BUKIDNON STATE UNIVERSITY

Malaybalay City, Bukidnon, 8700

www.buksu.edu.ph

COLLEGE OF ARTS AND SCIENCES

An Assessment on the effects of Crime rate to Investments in Banisilan

ECON 136A

4:30-6pm M,Th

Prepared by:

Jayson y. Lopez

Carlo L. Villote
 Chapter 1

Introduction

Several years ago, people trusted their neighbors but nowadays, none is frustable because any

one can be a criminal can be a suspect. Crime has being been increasing in the Philippine

recently. The Public's fear. of crime is a major concern for policymakers, more so if it involves a

marked and Sudden increase of violent and property crime. As a new administration took over

the country of the Philippines after the recent 2022 election, solution of a problem lead to

another problem. most of the victims are women and children, mostly were kidnapped during

night time, raped and molested. The Philippine people are worried for their own safety. When

it comes to crimes here in the country because of the growing threat spread by people with bad

intentions, also because the country being infested with tremendous amount of dangerous and

mischievous criminals. On the other hand local investments are growing despite the crime rates

that the plant country faced. Local small businesses help create the color, culture and

uniqueness in our communities and neighborhoods. Many business man/woman choose to live

invest and make money.

According to Kusuma, H. (2019) crime rate will indirectly reduce the quality of economic

growth. The crime is not only limited to criminals. such as theft or fraud, but also economic

crimes such as corruption. Corruption economically weaken the system of production,

distribution, marketing quality of products produced the negative impact of an increase in the

number of crimes against economic growth in an area is the increase the variable costs of

production produced. Increased costs, will have an impact on the value of selling price of gods
or services produced so that the impact on the amount of goods sold and will reduce the value

of Gross Domestic Product. Therefore people nowadays choose brightness despite any of this

crime happening in the country. They strive to make a profit. people believe that investing,

what is comfortable is rarely profitable.

Objective of the study

a. Determine the relationship between Crime rate and investment in Banisilan.

b. Assess the effects of crime rate on local investments in the research locale.

C. Provide Fore cast on the impact of crime rate on local investments in Banisilan.

Statement of the Problem

The goal of this study is to find out the impact of crime rate to the local investment. The study

tried to answer the following critical question on in order to gather all the necessary

knowledge, data and information:

a. What is the relationship between crime rate and local investment in Banisilan?

b. What is the effect of crime rate on local investment in the research locale?

c. Provide forecast on the impact of crime rate on local investment in Banisilan?

Significance of the Study.

The findings of this study will be benefit to PNP It will help PNP enforce the law, prevent and

control crimes maintain peace and order and ensure public safety and internal security with the

active support of community. And It provides key issues that needs to be considered &

including the approach. fake available methods some key analytical issues and the

presentation of results. To the government studying about crime rates will help them to deliver

fair justice for all. They can protect the innocent, convicting criminals and providing a fair justice

process to help keep order across the county.while studying local investment. It will help them

to increase investment which means increase also of the current levels of gross Domestic

product, because physical capital is itself practiced and sold.

To the people this will help you to realize how investment can be a big help, you can stay

ahead of inflation and you can achieve your other financial goal. and studying crime-rates will

help you to be aware of your environment and your movement. to the businesman it will help

them to overcome financial Obstacles to develop and grow as a business.

Conceptual Framework

CRIME RATE LOCAL INVESTMENT

Theoretical framework.

Investment is defined as the savings in physical capital that allows people to increase their

wealth and future consumption and which is undertaken by people and not by the government.

Investment in a country is not only the result of mac-roeconomic variables. On the contrary,

investment and, particularly, private investment are affected by individuals’ behavior and

forecasting of a country’s performance and the likelihood of obtaining profits( Gomez , 2012).

Private investment is affected by other variables such as personal feelings or intuitions (Keynes,

1936, p.58). It is different from public investment, which, in theory, seeks social benefits for its

citizens and political profits of its decision makers. Crime, although it may also affect society as

a whole, is generally perceived as the result of a combination of individual and social

perspectives. Even without having been a victim of crime, an individual may perceive crime

through his/her acquaintances’ experiences or the social knowledge with regard to criminal

activities in the country or area.Acevedo and Mora (2008) found a direct relationship between

real gDp per capita and the government share of real gDp, on the one hand, and the rate of

private investment, on the other. They estimated a regression model with panel data for

twenty Latin American countries from 1995 to 2003. Not only is the rate of private investment

affected by gDp per capita and the government’s share of gDp, but also by its lagged value.

Therefore, private investment derives from an autoregressive process, so past values affect

current values.

Chapter 2

Review of Related Literature

 This chapter presents the related literature and studies after the thorough and in-

depthsearch done by the researchers. This will also present the synthesis, theoretical

and conceptual framework to fully understand the research to be done and lastly the

definition of terms for better comprehension of the study.

