BXY Company has been in the retail sale of feeds, fertilizers, and insecticides since

1985. The company’s major clients include Del Monte Philippines and Dole
Philippines. Large and small fruit vegetable growers, traders, assemblers and
processors are also among their customers and have continued patronage to this
date. It is also distributing the following products in Mindanao: humic acid, soil
conditioner and hybrid corn.

The company’s sales continued to increase in the past three years with significant
growth in 2018 due to sustained demand for fertilizers and insecticides despite price
increases. It projects that sales shall continue to grow since starting this year they
have directly sold to farmers.

Competition is tight as there are other wholesalers of fertilizers in Northern

Mindanao. The company though has an edge over its rivals as it has been in
operation for more than three decades already and has established suppliers and
loyal clientele who are nurtured through the years.

The company started its banking relationship in 2015. Deposits continue to increase
and are expected to grow this year. It is interested in the collection facility of the
bank as it plans to sell goods directly to farmers.

Industry Prospects:
Prospects for the manufacturing of fertilizers and nitrogen compounds, pesticides
and other agro-chemicals remain favorable due to increasing demand boosted by
increase in production of some crops, government initiatives to increase production
of crops, crop infestation in some parts of the country which encourage fertilizer use
and easier access to export markets under the ASEAN Trade in Goods Agreement.
World and regional demand forecasts for plant fertilizer is seen to be increasing until
2020. The global capacity of the production of fertilizers, intermediates and raw
materials is also expected to increase over the forecast period.

For BXY Company, bright prospects are foreseen as it distributes agricultural

supplies needed in plantation/farming. Mindanao is largely agri-based. It also
belongs to the bank’s priority industries.

Requirements:

1. Name two types of credit available to the company for its financial needs.

Open credit and long term loan

2. Discuss how credit was used in business to stimulate production in the economy.
Specify the basic function used on following:

A. Credit as medium of exchange- medium exchange involves when buyers and

 sellers agree to its common value. The case stated that the company’s major
clients include Del Monte Philippines and Dole Philippines. Large and small
fruit vegetable growers, traders, assemblers and processors are also among
their customers and have continued patronage to this date. I think being able
to have customer loyalty will stimulate the production in the economy.

B. Credit as available capital - improved capital goods is intended to increase

labor productivity by making companies more productive and efficient. As labor
becomes more efficient, this increased efficiency nationwide leads to economic
growth for the entire country and a higher nationwide GDP

C. Credit on selling goods – it is a revenue earned by a company when it sells

goods and allows the buyer to pay later. Consumer debt begins to
negatively affect the health of the economy when it forces consumers to spend
less. Therefore, some governments do everything they can to
encourage consumer spending (and borrowing), including lowering taxes and
lowering interest rates.

3. Discuss how the business invokes independence to consumers

Social response theory states that individuals have a tendency respond to social
influences in different ways, like in normative way. Consumer independence is as an
enduring consumer tendency to respond to social influences pertaining to product
and brand choices and uses by giving minimal weight to the prescribed norms
of consumer reference groups adhering instead to personal preferences and tastes.
Think about what would happen if everyone stopped spending. Businesses would
eventually go bankrupt and lay off workers. The government would then have no one
to tax. So, the consumers are one of the important factor to boost our economy.