Micro Enterprises’ Level of Awareness and Intention to Avail Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

Micro Enterprises’ Level of Awareness and Intention to Avail Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

Figueroa, Derick S.*; De Guzman, Dana Shane; Gonzales, Anlie P.; Guerrero, Mharvie Blaise B.; Pimentel, Bredgitt Kyle V.

Accountancy Department, College of Business and Accountancy,

Tarlac State University

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2024.803063

Received: 26 February 2024; Accepted: 29 February 2024; Published: 05 April 2024

ABSTRACT

Micro enterprises perform a critical role in local communities through providing low-income populations greater prospects for employment and a livelihood, thereby increasing their quality of life. Ninety-nine and fifty-eight hundredths of business enterprises in the Philippines are classified as micro-enterprises based on employment and asset size. The Philippines has recognized the importance of micro-enterprises and has passed laws such as the BMBE Law of 2002, Magna Carta for MSME of 2008, and Go Negosyo Act of 2014 to support the establishment, integration, and sustainability of these businesses. Microenterprises, despite their economic importance, frequently do not know about the laws and regulations that are intended to encourage and promote their expansion.

The purpose of the study was to evaluate Tarlac City’s microenterprises’ profile, awareness, and intentions. A structured questionnaire was used to survey one hundred micro-enterprises. The results show that most micro-enterprise owners are married, female, have completed high school level, work in the apparel industry, and have been in business for one to three years. Results of the study revealed that micro enterprise owners have low level of awareness when it comes to the salient features and provisions of the Go Negosyo Act, Magna Carta for MSMEs, and BMBE Act.

Business regulators and different departments of the government assisting the micro entrepreneurs will play a vital role in educating the micro enterprise owners of their privileges. Considering the attractiveness of the incentives and benefits promised by the three laws, micro entrepreneurs were interested to avail of these given the right orientation and assistance.

Keywords: Micro Enterprises, Barangay Micro Business Enterprises Act of 2002, Magna Carta for MSMEs, Go Negosyo Act

INTRODUCTION

Micro-enterprises play a crucial role in local communities, providing jobs and income-generating opportunities that improve the quality of life for low-income groups. In the Philippines, micro-enterprises are defined based on employment and asset size, with the Philippine Statistics Authority classifying them as micro if they have less than 10 employees and as micro if they have up to Php 3,000,000 asset size.

As of June 2023, the country has 1,080,810 business enterprises, with 99.58 percent being micro, small, and medium enterprises (MSMEs). MSMEs generate 62.4 percent of the country’s total employment, contribute 36% of gross value added, and account for 25% of total exports.

The high importance of micro enterprises has made them an essential part of emerging and developing economies worldwide (Ndiaye, et al. 2018). Governments in developing countries have adopted the broad and varied policies to increase the capacity and sustainability of micro enterprises due to the importance of the labor force employed in these countries. A lot of micro enterprises are not aware of government restrictions, as well as laws that will benefit them.

To promote growth and development, the Philippines has implemented three laws: the BMBE Law of 2002, Magna Carta for MSME of 2008, and Go Negosyo Act of 2014. These laws aim to encourage the formation, integration, and sustainability of MSMEs, particularly Micro-Enterprises, and to alleviate poverty. Incentives and benefits for registered ‘Barangay Micro Business Enterprise’ include exemption from income tax, government intervention, and incentives for growth and development.

The Magna Carta for MSMEs mandates the government to support SMEs by providing a conducive business environment, easier access to finance, and entrepreneurship training. The Go Negosyo Act promotes the ease of doing business and facilitates access to government services for MSMEs through Negosyo Centers. However, many barangays, municipalities, and cities remain unaware of these laws, leading to low application rates that is why it is essential for both parties, the government and micro enterprises play their roles in order for the aforementioned laws achieve its intended goals.

This research was based on the study conducted by Villegas, et al. (2020) reveals that out of three hundred forty (340) respondents at the selected municipalities of District IV (Cabiao, San Isidro, San Antonio, Jaen) Nueva Ecija, 234 or 69% of the respondents are micro enterprises. Based on the result of the study there are important provisions that the respondents are not aware of. The study of Villegas will be used in the current study, given that the problem is the lack of awareness in significant areas that results to the unfavorable impact on the business and forfeiture of benefits that are available.

Statement of the Problem

The aim of this research is to determine the level of awareness of Micro Enterprises on the salient features of Barangay Micro Business Enterprises (BMBE) Act of 2002, Magna Carta for MSMEs, and Go Negosyo Act in Tarlac City and their intention to avail such benefits and incentives under the provisions on those laws. Specifically, it sought to answer the following questions:

1. How is the profile of Micro Enterprises Owners and the Micro Enterprises itself in Tarlac City be described in terms of:

1.1 sex

1.2 educational attainment

1.3 civil status

1.4 products offered

1.5 years of operation?

2. How is the level of awareness of the micro enterprises be described along the following laws:

2.1 BMBE Act of 2002

2.2 Magna Carta for MSME of 2008

2.3 Go Negosyo Act of 2014?

3. How is the intention of Micro Enterprises to avail itself of the benefits and incentives under the provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act described?

4. Is there a significant relationship on the level of awareness of Micro Enterprises of of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act with their intention to avail the benefits and incentives under those laws?

