THE EFFECTIVENESS OF PETRON LOAN PROGRAM IN MUNICIPALITY

OF ROSARIO FOR SMALL SCALE ENTERPRISES

ROSEVEE A. DELA VEGA

GICELLE I. NAVARO
ROSELYN O. PINEDA
An undergraduate thesis outline submitted to the faculty of the Management Studies
Department, Cavite State University-Rosario Campus, Rosario, Cavite in partial
fulfillment of the requirements for the degree of Bachelor of Science in Business
Management Major in Marketing Management with Contribution No. Mngt. 0000-00000, Prepared under the supervision of Mr. Arman A. Ambas

INTRODUCTION

Rosario is one of the progressive municipalities in Cavite. Businesses located in

Rosario include industrial company, small enterprises and fishing industry. Last 2013, the
town of Rosario had been placed under a state of calamity due to oil spill caused by the
Petron Company. Because fishing industry is the primary sources of income in the city,
almost 300 fishermen were affected in the incident. Petron Company admitted that its
their fault, so to solve the problem they offered this program to the municipality of
Rosario, known to be the Petron Loan.
Petron loan is one of the programs of municipality of Rosario wherein the Petron
Company can lend money to the entrepreneurs to build and sustain their businesses. This
kind of loan was created to give opportunities and benefits to the residence and to the
owners of small businesses of Rosario without interest.

This study aims to determine the effectiveness of the Petron Loan of the
Municipality of Rosario to the small scale enterprises. The proponents will also determine
its importance and the ability to know how it can help the entrepreneurs in Rosario,
Cavite.

Significance of the Study

The researchers believe that the proposed study will provide data and information
that will help future researcher to determine the effectiveness of Petron loan program in
municipality of Rosario for small scale enterprises. It also serves as reference material for
the students who will conduct similar study.

Objectives of the Study

The general objective of the study is to determine the effectiveness of Petron loan
program in municipality of Rosario for small scale enterprises.
Specifically:
1. To determine the recipients of Petron Loan
2. To determine the benefits provided by Petron loan
3. To assess the effectiveness of Petron Loan in terms:
3.1 Accessibility
3.2 Usefulness
3.3 Opportunities
.

Time and Place of the Study

The proposed study will be conducted in Rosario, Cavite. This study will be
conducted on month of September to March 2016. The preparation of outline and the

writing of the manuscript were conducted within the campus of Cavite State UniversityRosario and while the survey and interview was conducted within Rosario, Cavite.

Scope and Limitation

This study will be conducted in Rosario, Cavite. Where the entrepreneurs will be
the participants for completing the survey. It is designed to investigate the effect of the
Petron loan program to the small scale enterprises. The study focuses only on the
effectiveness of Petron loan program in municipality of Rosario for small scale
enterprises. Questionnaire will be distributed to the respondents which were conducted
from October to November in the 2nd semester of AY 2015-2016.

Operational Definition of Terms

Petron Corporation- is the largest oil refining and marketing company in the
Philippines. Supplying nearly 40% of the countrys oil requirements, the companys

world-class products and quality services fuel the lives of millions of Filipinos. Petrons
vision is to be the leading provider of total customer solutions in the energy sector and its
derivative businesses.
Lending- Organization such as a bank, credit union, or finance company that makes
loans. It may or may not also be a depository institution.
Program- A plan of action aimed at accomplishing a clear business objective, with
details on what work is to be done, by whom, when, and what means or resources will be
used.
Small-scale enterprise- sometimes called a small business that employs a small number
of workers and does not have a high volume of sales. Such enterprises are generally
privately owned and operated sole proprietorships, corporations or partnerships.
Loan- An arrangement in which a lender gives money or property to a barrower, and the
borrower agrees to return the property or repay the money, usually along with interest, at
some future point(s) in time.
Industrial Company-A classification that refers to a group of companies that are related
in terms of their primary business activities.
Effectiveness- The degrees to which objectives are achieved and the extent to which
targeted problems are solved. In contrast to efficiency, effectiveness is determined
without reference to costs.

Review of Related Literature

This chapter focuses on the review on related literature and related studies which
includes the foreign and local literature.