Related Literature

In recent years, many authors have studied the relationship between crime, as a rate

and an index, and economic variables. The social framework behind the concept of crime could

be a possible motivation for these kinds of studies. The literature on this topic is ample and has

several different presentations. Starting with Becker's (1968) seminal paper on crime and

punishment, economists have been incorporating the analysis of crime, criminal behavior, and

economic out-comes to mainstream economic literature. So far, two branches of this literature

have been developed. One examines the determinants of crime and the other studies its social

consequences.Increased regulation by governmental and regulatory entities has placed many

individuals and businesses at risk of being charged with “Business Crimes” or “White Collar

Crimes”. These crimes include money laundering, bank fraud, mail fraud, health care fraud,

bribery, embezzlement, forgery, insider trading, antitrust violations and racketeering. The

punishment for violating business crimes can be extremely harsh, both in terms of

imprisonment and financial forfeitures. Many times, those charged with business crimes are

hardworking business executives whose only mistake is having failed to comply with

complicated governmental regulations or are businesses at the mercy of a disgruntled

whistleblowing employee whose agenda is financial gain at the expense of the business. The

defense of those charged with such crimes is complicated and should always be handled by

attorneys experienced in the defense of business related

crimes(Peterbaugh,2022).Understanding consumers’ sensitivity to local crime is crucial for

businesses, city planners and policy makers. The importance of customers for a business’s

success is self-evident. By attracting more customers, businesses secure revenue and increase

the likelihood of survival. In recent times, the presence of thriving small local businesses like

coffee shops, grocery stores and bars has emerged as a symbol of neighborhood development

and gentrification (Papachristos, Smith, Scherer, Fugiero, 2011, Glaeser, Kim, Luca, 2018).

On the contrary, Hipp et al. (2019) report that higher prevalence of violent and property crimes

are significantly associated with both business failure and relocation. Lens and Meltzer (2016)

find that neighborhood crime reduces commercial property values, used as proxy for economic

activity. Rozo (2018) studies abrupt reductions in violence driven by government’s expenditures

in security and finds that when firms face higher violence their output prices fall more than the

prices of inputs. This drives firms to reduce production, and eventually some firms exit the

market.

At this stage there is not a clear consensus on the effect of crime on business activities and

most of the empirical results in the literature still lack causal interpretations. Furthermore,

most likely owing to the dearth of detailed data, much less attention has been devoted to the

consequences of crime on the demand side of business activities. This study begins to fill this

gap. To the best of our knowledge, we provide the first empirical evidence of how routine

consumer activities are affected by local crime.

 According to Pereza et. Al.(2017) local economic perceptions could encourage criminal

behavior, while local high crime could affect individuals' will ingness to invest in the area. Even

in cases where researchers find no evidence of a relationship between crime rates and

economic conditions, their recommendations still emphasize the importance of programs that

enhance public safety. For instance, Krisberg, Guz-mán and Vuong (2009) found no evidence of

a relationship between economic downturns and crime rates. However, they recommend

investing in effective com-munity based programs in order to improve the economy and stop

the growth of crime rates. Their analysis also supports the idea that using only crime rates to

account for crime would limit the actual analysis behind this relationship. the World Bank (2006

and 2007) finds a strong negative effect of crime on growth, even after controlling for human

capital accumulation and income inequality. We present what we believe is a novel approach,

using a country-specific index that accounts for crime levels in each economy.In our review of

the literature we found no studies of South America as a region. There are, however, studies on

Latin America as a whole (Di Tella, et al., 2012). This is, perhaps, because the latter is a larger

economic region. But given the closeness in terms of economic, geographic, social, cultural and

political con-nections among the countries of South America, this part of the Latin American

subcontinent deserves a study that specifically focuses on it.

 According to Lloyd and Marceau (2013) use an equilibrium model in a dynamic setting

that links insecurity, credit market imperfections and economic development. They highlight

the importance of improving security to increase investment and emphasize how the degree of

insecurity perceived by investors is the result of many factors, such as corrupt officials, the

crime rate, rent seekers, the number of individuals who prefer to undertake illegal and, as

Bhagwati (2018) alleged, directly unproductive profit-seeking activities. Others, such as

Rosenfeld (2009), find a relationship between crime, measured by the homicide rate and

acquisitive crime, and regional economic conditions. Rosenfeld studies four regions of the

United States using a data panel model with fixed effects, and finds that there is 2 One of the

difficulties of working with crime rates in Latin America is the differences in the measurement

of crime across countries. Even after accounting for population, the gross numbers would be

counting different measures from different countries (Di Tella, et al., 2012). Institutional

differences in recording crime, as well as differences in the way they are reported and the

efficiency of public security agencies, make the straight crime rates harder to compare across

these countries.
 According to Goulas and Zervoyianni, (2013) The security for investments made by

both domestic and foreign investors plays an important part in increasing economic

growth. there is an asymmetric relationship between increasing numbers of criminals

and economic growth. Similarly, Peri, 2004 using panel data at the provincial level in

Italy between 1951-1999 found that crime having a significant effect on the decline in

per capita income and a decrease in the growth of the labor force. In addition, The crime

rate will indirectly reduce the quality of economic growth. The crime is not only limited

to criminal crimes such as theft, or fraud, but also economic crimes such as corruption.