Hypotheses

1. There is no significant relationship on the level of awareness of microenterprises on the salient features of Barangay Micro Business Enterprise Act of 2002 with their intention to avail such benefits and incentives under this law.
2. There is no significant relationship on the level of awareness of microenterprises on the salient features of Magna Carta for MSMEs with their intention to avail such benefits and incentives under this law.
3. There is no significant relationship on the level of awareness of microenterprises on the salient features of Go Negosyo Act with their intention to avail such benefits and incentives under this law.

RELATED LITERATURE

According to United Nations Philippines, MSMEs comprise 99.5% of enterprises in the Philippines, thus earning the title of being the country’s backbone as it also employs 63% of the country’s workforce. However, underground operations of MSME qualified businesses are prevalent in the country (PhilStar Global, 2020).

The Organization for Economic Cooperation and Development or OECD on their 2012 Information Note defines underground economies or shadow economies as “Economic activities, whether legal or illegal, which are required by law to be fully reported to the tax administration, but which are not reported, and which therefore go untaxed unlike activities which are so reported.” and these includes non- registered businesses. OECD also noted that the benefit of not paying taxes is one of the main drivers of underground or shadow economies. OECD highlighted that taxpayers attitude contributes to the reasons and recommends as a compliance strategy to increase the awareness of taxpayers, particularly through taxpayers’ education and simplicity of compliance.

As reported by World Economics, the Philippines underground or shadow economy is estimated to be 34.1%, representing an approximate of $470 billion at GDP PPP levels. Some of the most common underground or shadow economy in the Philippines includes sari-sari stores and tianges, who are not registered as MSME’s but can be classified as such. (Business Diary PH, 2022) Filipino business owners are being discouraged to register their enterprise by the several processes required to register their business. Moreover, the lack of financial support to have sufficient capital and fears of taxation burdens adds up to the reasons why MSME’s suffers difficulties in handling their business. (Business Tips.ph, 2013).

However, with the introduction of Barangay Micro-Business Enterprise Law, these concerns were addressed. With assistance and free advice to entrepreneurs, the Negosyo Center of the Department of Trade and Industry or DTI urged underground and shadow enterprises to register their business. (Philippine News Agency, 2018).

The BMBE law will aid in the ease of registering a business with business one-stop shops. It also provides income tax exemptions from the operation incomes of the enterprise. In addition, it creates better business assistance with technology transfer, production and management training, and marketing assistance programs. To address the lack of starting capitals, the BMBE law exempts BMBE’s from Minimum Wage Capital and mandates a special credit window specifically for financing of the BMBE registered enterprise. Now, the question lies on the level of awareness of the MSME’s especially the underground economies on the salient features of the laws created specially to integrate them into the mainstream economy.

MPM Consulting Services defines sole proprietorship as sole owning a business engaged in providing service, such as salon, spa, restaurant, food delivery or food kiosks, travel agency, manpower agency, rentals, etc., or engaged in sale of goods, such as retailers, wholesalers, etc., both online (or thru the internet) or offline (with physical stores). Usemultiplier.com reported that over 40% of firms are registered as sole proprietorships in the Philippines as per 2015 data.

According to indeed.com, a website mainly for jobs and careers, majority of micro-enterprises are sole proprietorship circulating on one-person home businesses. With it being the simplest form under which one can operate and start a business, it is where many businesses starts and from there, develop to more complex ones. Moreover, as stated by Entrepreneur.com, owners often start with sole proprietorship because of its inexpensive nature and carries little ongoing formalities.

Most of these sole proprietorships are Sari-sari stores, laundry shops, and canteens operating under a fictitious name like “Apung Nena’s Carinderia and Sari-Sari”. When it comes to taxes, MPM Consulting Services suggests that income tax, business tax, and withholding tax in general apply to sole proprietorships. Usemultiplier.com provides that registration of sole proprietorship typically includes registration in the Department of Trade and Industry, Local Government Unit, and Bureau of Internal Revenue. The site added that establishing a sole proprietorship in the Philippines is still subject to long time consumption. A sole proprietor must also be well-versed to the local rules and regulations.

In order to delimit the study, it focused on micro-enterprises which operates under sole proprietorship, and given that despite the statement of Philippine Business Registration which stated that sole proprietorship is the simplest business structure to register and relatively easy, Inquirer.net still reported 17 Million informal workers such as Tiangge, ambulant, and street vendors, and 1.3 Sari-sari stores, all of which are considered as sole proprietorships, and who are qualified for BMBE registration, remain unregistered with the Department of Trade and Industry.

RELATED STUDIES

Microbusinesses are essential to the growth of the Philippine economy, which led to the creation of BMBE Act of 2002, Go Negosyo Act, and Magna Carta for MSMEs. The law states that micro enterprises are critical to the economic development as they are the stepping stone to the development of entrepreneurial talent of Filipinos. It aims to provide benefits and incentives to micro businesses to encourage the formation of micro businesses which will provide an avenue for job creation, employment opportunities and possible alleviation of poverty. However, despite the laws being active for years, some local governments are not actively promoting or disseminating information about the three laws (Orpilla, 2018). More than 2 decades passed yet massive progress and development cannot be seen in relation to the welfare of our microenterprises. There are still a lot of barangays, municipalities and even cities that remain unaware of the existence of such laws and this is coupled with a massive extent of dissemination failure leading to its impaired popularity to the general public (Manipol, 2023).

