and Recommendations| 43

The country’s economic performance has been improving
in the last 10 years in terms of GDP growth, reduction in
unemployment rate, and decreasing poverty incidence.
Data for entrepreneurship in the Philippines showed
decreasing startup activities (TEA) as more jobs are provided
in the economy. There is also an increasing trend in the
formation of established business since 2006. The country’s
development plan for the next 5 years has outlined a vision
where
With smarter and more innovative people, the country in

2040 is also envisioned to be a major player in the global
knowledge economy, producing innovative products and
processes that are used to make high quality goods and
services at competitive prices. (PDP 2017–2022)
Given the current state of entrepreneurship where there is

a low level of global activities and number of enterprises
engaged in manufacturing and production of innovative
products and services, the country has to rethink its policy
in promoting entrepreneurial undertaking to support the
attainment of the 2040 vision. GEM findings can be used
as bases for redundant policy recommendations in order
for entrepreneurship to become a vehicle for attaining the
country’s vision of a prosperous, predominantly middle-class
society where: no one is poor; there is a long and healthy
life of population; there are smarter and innovative people;
and there is a high-trust society. For the country to achieve
this vision, it has to have businesses that are established and
globally competitive. Thus, policy recommendations should
consider the strategic goals set by ASEAN and UNCTAD
on entrepreneurship policy priorities, namely, a) formulate
national entrepreneurship strategy; b) promote productivity,
technology, and innovation; c) improve access to finance; d)
enhance market access and internationalization; e) improve
policy and regulatory environment; and f) promote the

development of entrepreneurial skills through education
and capability building.
The following are some policy recommendations to support

the country’s strategic goals on SME development.
yy Identification of industry priority areas where the

country can be more competitive globally. Nine
priority industries are identified in the PDP 2017–
2022. Although these industries are important to the
attainment of the development goals of the country,
the priority areas should be further narrowed down
in order to have better focus and allocation of
resources. There should be a thorough study on these
nine industries and limitations should be imposed
on the priority areas to sectors that will create more
impact on the creation of more value-added and
innovative products and services where the country
can gain better competitive advantage.
yy Evaluation of the regulatory environment for startup

businesses and ease of doing business. The Philippines
is not a choice investment destination for both
foreign and domestic investors due to the difficulty
of doing business in the country. The burden of
doing business in the country is brought about
by national policies and regulations that are often
in conflict with or are duplicates of those that are
implemented by government agencies. There is also
confusion in the implementation of regulations
due to the different operational definitions used by
government agencies. There should be a regulatory
reform program that would focus on the industry
priority areas to improve the ease of doing business
in the country. The country can benchmark with

the regulatory reforms conducted in countries like
Japan and South Korea.
yy Develop the innovation capabilities of the business

sector. Innovation should be promoted in the
design and production of goods and the delivery of
services. To be able to do this, the country should
create a support environment that encourages
better innovation of products and services. There
should be more active collaboration between the
Department of Science and Technology (DOST)
and the Department of Trade and Industry (DTI)
to enhance the innovative capability of SMEs.
There should be more emphasis given on research
and development, building and managing business
incubators, accelerators and coaching spaces that
can help start-up businesses to be established and
sustainable.
yy Introduce entrepreneurship and its different forms

in all levels of education. The present reform that
extended basic education to 12 years is a very good
avenue to introduce entrepreneurship in the formal
education setting. Although entrepreneurship is a
required track in Grades 11 and 12, entrepreneurship
should be introduced in all its form, that is, self-
employment, business venture, corporate or employee
entrepreneurship, and social entrepreneurship. This
can be further enhanced by emphasizing for the
other tracks that employment is not the only career
option. The science and technology track or STEM
can encourage technical people to be self-employed,
for example, offering technical services for firms or
the arts and humanities track by joining the creative
industries like music, film, and the arts. Providing
professional services should also be encouraged.

yy Create new ways of accessing financing through
equity. Access to finance is more often associated
with borrowing from formal institutions. Small and
medium enterprises find it difficult to go through
these formal channels due to their inability to meet
the requirements of collateral and documentation
procedures required by these institutions. This
difficulty gave way to the opportunity of informal
lenders and microfinancing institution to provide
financing, which is usually associated with very high
interest rate. On the other hand, equity financing is
not easily available. Venture capital, crowdfunding,
and social stock exchange can be further developed
and institutionalized in the country. Formal
programs should be developed to channel funds into
these investment opportunities.
yy Promote export capacity and ability to integrate in the

global supply chain. The capability to export is usually
tied to two factors: the quality and price of the
product or service that will be globally competitive
and the cost and facility to move the product beyond
the country’s borders. The government should give
priority to businesses that will export products that
will meet the global quality requirements. This can
be done by providing small businesses the facility
for research and development and quality control
from the different government agencies. There
should be active collaboration between the SMEs
and the government agencies to improve products
and services. The country should also fast track the
implementation of the one window business facility
to facilitate imports and exports, which would make
it easy to do business globally.