Corruption economically weaken the system of production, distribution, marketing,

quality of products produced. The negative impact of an increase in the number of

crimes against economic growth in an area is the increase in the variable costs of

production produced. Increased costs, will have an impact on the value of the selling

price of goods or services produced so that the impact on the amount of goods sold and

will reduce the value of Gross Domestic Product (GDP).

Locals have been found to make up a disproportionate percentage of trading as evidenced by

the reduction in trading volume for local stocks around blackouts for local shareholders (Shive

2012). States invest in their infrastructure to create efficient marketplaces and vibrant, dynamic

communities. States with relatively high tax rates can have better economic outcomes than

states with lower tax rates if the revenue is used to support productive public

investments(2017)
 On the other hand , Investment in highways, roads, seaports, airports, and other

transportation infrastructure underlies the economy of a region, determining the flow of goods

and services as well as labor. The economic benefits of infrastructure investments are widely

touted, but not all investments deliver gains equally. Some projects may pit various

communities within a state against each other or generate advantages for a neighboring state.

Such spillover effects can undermine local support for projects that have national and

interregional benefits if the projects are primarily paid for with local, public funds. One solution

could be regional agency buy-in and payments or primary funding from a higher level of

government.

As well as Firms consistently identify transportation infrastructure, utility infrastructure, and

higher education resources as important factors in their location decisions. Investing in those

areas can help state governments provide a better environment for businesses to reliably

access markets and obtain inputs, including labor, leading to economic growth and creating a

vibrant community for residents.

Therefore, Crime and violence have been affecting South American countries’ attractive-ness to

private investment (internal and external). Regardless of each country’s political tendency, the

problem with respect to security and violence is real, a daily reality for individuals living in those

countries. The level of crime is high, so that if it has not yet touched a person, the likelihood is

that it will touch him/her someday.

 Chapter 3

Methodology

This chapter decribes the research design, research locale participants of the study sampling

techniques, research instrument, scoring procedure. The researcher uses the rates of

quantitative correlational data gathered through crime and investment from the PNP-

Philippines national pulis of Banisilan and LGU- Local government unit of Banisilan.

Research Design

This research study was quantitative in nature and used correlation design which concentrated

on the rate and relationship of crime and investment in the municipality of Banisilan, this

research design. was able to provide simple and easy summary of results obtained from this

research study.

Research Locale

The study will be conducted in Banisilan is a highly diversified region in the

Philippines' resource-rich island of Mindanao. It is a highly diversified region that

enjoys quality living and sustained economic growth. Municipality of Banisilan will be

found in Region 12 also called SOCKSARGEN region.Soccsksargen (officially stylized in all caps;

[2] locally [sokˈsardʒɛn]), formerly known as Central Mindanao, is an administrative region of

the Philippines, designated as Region XII. Located in south-central Mindanao, its name is an

acronym that stands for the region's four provinces and one highly urbanized city (South

Cotabato, Cotabato, Sultan Kudarat, Sarangani and General Santos). The regional center is in

Koronadal, located in the province of South Cotabato, and the center of commerce and industry

is General Santos, which is the most populous city in the region. Municipality of banisilan is

located at the northern quadrant of Cotabato Province bounded on the north by the

municipality of Wao, Lanao del Sur, on the east to north-east by the municipality of Carmen and

Bukidnon, on the west by Alamada, on the south by the municipality of Pikit. Officially the

Municipality of Banisilan is a 2nd class municipality in the province of Cotabato, Philippines.

According to the 2020 census, it has a population of 46,995 people. 

Data Source

This study will use secondary data from the Philippine national pulis and Local Government

Unit of Banisilan. and a tearly report of crime-rate from PNP Banisilan in the lost 10 years

(2012-2021) and the list of local investment from the office of Banisilan Local Government unit

also for the last 10 years (CAR-2021).

Research Instrument

The researcher used percentaged sampling to get the exact of rate of crime and local

investment in the municipality of Banisilan and also we used T-table to identify the relationship

of crime rate to the local investment of the said municipality.

YEAR CRIME RATE No. of Regester business's

2011 13%

2012 8%

2013 41%

2014 4%

2015 6%

2016 61%

2017 73%

2018 59%

2019 63%

2020 33%

2021 16%
e