A study conducted by Berja (2021) found different programs and assistance that are available for micro- business enterprises however, it appears that recipients of these programs are only moderately aware of their existence, because of such a level of awareness, they might not be interested in, have not used, and or not satisfied with the different benefits that the government is providing. Further, it might be assumed that the government can do more to promote broadly the intended support for micro-business enterprises in terms of technology transfer, management, marketing, finance, and taxation. The findings also suggests that various government offices may also take this into account as a pattern when creating policies for this sector and could additionally serve as a model for creating effective programs for entrepreneurial development sustainability.

Although all the cases of micro enterprises managed to avail the discount provided by the local government regarding taxes, fees and charges as well as their right on exemption from the coverage of minimum wage law, the most attractive provision of the act which is the exemption on income tax are not successfully availed by the micro enterprises due to lack of understanding of the act and bureaucratic red tape in the government (Figueroa, 2018).

According to the study of Villegas et. Al. (2020) MSME’S are unaware of the provisions on business ownership regarding loan and technical assistance and programs and are highly unaware about the asset requirement and asset defined by the Magna Carta for MSME’s and penalties to banks and lending institutions that will not provide loan assistance. Further, they are not also aware of the centers’ additional services, which include technical aid and training.

These are alarming due to the raised issues by the study conducted by Figueroa (2018), which results present that the major obstacles faced by the micro enterprises in availing the benefits of BMBE provisions roots in lack of awareness and correct understanding of the BMBE act, noting that even personnels from the agencies; BIR, LGU, and DTI are not fully knowledgeable about the benefits and incentives. The study also noted that BIR claims no registration in the recent years, despite the claim of the study’s respondents rejected applications. The study also noted that the findings are consistent with Carpio-Aldeguer, emphasizing the inextensive implementation of the BMBE law. Aside from those discussed, findings of Figueroa (2018) found out that there are cases where MSME’s in Tarlac benefited from programs and technical assistance by the DTI and DOST.

According to the study conducted by Carpio-Aldeguer (2015) on its published research entitled “Extensive Implementation of the BMBE Law: An Assessment Across Metro Manila”, there is a significant difference between the ideal and actual level of promotion of such law in terms of awareness of micro- entrepreneurs in Metro Manila. At this point, it might be hypothesized that such an inadequate level of awareness may also apply to particular regions of the nation, particularly in this area of Tarlac. The degree of efficacy or satisfaction for diverse microenterprises is somehow impacted by the level of unawareness of the microentrepreneurs. It paints the issue regarding the lack of information and understanding of business management concepts, with majority of the respondents being afraid to incur debt, portraying risk averse MSME’S failing to value the full benefit of availing BMBE, but there is the case regarding Special Credit Window for financing, wherein an entity’s loan application was denied by a bank with neither assistance desk nor priority table or special lane for BMBE’s. Additionally, there is a big difference between how these laws are actually implemented and how they should be, which affects how effective they are for Tarlac’s microenterprises. The level of awareness of MSMEs can signify whether or not the agencies concerned regarding the implementation of the laws are effective when it comes to the information dissemination and operation agency office and or centers. This suggests that the legislation is not being properly executed throughout areas and that there may be mistakes or information implementation failures that prevent the other microenterprises from being aware of such laws.

The paper of Aimee Hampel-Milagrosa, 2014 suggests that empirical data reveals that MSE’s are becoming stagnant in their sizes. Furthermore, it states that Philippines is an excellent place in the Asia to study the dynamics of enterprise upgrading.

The BMBE law provides specific financial assistance, trainings and seminars, and technological assistance, particularly in loans along with its highlight of tax incentives. In support, Ramadona et. Al 2022 found that information technology, bank credits, human index, and low interest rates have a positive impact on the level of growth of MSMEs.

However, with the results from Villegas, parts of these incentives offered by the act that can lead to MSME’s growth are unknown to the respondents. Figueroa 2018 suggests that there are cases where MSMEs are aware but are not willing and are unable to avail the incentives, assistance, and benefits provided by the Act that may lead to inability to upgrade or grow from MSME.

The researchers found no empirical data that reveals the direct relationship of level of Awareness and willingness to avail, thus the researchers saw the need to explore if there is an existing relationship on Micro Enterprises’ Level of Awareness and Intention to Avail Provisions of BMBE Act of 2002, Magna Carta for MSMEs, and Go Negosyo Act.

This study aimed to determine the level of awareness of microenterprises in Tarlac Province on the salient features of the BMBE Act, Magna Carta for MSMEs, and Go Negosyo Act. Specifically, it intended to find out the following: demographic profile of microentrepreneurs; microentrepreneurs’ level of awareness with the three laws; their intention to avail the said laws; and the relationship between the two variables, fostering knowledge about these laws and helping them grow and succeed.

RESEARCH METHOD

The researchers used descriptive-correlational research design since it aimed to obtain information from respondents in describing a certain phenomenon, situation or population. Specifically, it sought to know the level of awareness of micro enterprises on the salient features of BMBE Act of 2002, Magna Carta for MSMEs, and Go Negosyo Act. Also, it wanted to determine their intention to avail the benefits and incentives under the provisions of these laws and if there is a significant relationship of the two mentioned variables. The respondents of this study were 100 micro business owners in Tarlac City, Philippines that were not currently registered as BMBEs in the Department of Trade and Industry. Also, the required criteria to be met by the respondents are business must have up to 3,000,000 asset size, less than 10 employees, must be single owned and is limited only to merchandising businesses.

According to 2021 Updating of list of the Establishment (ULE) of the Philippine Statistics Authority, there were 13,237 establishments in operation by MSME in Tarlac Province in which 12, 297 of them are classified as micro- enterprises.