yy Enhance human capital development for women and
the youth on entrepreneurship. Gender equality in the
country is the highest among all the countries that
participated in the 2015 GEM research. The country
also has also one of the highest youth participation
in entrepreneurship. There should be programs in
the educational sector to enhance the capabilities of
women and the youth to be entrepreneurs. Formal
courses on product and service development, where
women have better acumen than men, should be
offered to equip women with skills that can be
used in the production of products or delivery of
services. Vocational courses should be revived to
give women and the youth skills that they can use
in whatever form of entrepreneurship they would
like to enter. Dressmaking, culinary arts, fashion
design, hair and make-up science, welding, painting,
and plumbing—to name a few—should be offered as
formal programs in vocational schools. Vocational
schools should again be encouraged to better train
women and the youth to have very specific skills that
they can use to be self-employed.
Results of the 2015 GEM survey and the 10-year

entrepreneurship analysis should be further studied to
help the country in setting specific actionable plans on the
above recommendations. More research should be done
to analyze the data gathered to better understand Filipino
entrepreneurs. Longitudinal analysis on the entrepreneurial
motivation, activities, and aspiration of Filipinos with the
different interventions (government and private entities)
used to promote entrepreneurship should be conducted to
better understand what works and what specific regulations
should be enhanced or changed.

References
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2015 Philippine National
Team Members
DR. AIDA LICAROS-VELASCO is Distinguished Professor

at De La Salle University, Manila where she was also the former
Dean of the College of Engineering and the former Director of
the Ramon V. del Rosario College of Business Center for Business
Research and Development. She earned her Bachelor of Science
in Engineering minor in Chemical Engineering, Master of
Business Administration, and Doctor of Business Administration
at the same University, and completed her post-doctoral studies
on Technology and Innovation Management at the University
of Sussex, England. She was a Researcher Exchange at Chiba
University, Japan in 1988.
She is the Leader of the Philippine National Team for the
Global Entrepreneurship Monitor project funded by the
International Development Research Centre, the Ambassador
Francisco V. del Rosario Professorial Chair in Entrepreneurship,
the lead consultant for the project on Modernizing Government
Regulations in the Philippine Logistics Industry, and an active
member of the Association of ASEAN Japan Entrepreneurship
Educators (AAJEE). She serves in the editorial boards of the
Asian Journal of Innovation and Technology, Philippine Journal
of Innovation and Entrepreneurship, and the DLSU Business and
Economics Review. Her current research interests are in innovation
for inclusive growth, city innovations, entrepreneurship, supply
chain management, and technology and innovation management.

BRIAN C. GOZUN is Dean of the Ramon V. del Rosario
College of Business, De La Salle University, Manila. He was
researcher and consultant on the fields of immigration,
regional development, health, and education for the Asian
Development Bank Institute in Tokyo and the World
Bank Office Manila. His current research interests are in
entrepreneurship, innovation, and big data.
PAULYNNE J. CASTILLO is a faculty of the Department

of Economics of the School of Economics at De La Salle
University, Manila. She earned her Bachelor of Science
in Economics at the University of the Philippines and
her Master of Arts in Economics at California State
University, Long Beach. Her current research interests are in
international trade, foreign direct investments, and income
distribution and poverty. She has written a number of papers
that reviewed the economic, political, and social factors that
influence the development of industries in the Philippines.
MITZIE IRENE P. CONCHADA is Vice Dean of the

School of Economics and Vice Chair of the Department of
Economics at De La Salle University, Manila. She earned
her Bachelor of Arts major in Economics, Bachelor of
Secondary Education major in History, and Master of
Science in Economics at the same University, and her
Doctor of Philosophy in Economics at Ateneo de Manila
University. She was an economic analyst and consultant
for the Asian Development Bank, Philippine Institute for
Development Studies, Commission on Higher Education,
and other think tank institutions. Her current research
interests are in economics of poverty, impact evaluation,
experimental economics, economic integration, and
economic development.

