2.

1 Political Environment

Taxation: The provincial government of Ilocos Norte is granting a one-month extension of the deadline
for payment of business renewal fees, taxes and other government fees until Feb. 29, as confirmed by the
Provincial Board member Franklin Dante Respicio.

According to him, "The resolution was certified as urgent by Governor Matthew Joseph Manotoc to
extend the payment of government developmental fee, other taxes, and fees by business owners and
operators in the province of Ilocos Norte, without surcharges and penalties.”

He also added that the consideration of giving extended deadlines is due to the economic losses that the
business owners struggle especially during the pandemic, thus giving them temporary relief in paying
their taxes while recovering.

Investment Development: The PGIN, being aware of the significant contribution that investments from
large corporations would result to employment generation and economic growth, enacted Provincial
Ordinance No. 061-2019, enacting the Ilocos Norte Investment Code of 2019. The PO No. 061-2019
Section 3 has the following objectives:
(a) To enhance and to promote the province's inherent competitive advantages in commerce, industry,
eco-tourism, and other areas of desirable and preferred investments,
(b) To create a framework for the support and development of entrepreneurial activities,
(c) To encourage modern and innovative processing activities that will add value to local products that
meet international quality standards;
(d) To partner with the private business sector and civil society groups in achieving sustainable
development;
(e) To promote balanced growth,
(f To generate jobs:
(g) To substantially reduce the incidence of poverty in locos Norte in line with the United Nations
Sustainable Development Goals

2.2 Economic Environment

Economic Growth: According to the PSA Region 1, the data released last January 12, 2024, shows that
in the Ilocos Region, Ilocos Norte was the fastest-growing province in 2022 with 8.7 percent. This was
followed by La Union, with 7.7 percent, Pangasinan, with 7.4 percent, and Ilocos Sur, with 7.1 percent.
llocos Norte also posted 122.33 thousand pesos per capita GDP, the highest in llocos Region.
Meanwhile, in 2022, Accommodation and food services activities exhibited the highest growth at 39.0
percent while Wholesale and Retail Trade, Repair of Motor Vehicles, and Motorcycles registered the
biggest contribution to the regional economic growth at 1.54 percentage points.

Inflation Rate: According to data released by the Philippine Statistics Authority (PSA), the inflation rate
for the Ilocos Region in February 2024 was 2.0, which is 6.3 percentage points less than the rate recorded
in February 2023.
The Ilocos Region's inflation rate for February 2024 is likewise less than the 3.4 percent national average
for the same period.
Additionally, the region's food index inflation rate decreased, falling from 10.9 percent in February 2023
to just 7.1 percent in February 2024.
Food items that have contributed to the decrease include fruits and nuts; fish and other seafood; milk,
other dairy products, and eggs; flour, bread and other bakery products, pasta, and other cereals; and all of
these items had lower inflation rates in February 2024 than they had in February 2023.

Employment Rate: Ilocos Norte has the lowest rate of poverty in the Ilocos Region, at 2.5 percent in
2021, according to information supplied by Carlos Bernardo O. Abad Santos, Undersecretary of the
National Economic and Development Authority (NEDA). In the medium run, he believes the Region can
attain a 7.3 percent poverty rate and a 7.0 to 7.5 percent GRDP. The Ilocos Regional Development Plan
has six main methods that will help achieve this, some of which include boosting social development and
human capital and improving income-earning capacity.
“I think the Region can do even better because in 2018, it has already achieved a poverty rate of 9.9
percent,” Usec. Abad Santos added.

2.3 Socio-cultural Environment

Demographics: The location of the business influences opportunites as well as threats. Locating the
business in front of a university exposes the business with a huge market presence especially that it is
easily accessible by the students and faculties. However, competitors in the industry are prevalent since
there are several similar businesses nearby. Nonetheless, profitability is ensured because of the number of
customers expected to buy while maintaining quality and affordable products to offer.