Researcher-made structured survey questionnaire was used as instrument in this study. It contains four parts namely: the introductory part, profile of the owners and the micro enterprise itself, the statement-form questions relating to the three laws and the intention-to-avail additional questions. Each part of the survey questionnaire was subjected for validity test through business faculty experts of the college. Reliability test using Cronbach’s alpha on the other hand revealed the following scores: .949 for awareness of the BMBE Act; .957 for the awareness of the Magna Carta for MSMEs .974 for the awareness of the Go Negosyo Act and .752 for the intention to avail the provisions of the three laws.

The introductory part is like a letter informing the respondents about the study, particularly the purpose, average time to be taken in answering the survey, confidentiality agreement and the names of the researchers involved. Furthermore, the profile part includes the information needed in the study: name of the owner, sex, civil status, and educational attainment of the said business owner along with the type of ownership, products being offered and years of operation. Moreover, the statement-form questions which seek to determine the level of awareness of the respondents on the salient features of, BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act that are answerable by putting a check mark on the level that corresponds their answer. The statements on this part of the survey were extracted directly from the provisions of the law and are constructed the way they will be answerable as to level of awareness. Lastly are the three-statement questions to find out the intention to avail of the micro enterprises on such benefits and incentives the three laws had to offer.

The researchers conducted a pre-survey and used twelve respondents to test how valid and reliable the survey questionnaire before floating to the total sample size. Once the instrument passed the mentioned test, an actual survey was started by reaching out the owners of micro enterprises and handing out the survey questionnaire physically. Afterwards, the researchers collected the tool and expressed their gratitude towards the respondents. Further verbal interviews were conducted to further assess and or gain feedback and information from the respondents. The responses gathered were utilized with necessary treatments to transform the data into information to answer the objectives of this study.

Ethical considerations were upheld in gathering and utilizing data. The respondents were reached out with their informed consent regarding their roles and involvement in this study. The research study was conducted with the utmost regard for the Data Privacy Act of 2012. Gathered data were utilized solely for research purposes and were safeguarded. Data encryption and physical security measures were utilized. Most importantly, the respondents were informed that this research and the results will not negatively impact them.

For the treatment of data, on the profile of the owners and the micro enterprises itself, frequency distribution and percentage were used in presenting the data. However, in measuring the level of awareness of micro enterprises on the salient features of Magna Carta for MSMEs, BMBE Act of 2002 and Go Negosyo Act, weighted mean was used in presenting the data.

Not aware at all means that they do not know the law is existing meanwhile, low level of awareness means that they at least know that the law is present but hardly understand its context. For medium level of awareness, this indicates that they can understand some aspects of the law and is somewhat aware about it. Moreover, high level of awareness implies that they adequately understand a lot with regards the law however needs little assistance in some features and lastly, complete awareness possesses proficiency and knowledge about the law, or is extremely aware about it.

On the intention to avail of the micro enterprises on the benefits and incentives offered under the provisions of the three laws, weighted mean was also used. After all the data needed were gathered, the researchers tested the hypotheses by using correlation statistical analysis specifically Pearson R to test if there is a significant relationship between the level of awareness of micro enterprises on the salient features of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act with the variable intention to avail benefits and incentives under the provisions of those law.

Figure 1. Research Paradigm

RESULTS AND DISCUSSION

This section explains the results of the study and at the same time, it gives the comprehensive discussion particularly on the profile of micro enterprises, their level of awareness on the salient features of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act, their intention to avail such benefits and incentives under the provisions of such laws, and the correlation between the two variables.

Demographic Profile of Micro Enterprises Owners and the Micro Enterprise Itself

In this section, the profile of micro enterprises is delineated, specifically in terms of sex, civil status, educational attainment, years of operation, and products offered in the market. The data are presented in tables, accompanied by their corresponding frequencies and percentages, followed by a comprehensive explanation.

Table 1. Sex of Micro Enterprise’ Owners

Table 1 shows that most of the Microenterprises owners’ sex were female. This is consistent with Mojica, M.B. (2020), BSP Deputy Director of Philippine Institute for Development Studies survey in which it revealed that MSMEs are dominantly managed by females.  As of 2020, the MSME sector had more than 950,000 MSMEs, the majority of which were owned by women (Asian Development Bank, 2023).

Table 2. Civil Status of Micro Enterprise’ Owners

The table above shows that the civil status of the respondents. Most of them were married accounting for 52 percent, followed by single owners at 41 percent.

In this context, most microenterprise owners are observed to be married individuals. Married couples tend to combine their resources- materially and financially to establish a business to address their daily needs. This underscores the potential of those married couples to start a sari-sari store or so-called microbusiness as another source of income.

The incidence of married individuals with a high school degree who are engage in micro business have every reason on why them are high school graduates only, and why do them as married couple engage in sari-sari stores and start businesses. There is no definite reason and explanation on why they do it as it depends on personal preference. However, there were certain factors to consider such as limited access to formal education, employment opportunities, financial constraints, and the economic situation in the country. The choice they make to board microbusiness is influenced by couple’s ambitions, financial burden they experience, and opportunities available around them. To simply put it into context, high school graduates who are married do not have the same reason at all as everyone has their own situations which motivates them to do it and engage with it.

Table 3. Educational Attainment of Micro Enterprise’ Owners

It is seen that majority of microenterprise owners were High School Graduates at 27 percent, while College Graduate at 20 percent; following were those without formal education at 18 percent.