GERARDO L. LARGOZA is Associate Professor and the
former Chair of the School of Economics at De La Salle
University, Manila. His work is in experimental economics
and impact evaluation.
DR. JUNETTE A. PEREZ is a faculty of the Department

of Financial Management of the Ramon V. del Rosario
College of Business at De La Salle University, Manila
and is a Certified Public Accountant. She earned her
Master in Business Management at the Asian Institute of
Management and her Doctor of Business Administration
(with Distinction) at De La Salle University, Manila. Her
research interests are in microfinance, financial ethics, and
financing among women and youth entrepreneurships. She
is passionate for conducting financial literacy among out-
of-school youth.
DR. EMILINA D. SARREAL is Chair of the Decision

Sciences and Innovation Department and Vice Dean of
the Research and Graduate Studies of the Ramon V. del
Rosario College of Business at De La Salle University, Manila.
She earned her Doctor of Business Administration at the
same University. She has written and published articles
and book chapters for DLSU Business and Economics
and Promoting Philippine Enterprise Development (ed.
Andrea L. Santiago). Her pedagogy is focused on business
research methods, advanced operations management with
management science modelling, and advanced research
methods.
About the Authors| 55

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Complete 2015 Entrepreneurship 062017-Min PDF

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Philippine

Aida Licaros Velasco

Copyright © 2017 by De La Salle University

ALL RIGHTS RESERVED.

Published and distributed by

The De La Salle University Publishing House is the publications office

Cover Design: John David Roasa

List of Tables and Figures v

Part 2. The Philippines and GEM 2015 Global Report 11

Part 3. Entrepreneurship in the Philippines 19

3.3. Philippine Entrepreneurship Ecosystem 37

Part 4. Conclusion and Policy Recommendations

2015 Philippine National Team Members 53

Table 1. Economies Participating in the 2015 GEM Survey 4

Figure 1. GEM model of the entrepreneurship process 6

The 2015 Philippine GEM National Team members would like to

yy The International Development Research Centre of Canada

yy The Angelo King Institute of De La Salle University for giving

yy The Office of the Vice Chancellor for Research and Innovation,

yy The following for the guidance and assistance to the team

The 2015-2016 Philippine Entrepreneurship Report is a very

For entrepreneurship to thrive, a supportive ecosystem must be

I would like to congratulate Dr. Aida L. Velasco and her team in

Bro. Raymundo Suplido, FSC

Raymond Girard Tan

De La Salle University-Angelo King Institute for Economic and

Tereso S. Tullao, Jr., PhD

The results of the 2015 Philippine APS (Adult Population Survey)

There is also a very high gender equity where the Philippines

The trend in entrepreneurship motivation, activity, and aspirations

Improvement in the economy dampens to some extent the interest

To support the development of small and medium enterprises,

• identification of industry priority areas where the country

GEM uses two surveys as its primary research instrument: the

There were 65 economies that participated in the 2015–2016

The Global Entrepreneurship Monitor (GEM) Model | 3

Table 1. Economies Participating in the 2015 GEM Survey

Region Factor Driven Efficiency Driven Innovation Driven

4 | Philippine Entrepreneurship Report 2015–2016

Region Factor Driven Efficiency Driven Innovation Driven

1.2 GEM defines entrepreneurship as “any attempt at new business

A potential entrepreneur in the preconception stage is one who

The Global Entrepreneurship Monitor (GEM) Model | 5

Source: 2015 GEM Global Report, p. 13

GEM framework, this period of 42 months makes up

As illustrated in Figure 2, entrepreneurial activity is

6 | Philippine Entrepreneurship Report 2015–2016

Source: 2015 GEM Global Report, p. 12

Figure 2. GEM Conceptual Framework

EFCs include entrepreneurial finance, government policy,

Figure 2 also provides the measures of the variables that

The Global Entrepreneurship Monitor (GEM) Model | 7

Data on entrepreneurial aspirations, attitudes, and activity

To measure entrepreneurial attitudes, GEM surveys the

Environmental factors are referred to as entrepreneurship

8 | Philippine Entrepreneurship Report 2015–2016

Table 2. GEM Indicators

The Global Entrepreneurship Monitor (GEM) Model | 9

Figure 3. Societal Perception on Entrepreneurship

In the self-perception phase, the Philippines registered the highest perceived

Figure 4. Self-Perception Phase

The Philippines registeredThe Philippines registered

2.3. The Philippines registered the highest new business rate as