STATEMENT OF THE PROBLEM
Local economies have benefited from startups since they have inspired many
people to start their own firms. "Transformational" startups are the most economically
important firms with plans for regional or worldwide expansion and have a big impact
on the economy. Growth engines are new enterprises. Strategies to promote
competition and aid transformational entrepreneurs must be devised in order to avoid
economic stagnation. Government funding is crucial, but the emphasis must be local.
Cities must promote entrepreneurship through their initiatives. Political and legislative
agendas cannot ignore entrepreneurs as a side issue any longer since they are
crucial to regional and national economy. They were breaking down obstacles and
promoting encounters. empowering owners of businesses. (Impacts of Startups on
Local Economies., n.d.)
Despite being in a strategic position and having interested foreign investors,
the Philippines nevertheless lags behind its neighboring Southeast Asian nations.
Deals worth 31.8 million dollars were made in the Philippines in 2018, which is just a
third of those made in Vietnam and Thailand and less than a tenth of those in
Indonesia. The skill sets of the Filipino population are one of the causes of the delay.
Arguments that information technology, business process outsourcing, and tourism
may act as the main engines for the Philippines and other developing nations to
achieve sustainable and equitable economic growth have grown in popularity (Ghani
2010, Pasadilla 2006). Furthermore, according to a research by the Asia-Pacific
Economic Cooperation, the manufacturing, import-export, and service sectors were
crucial to the Philippines' economic development between 2010 and 2014. This
pattern reveals a lack of advancement in the nation's technology and entrepreneurial
sectors.
The undeveloped startup culture in the nation is another problem it has. In a
news article by Lopez (2019), Natasha Bautista claims that "some founders may
seek mentorship from entrepreneurs who may not have had experience in the start-
up scene, and so they get traditional advice, which isn't always applicable to a start-
up seeking scale early on." The majority of entrepreneurs and investors in the
Philippines presume that start-ups are the same as any other entrepreneurial
venture.Due to a low confidence level, this results in ineffective business
establishment strategies and reduces the number of investors in the nation. Kalibrr, a
start-up offering a skill-matching employment marketplace, received $9 million in
finance, although Rivera, the CEO, claims that most of it came from overseas
investors. This demonstrates that if local investors and the government become
involved in local start-ups' projects something that is currently lacking in the nation
they will have a greater chance of growing.
In 2022, the Philippine economy saw rough seas as external challenges
complicated its epidemic recovery. The domestic economy, supported by consumer
spending, is poised to close the year with spectacular growth rates. The target of 6.5-
7.5% for the GDP set by the Marcos Jr. government is anticipated to be met in 2022.
Nonetheless, due to base effects, Jun Neri, Domini Velasquez, and Leonardo
Lanzona all assessed the performance of the domestic economy to be a "failure." In
2021, the economy was still dealing with pandemic obstacles as regulations kept
most customers at home (Agcaoili, n.d.)
A weak peso, typhoon damage, high gasoline prices, and global supply chain
disruptions are all contributing factors that will cause inflation to reach its peak in
December. The prediction was given by the Bangko Sentral ng Philippines during its
rate-setting meeting this month, when inflation reached an almost 14-year high of
8%. Although the Asian Development Bank expects the country's inflation to peak
shortly, economic development and growing prices have left the nation's poorest
citizens behind. Due to the collapse of commodity and energy prices worldwide
caused by Russia's invasion of Ukraine, rising countries like the Philippines are now
more susceptible to price fluctuations. Commodity prices are still being artificially
raised by domestic shortages, and it's still unclear how to handle shortages in
agriculture (Royandoyan, n.d.)