This case scenario in Tarlac City is constant with the status quo in the Philippines. Filipinos engaged in early-stage entrepreneurship are driven by the opportunity to improve their financial standing while only 29.4% are necessity-driven (Global Entrepreneurship Monitor, 2014). This implies that establishing a microenterprise represents one of the more accessible avenues for generating income for microentrepreneurs. Furthermore, college graduates typically pursue white-collar occupations as there are many graduates yearly who ought for it, as some high school graduates encounter challenges regarding employment, which leads them to venture into entrepreneurship.

Table 4. Years of Operation of Micro Enterprises

On table 4, most of the microenterprise owners in Tarlac City have been in operation for 1-3 years now, or those developing business with 38 percent. Secondly, business who have been in operation for 4-6 years accounts for 30% of the responses.

Greater number of microentrepreneurs emerged during the pandemic era which are in business for 1-3 years already. There were microenterprise proprietors who emerged during this time because of increase in digitalization, increased occurrence, and to people who stays at home and emerged to make business. This phenomenon serves as an indicator of ongoing development and progress in their businesses over time. As quoted by De Velez, L., (2020), “COVID-19 rebooted and changed the entire economy to something unfamiliar to most. It is a unique opportunity for the startups to start at the same time and compete with the established corporations in re-inventing businesses under a new set of reality.”

A new working paper titled Entrepreneurship During The COVID-19 Pandemic: Evidence from the Business Formation Statistics from economist John C. Haltiwanger (National Bureau of Economic Research, June 2021) confirms an unexpected and surprising economic result: a huge surge in applications for new businesses.

Table 5. Products Offered of Micro Enterprises

As seen on the table 5, most of the micro entrepreneurs were from the clothing line industry with 35 percent in frequency; followed by Food products with 23 percent.

As a merchandising enterprise, engaging in the procurement and resale of finished goods from larger corporations is more easy process. Within the realm of clothing, this industry is notably diverse, which features both new and secondhand garments commonly referred to as “ukay-ukay” in the Philippines, particularly in the modern era. Goal 12 of the Sustainable Development Goals is in harmony here, as it underscores the importance of responsible consumption and production.

Based on Rayev, K. (2022), the fashion trend is ever-changing, resulting in consumers always needing new clothes. As a result, they will buy as long as they have something new to sell. Hence, online clothing stores are one of the most profitable ecommerce businesses today- not just online, but those physical stores in which it does not go out of trend.

Level of Awareness of Micro Enterprises on the Features of BMBE Act of 2002

In this segment, tabular presentation of level of awareness of micro enterprises will be seen on each provision of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act with their respective means, standard deviation, and descriptions. Also, structured overview thereafter each table is also provided.

Table 6. Level of Awareness on BMBE Act of 2002

It can be observed that with the lowest mean of 1.92, majority of the respondents have a low level of Awareness when it comes to their knowledge on how to apply to become a registered BMBE. What can be extrapolated from this is that the Micro-enterprises are unregistered, consequently forfeiting the incentives and benefits, and as discussed by Figueroa (2018), hinders the growth of businesses.

However, this is in contrast to the highest mean of 2.37 and 2.36, that measures the awareness of the Micro-enterprises about registration with the DTI and having a Certificate of Authority. It can be extrapolated that there is a low level of awareness among the respondents, but they form a consensus of being somewhat aware that they need to register their business. Upon further interview, the respondents expressed that they have a low level of awareness because first and foremost, they find it troublesome to register their business and they view the registration as a long process.

These results are in contrast to the positive perception of the Micro-enterprises to BMBE in the study of Manipol but is similar to the cases of the micro-enterprises in the study of Figueroa (2018), where Micro-enterprises are discouraged because of the bureaucratic red tape.

The data analysis of the Magna Carta for MSMEs highlights a significant disparity in respondent viewpoints regarding government assistance for businesses. The statement emphasizing that only registered businesses are eligible for government assistance and programs stands out with the highest weighted mean of 2.28. This suggests a widespread acknowledgment of the crucial role of formal registration in accessing governmental support. On the other hand, the statement underscoring the entitlement of eligible businesses to a share of at least ten percent of the total procurement value receives a slightly lower mean of 2.04, indicating a potential lack of understanding or perceived importance regarding the specific procurement-related benefit among respondents. This suggests that the intricacies of procurement and its connection to government assistance may not be universally comprehended or considered as crucial compared to the broader eligibility.

The survey results reveal a lot disparity in awareness levels regarding key aspects of the Go Negosyo Act and Go Negosyo Centers. The statement with the highest weighted mean of 2.45 indicates that respondents generally possess a low level of awareness regarding the Go Negosyo Act’s role in facilitating local job creation, production, and trade in the country. This suggests a critical need to bridge the information gap and enlighten the audience about the Act’s potential impact on these vital economic aspects. Similarly, the statement with the lowest weighted mean of 2.08 underscores a lower awareness level concerning Go Negosyo Centers’ involvement in co-organizing mentoring programs with local chambers of commerce and other business organizations. This lack of awareness may hinder the potential benefits of such collaborative mentoring programs for prospective and current entrepreneurs and investors. These lead point to a broader issue of insufficient information dissemination and understanding about key initiatives for economic development. The need for targeted and comprehensive awareness campaigns arises from the both statement addressing the information gap related to both the Go Negosyo Act and Go Negosyo Centers. By implementing strategic communication efforts, the aim is to not only increase awareness but also foster understanding, engagement, and active participation in initiatives crucial for local economic development.