Berger et al. (2005) complete a study on the effect of bank mergers and acquisitions on
small business lending. This effect is consistent with prior research. The theory behind
this is that larger, more complex institutions become less relationship-based and less
localized in their strategies. Small businesses are therefore negatively impacted by bank
consolidation as securing small business loans is heavily dependent on owners forming
relationships with bankers. Berger et al. also find that the decline in relationship-based
lending is offset by the response from other banks in the market that adjust their strategy
to take advantage of underserved small businesses. Thus they conclude that the supply of
credit to small businesses does not change significantly by the merger activity of financial
institutions.

Similarly Evanoff and Segal (2009), observe significant growth in the early 1990s of
mortgage originations to groups targeted by the CRA: minority and low-income
individuals and neighborhoods. They test for whether these changes can be explained by
either regulatory changes in the 1990s or other factors. Using regression analysis they
evaluate the quarterly growth rate of originations by controlling for the gross domestic
growth (GDP) rate, change in mortgage rates, the consumer price index (CPI) growth rate
as well as seasonality using quarterly indicators. Evanoff and Segal include binary
variables to compare lending pre and post legislative changes that strengthened the CRA.

Soller (2006) concluded that larger banks are less likely to provide small business loans
than banks with less capital. The main argument for this is that small banks are able to
lend to small businesses at a lower cost than large banks. If larger banks suffer from
higher costs of making relationship loans, then the new bank formed by the merger or
acquisition should give fewer small business loans after the consolidation
Nakamura (2008) suggests that small banks appear best able to lend to local small
businesses because small banks have the ability to closely monitor these firms, and their
tight organizational structures enable them to effectively use the resulting 10
informational advantage.
Zena (2005) Borrowers have to be given an opportunity to borrow for their perceived
needs because loans are more valuable when they meet borrowers need. The credit
delivery system can focus on the needy part of households through establishing clear
criteria for eligibility.
William (2007) is any asset of value that can be pledged by the borrower(s) as security
that the loan will be re-paid in full and with interest. Collateral requirements in the
process of borrowing for a business can range up to and above 100 percent of the loan
principal. This percentage depends again on the amount of risk that the lender calculates
that his institution is exposed from this particular loan and the accumulation of all loans
currently in process.

METHODOLOGY

This section discusses how the study will be conducted. It gives the research
design, sources of data, data gathering procedure, research instrument, data analysis and
statistical treatment.
Research Design
The researcher adapted the descriptive type of research in the conduct of the study.
The descriptive research design was prepared through survey and interview with the aid
of the prepared questionnaire.
Sources of Data
The participants of the study are the recipients of Petron Loan. They will answer
the questionnaire that the researchers will give to them which supplies the information
the researchers needed.
Data Gathering Procedures
The data for this study will be collected using survey questionnaire. The survey is
comprised of questions which related to the topic and to the needs of the researchers. The
proponents will assure the confidentially of their survey sheet for their privacy of
opinions.
Data Analysis

After the retrieval of the survey questionnaires, the data that gathered will be
tabulated and interpreted using frequency and percentage distribution to determine the
entry of surplus appliances shops and its effect on selected appliance store. The aim of
the survey is to obtain pertinent data to achieve the research objective.
Statistical Treatment
Survey will be conducted in Rosario, Cavite .The survey questionnaires include
set of questions that seeks to answer the given problem of the study and meet the sets of
objectives. After the retrieval of the survey questionnaire,

data

will

be

tabulated,

analyzed and interpreted using the mean, frequency and percentage distributions.
Mean (Arithmetic Mean)
Where:

ix
x =

N
X= is the mean and is read as X bar
x= is the sum of scores of measures
N= is the number of cases
Percentage

P=

F x 100
N

Where:
P= percentage
F= frequency of the number of data values in population
N= is total number of data sample population
100= constant

Research Instrument
The most effective way in conducting data is use a questionnaire; it is a list of
survey question asked to the participants and design to extract specific information. It is
also the most useful instrument in the research study. The participant used this as
instrument in collecting and gathering data for this study.