Market Preferences: Consumers from different markets exhibit wide preference differences due to
natural variation in tastes and income disparities. These are mainly reflected by consumers’ accepted
price and quality levels. A study on university students in the Philippines found that while students who
were boarding with cooking, living at home with parents, and living in dorms ate more frequently meat,
milk, bread, fast food, and instant noodles, students who were living at home with parents and in dorms
ate more frequently milk, milk products, and kimchi. Furthermore, a consumer survey in a university fast-
food mall revealed that variety, price, and wholesomeness were the main factors influencing average
student customers' happiness.

Purchasing Behavior: Filipinos seek out promotions that offer their favorite products at lower prices and
seem to be doing more price comparisons before making any purchases (Cosep, 2019). They prioritize
finding the best deals, discounts, or special offers to maximize the value of their purchases. Often, they
have their budget plans of how they will divide and allocate their money/allowance for their needs and
wants either daily, weekly or monthly. To achieve this, they aim to make their money go further by taking
advantage of discounted prices to have more savings from their budgeted money.

2.4 Technological Environment

Technological advancement: Ilocos Norte, like many other regions in the Philippines, has been
experiencing technological advancements in various sectors. These advancements may include
improvements in infrastructure, such as the expansion of internet connectivity and the adoption of
digital technologies in agriculture, education, and healthcare. Additionally, initiatives to promote
renewable energy and environmental sustainability have been gaining momentum in the region.

Meanwhile, Four cities in the Ilocos Region, including Batac City, have been included among the pilot
areas for the Department of Science and Technology’s (DOST) Smart and Sustainable Communities
Program. The Smart and Sustainable Communities Program is in line with the Philippine Development
Plan (PDP), which aims to deepen economic and social transformation in the country.

According to the Philippine News Agency (PNA) report, Michael John Maquiling, DOST-Ilocos science
and technology specialist and smart program coordinator said, “Local government units (LGUs) of these
areas need to prioritize the digitalization of their transaction processes and introduce technologies in
agriculture as well as in disaster risk reduction and management.”

Also, DOST-Ilocos information officer Christian Dominic Casimiro said the program aims to introduce
and improve technological advancements that will help the communities.

Social Media and Internet Connection: It has been reported that 725,144 households, or more than half
of the 1,306,170 total households in the Region, had internet connectivity of some kind in 2020.
Regarding the type of internet connection, 562,886 households in the region, or 43.1% of all households,
used mobile broadband networks. Meanwhile, As of January 2023, the number of social media users in
the Philippines was 84.45 million. This number means 72.5% of the country's population stays
connected online. Unsurprisingly, with the popularity of Tiktok and its viral trends, Gen Z, together
with their selfie techniques, comprises the most significant demographic of social media users, with
30.6% of total users aged 18 - 24 years old. The influence of social media Platforms in the
Philippines benefits businesses in exploring and marketing their products.

3.5 Legal Environment

Philippine Competition Act: Republic Act No. 10667 or the Philippine Competition Act (PCA), is a
law established in 2015 that aims to promote fair competition in trade and commerce within the
country. This law sets out the legal framework for competition policy and regulation to prevent anti-
competitive behavior in the market.

The PCA includes provisions that safeguard consumers from fraudulent, unjust, and unreasonable
sales practices brought by close-fisted sellers. It also requires businesses to disclose product
information to consumers. Furthermore, this law promotes fair competition in public procurement
and government contracts, aiming to create a transparent procurement process.

Barangay Micro Business Enterprises Act: To support the growth of micro-enterprises in the
Philippines, Republic Act No. 9178, the Barangay Micro Business Enterprises (BMBE) Act, was signed
into law in 2002. If your business has assets not exceeding 3 million with not more than 10 workers, it
qualifies for BMBE.To register, your business needs to comply with the requirements set by the
Department of Trade and Industry (DTI) or the local government unit where you operate.

This law offers a way for micro-businesses to register as BMBEs and gain access to benefits, such as
exemption from income tax and other fees for the first three years of operation. They are also exempted
from the minimum wage law and can avail of government financing programs and technical assistance.