Table 6 provides a comprehensive overview of the level of awareness among respondents regarding the Barangay Micro Business Enterprises (BMBE) Act of 2002, offering mean, and insightful descriptions for each provision. The collective findings suggest an overall low level of awareness with an average mean of 2.11. Notably, respondents express a notable lack of awareness in several key areas. The highest mean of 2.37, highlights a significant gap in understanding the process of securing a Certificate of Authority, a pivotal step in accessing the benefits and privileges conferred by the Act. Additionally, the requirement for businesses to register with the Department of Trade and Industry (DTI) before availing the provisions of BMBE Act (mean 2.36), employee entitlements to benefits (mean 2.26), and provisions related to reduced local taxes, fees, and charges (mean 2.21) also demonstrate a notable lack of awareness. Further areas of limited awareness include the exemption from income tax (mean 2.19), the validity period of the Certificate of Authority (mean 2.16), and the necessity for renewal (mean 2.16). Respondents also exhibit low awareness concerning the option to avail exemption from taxes and fees upon BMBE registration (mean 2.13). Noteworthy is the broader lack of awareness regarding the existence of the BMBE Act itself, its privileges and benefits, the registration procedures, and the availability of Special Credit Delivery, all of which received mean values of 2.05. Additionally, respondents express a low level of awareness regarding the incentive of exemption from the Minimum Wage Law (mean 2.04), the potential revocation of BMBE registration when total assets exceed 3,000,000.00 (mean 2.02), and the features encompassing technology transfer, production and management training, and marketing assistance programs for BMBE beneficiaries (mean 2.01). The requirement for businesses to have less than 3 million pesos of total assets, exclusive of land where the business office is situated, also reflects a lower level of awareness (mean 1.94). Moreover, micro enterprises report a low level of awareness concerning the application process for BMBE registration (mean 1.92).

The findings underscore the need for targeted educational initiatives to enhance awareness and understanding among micro enterprises regarding the diverse facets of the BMBE Act of 2002. Based on the above result, researchers observed a significant challenge and highlights the persistent gap in awareness regarding the Barangay Micro Business Enterprises (BMBE) Act despite its existence for many years. In fact, according to Garambas and Pinos-an (2021) a limited number of business owners and barangay leaders were aware of the existence of the Barangay Micro Business Enterprises (BMBE) law. This only implies that ongoing lack of awareness, including limited dissemination of information, insufficient educational campaigns, or challenges in reaching micro enterprises with relevant information. This finding suggests addressing the issue which may involve developing targeted awareness programs, leveraging various communication channels, and collaborating with local business organizations and barangays to ensure that information about the BMBE Act reaches its intended audience that leads micro enterprises not only aware of the existence of the BMBE Act but also informed about its provisions and potential benefits maximizing the positive impact of the BMBE Act on micro enterprises.

Level of Awareness of Micro Enterprises on the Features of the Magna Carta for MSMEs

Table 7 reveals a consistent pattern of low awareness among respondents regarding key features of the Magna Carta for MSMEs, with a mean of 2.14. This indicates a lack of understanding of eight key features. The statement emphasizing that only registered businesses are eligible for government assistance received the highest score of 2.28, signaling a relatively low awareness of the importance of business registration for accessing government programs. The Small Business Guarantee and Finance Corporation also scored low, with a mean of 2.21, indicating limited understanding of its purpose and function in providing finance for business growth.

Additionally, there is a deficiency in awareness regarding programs offered by the law, particularly for the MSMED Council (weighted mean of 2.15) and the Venture Capital and Micro Finance Trust Fund (weighted mean of 2.14). Respondents also lack awareness of the assistance and programs provided by the Magna Carta for MSMEs (R.A. 9501), as indicated by a weighted mean of 2.13.

Furthermore, statements with weighted means of 2.08 suggest low awareness about the mandatory allocation of credit resources to Micro, Small, and Medium Enterprises and the eligibility requirements for government assistance. These findings highlight the need for increased communication, education, and awareness campaigns to address gaps in understanding and improve resource utilization.

Finally, there is notably low awareness regarding the provision that businesses eligible for government assistance are entitled to a share of at least ten percent (10%) of the total procurement value. The lowest mean of 2.04 underscores the necessity for focused initiatives to communicate and educate respondents about the privileges linked to government assistance for businesses.

Table 7. Level of Awareness on Magna Carta for MSMEs

In conclusion, the research underscores a persistent challenge of inadequate awareness regarding the Magna Carta for MSMEs. This issue, as supported by the findings of Villegas et al. (2020), reveals a notable lack of knowledge about key incentives outlined in the Act that could contribute to the growth of MSMEs. To address this, it is crucial to intensify efforts aimed at increasing awareness about these provisions. The recommendation to continue information drives remains pertinent to ensure a sustained and heightened level of awareness among businesses. Ultimately, closing the awareness gap is essential for businesses to fully leverage the available support and foster the growth of micro, small, and medium enterprises.

Level of Awareness of Micro Enterprises on the Features of the Go Negosyo Act

Table 8 indicates a consistent lack of understanding among respondents regarding the Go Negosyo Act and Go Negosyo Centers, indicating limited awareness of their roles and functions. Respondents showed a low level of awareness concerning the Act’s contributions to local economic activities, with a weighted mean of 2.45, suggesting a lack of comprehension about its role in stimulating economic growth.

