Contemporary Economic Issues Facing the Filipino Entrepreneur ( Investment and interest rate, Rentals, Minimum wage, Taxes )

INVESTMENT

is a product that people buy with the hope of that they will be beneficial or will generate income in the future

TWO CLASSIFICATOPN OF INVESTMENT

1.SHORT TERM

2.LONG TERM

Short-term investments

• also known as marketable securities or temporary investments, are financial investments that can easily be converted to cash, typically within 5 years.

• are sold or converted to cash after a period of only 3-12 months

LONG-TERM INVESTMENT

includes buying of property and plan to resell them if the value increase, other buy stocks and bonds if keep these assets for more than one year.

Philippine stock exchange

is a place where traders can buy and sell stocks

Stocks

is a proof of ownership of a certain portion of the corporation and you are entitled to a percentage share of all its gains and losses.

Bonds

where a company directly borrow money from you in exchange for an interest

Interest

is the amount paid regularly at a particular rate for the payment of borrowed capital for the rate of 6% per annum as per BSP in the absence of any stipulation in the contract.

Bangko Sentral ng Pilipinas Monetary Board Resolution 796, dated May 16, 2013 (% of Interest)

• The Rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgements, in the absence of an express contract as to such rate of interest, shall be six percent (6%) per annum)

Rent

is the payment for the use of land belonging to the landowner.

Endo

• is derived from an abridge version of the phrase “end of contract”.

• is also sometimes referred to “5-5-5”, referring to the number of months until a non-regular employee’s termination or end of contract

Effects of High Taxes on Business

1. Inadequate Income

2. Low wages

3. High prices

4. Substandard Products

5. Product Unavailability and Continuation

6. Poverty and High Crime

Tax Reform for Acceleration and Inclusion (TRAIN) Act

• This tax reform package corrects a longstanding inequity of the tax system by reducing personal income taxes for 99 percent of taxpayers, thereby giving them the much needed relief after 20 years of non-adjustment of the tax rates and the brackets.

• will lower the tax liability of the tax payer that will result to high net pay. The individual now can purchase goods above their means.

Inadequate Income

workers feel the greater part of this burden.

Low wages

- so many taxes that the employee cannot pay good wages

High prices

- have to raise prices of the product to pay taxes.

Substandard Products

- more money spend in paying multiple taxes than spend to improve the quality of the product.

Product Unavailability and Continuation

- property taxes make the business. To have a second thought in stocking products with lower quantities

Poverty and High Crime

- many people unable to find jobs and commit crimes that makes businesses feel unsecured