Table 8. Level of Awareness on Go Negosyo Act

Awareness of Go Negosyo Centers’ role in facilitating access to grants, financial assistance, shared service facilities, and equipment for micro-enterprises received a low weighted mean of 2.35. Similarly, awareness of the services provided by Go Negosyo Centers, such as training and financing, had a low weighted mean of 2.30. This lack of awareness may impede micro-enterprises from tapping into essential resources provided by these centers, indicating a gap in understanding the comprehensive support services they offer.

Respondents also demonstrated limited awareness of Go Negosyo Centers establishing a feedback mechanism (2.23), potentially hindering effective communication between micro-enterprises and the centers. Additionally, awareness of the centers’ functions, including coordinating government processes (2.22), and ensuring management guidance and improved working conditions for micro-enterprises (2.20) received low weighted means, suggesting potential hindrances to full engagement with these centers for essential processes.

Awareness of Go Negosyo Centers conducting programs for entrepreneurial development (2.19) and collaborating with the private sector for micro-enterprise growth (2.11) was low, indicating a lack of understanding about the collaborative efforts between these centers and the private sector. Furthermore, awareness of Go Negosyo Centers co-organizing mentoring programs (2.08) was also low, pointing to a lack of understanding about the valuable mentoring initiatives facilitated by these centers.

The average awareness score of 2.242 underscores the need for targeted awareness campaigns to address these knowledge gaps. Bridging these gaps is crucial for empowering micro-enterprises to make informed decisions, fully engaging with the resources offered by the Go Negosyo Act and Go Negosyo Centers and fostering sustained development among micro-enterprises. The findings also highlight a lack of awareness regarding mentoring programs, financial assistance, and management guidance provided by these centers.

The identified lack of awareness among respondents regarding key aspects of the Go Negosyo Act suggests a disparity in the effectiveness of information dissemination by the Department of Trade and Industry (DTI), contradicting a prior study by Villegas et al. (2020). This discrepancy implies potential adverse effects on businesses, leading to a forfeiture of available benefits. To address this issue, it is recommended to sustain efforts in raising awareness about the Act’s provisions. The DTI, alongside other agencies, plays a crucial role in supporting Go Negosyo Centers through technology transfer, production assistance, management training, and marketing. The ongoing information drive is vital to ensure businesses can fully capitalize on the support available, and collaboration with other stakeholders may enhance the reach and impact of these efforts.

Intention to Avail Incentives and Benefits under the Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

This section will explore the intention to avail incentives and benefits under the provisions of BMBE Act of 2002, Magna Carta for MSMEs, and Go Negosyo Act, accompanied by means, standard deviation, and a descriptive analysis. Subsequently, a detailed explanation will be provided to enhance comprehension.

Table 9. Intent to Avail the Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

Based on the results, the Micro-enterprises agree to avail the incentives and benefits under the provisions of the BMBE Act of 2002, with a weighted average mean of 3.38 with description of Agree; Magna Carta has a weighted average mean of 3.51 with description of Agree and Go Negosyo Act has a weighted average mean of 3.54 with description of Agree. The General Weighted Mean of the three laws is 3.48 with a description of Agree.

It is indeed remarkable that the results unequivocally underscore the unexpected alignment of perspectives among the respondents as they form a consensus on agreeing to avail the incentives offered under the three laws given that upon interview majority of the respondents claimed to have low level of awareness.

These results contradict the findings of Garambas and Pinos-an 2021 that presents that there is a correlation with the level of awareness to the willingness of the respondents to register as BMBE and to avail the incentives under the laws.

However, upon further interviews with the respondents, they claimed that while answering the questionnaire or instrument by the researchers, they have caught more glimpse and understanding about the three laws, rendering these advantages more appealing and motivating respondents to take them into consideration. This is then aligned with the results of Garambas and Pinos-an, that there is a correlation between the perceived implementation and willingness to avail.

Their results further explain why these study’s results similarly found BMBE unregistered micro-enterprises to have low levels of awareness with regard to the three laws as Garambas and Pinos-an stated that the lack of understanding about the laws hinders micro enterprises from registering.

Correlation of Level of Awareness and Intention to Avail Incentives and Benefits under the Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

In this segment, the correlation between the level of awareness and the intention to avail incentives and benefits under the provisions of BMBE Act of 2002, Magna Carta for MSMEs, and Go Negosyo Act were assessed. The Pearson correlation coefficient (R) test will be utilized to determine if a significant relationship exists between these two variables.

Table 10. Correlation of Level of Awareness and Intention to Avail the Provisions of BMBE Act of 2002, Magna Carta for MSMEs and Go Negosyo Act

Based on the results, the relationship between the awareness of Micro-enterprises on the salient features and their intention to avail such benefits and incentives are as follows:

The BMBE Act of 2002 the computed p value is 0.879 which is greater than 0.05 which is not significant, therefore we accept the null hypothesis that there is no significant relationship on the level of awareness of microenterprises on the salient features of Barangay Micro Business Enterprise Act of 2002 with the respondents’ intention to avail the incentives under this law.

For the Magna Carta, the computed p value is 0.074 which is also greater than 0.05, which is also not significant, therefore we accept the null hypothesis that there is no correlation between the level of awareness of microenterprises on the salient features of Magna Carta for MSME’s with the respondents’ intention to avail the incentives under this law.

To reiterate and underscore the points that were previously discussed, upon interview the respondents expressed that they were only made aware of the salient features of the BMBE Act and Magna Carta for MSME’s after answering the questions related to their level of awareness. They conveyed their interest in accessing the incentives based on the information presented in the questionnaire.

Still, the results are in a way like the findings of studies of Manipol, Villegas, and Garambas and Pinos-an that what forfeits businesses from claiming and benefiting from the incentives is the lack of awareness.

Lastly, for the Go Negosyo Act, the p value is 0.027 which is less than 0.05 which is highly significant, therefore we reject the null, and that this implies there is a significant relationship between the level of awareness of the respondents to the salient features of the Go Negosyo Act and their willingness to avail. The statistical findings reveal a negative correlation between the variables, indicating a mere association without implying a causal relationship. It is crucial to refrain from interpreting the results as establishing cause and effect. Formulating inquiries about the potential impact of heightened awareness on decreased willingness is inappropriate, given the nature of cause-and-effect relationships.

It is recommended to exercise caution when interpreting the statistical outcomes, and to avoid misconceptions associated with preconceived notions about the connection between awareness and intention. These results provide a snapshot of a specific instance and should not be extrapolated beyond their scope.

In light of the statistical analysis indicating a negative correlation between variables, a post-survey interview was conducted to deepen the understanding of the phenomenon. The insights gleaned from the interview highlighted that respondent became aware of the three laws primarily through information presented in the questionnaire.

While the statistical results provide assurance of the negative correlation, it is imperative to exercise caution and acknowledge the potential influence of confounding variables or spurious correlations, especially in the context of repeated measures. The interview emerges as a crucial component in this analysis, offering a qualitative dimension that complements and enriches the quantitative findings. By delving into respondents’ perspectives and experiences, the interview provides a clearer and more nuanced picture of the scenario, contributing valuable context that extends beyond the limitations of the statistical results.

CONCLUSION

As we draw the curtains on our exploration into the correlation between awareness and the intention to avail incentives and benefits within the micro-enterprise landscape, the journey through data analysis and interpretation has uncovered intricate insights. This section serves as the culminating reflection on the significance of our findings and seek to answer the objectives of this study.

The majority of microenterprise owners in Tarlac City are females who have graduated high school, are married, and are primarily involved in the clothing line business, with most having operated for 1-3 years. A significant finding is that the respondents exhibit a low level of awareness regarding the salient features of the BMBE Act of 2002, Magna Carta for MSMEs, and the Go Negosyo Act in Tarlac City. Despite this lack of awareness, a noteworthy proportion express the intention to avail themselves of the benefits and incentives provided under these legislations. Notably, while there is no significant relationship observed between the awareness of microenterprises about the BMBE Act of 2002 and Magna Carta for MSMEs and their intention to utilize associated incentives, a highly significant relationship exists between their awareness of the Go Negosyo Act and the intention to leverage the incentives and benefits outlined in its provisions.

With these findings, here are some recommendations to ensure compliance and foster a supportive business environment:  for government and microentrepreneurs who may not be well-versed in business laws and provisions. For Government: (1) extending one-stop shop, support agencies for small businesses, and trainings and workshops using simplified information to broaden the scope of informing microentrepreneurs up to the barangay level and even in the city proper; (2) regular updates: laws and policies are promptly communicated through various channels to make microentrepreneurs informed. Moreover, for microentrepreneurs: (1) networking or mentorship: joining business associations, chambers of commerce, or industry groups; (2) taking advantage of online resources provided by government agencies through social media and different websites; (3) attending workshop or trainings and staying informed on laws and regulations related to the business.

By implementing these recommendations, both government entities and microentrepreneurs can contribute to a more informed and compliant business environment and could foster growth and sustainability in the micro business sector.

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AUTHOR’S BIOGRAPHY

	Dr. Derick S. Figueroa is a registered Certified Public Accountant in the Philippines. He graduated with a degree Bachelor of Science in Accountancy in 2012, Master in Business Administration in 2016 and Doctor of Business Administration in 2022. He is currently an Accounting Teacher and serving as the Chairperson of the Accountancy Department and the Research Chairperson of the College of Business and Accountancy of Tarlac State University, Philippines. He has been in the service of teaching for 11 years.
	Dana Shane De Guzman is currently taking her bachelor’s degree at Tarlac State University under Accounting Information System Program. She graduated with high honors at Dr. Ramon De Santos National High School, Accountancy and Business Management Strand. She is also a completer, with high honors at Dr. Ramon De Santos National High School and finished elementary level at Talogtog-Bateng Elementary School, with honors.
	Anlie P. Gonzales is currently taking her bachelor’s degree at Tarlac State University under Accounting Information System Program. She graduated with honors at Tarlac National High School, Humanities and Social Sciences, with awards of Special Citation in Research and Work Immersion. She is also a completer at Tarlac National High School and finished elementary level at Tarlac West Central Elementary School, both with honors and special citation in Journalism.
	Mharvie Blaise B. Guerrero is currently taking her bachelor’s degree at Tarlac State University under Accounting Information System Program. She graduated valedictorian at Padapada National High School, Accountancy and Business Management Strand, with awards of Special Citation in Research, Leadership Award, Best in Mathematics and has National Certificate III in Bookkeeping and National Certificate II in Computer Systems and Servicing. She is also a completer, with honors at Sacata National High School and finished elementary level as first honor at San Francisco Elementary School.
	Bredgitt Kyle V. Pimentel is currently taking her bachelor’s degree at Tarlac State University under Accounting Information System Program. She graduated with honors at Padapada National High School, Accountancy and Business Management Strand and has National Certificate III in Bookkeeping. She is also a completer, with honors at aforementioned secondary school and finished elementary level at Santa Ignacia South Central Elementary School..