This research will examine the concept of shadow economy, a global phenomenon that can be observed in our society, and will focus on its effects on the condition of the groups involved and to determine its reality in the community of the city of Baguio. While there is confusion about the real definition of the shadow economy, about its connection with illegal transactions that operate "in the dark", it is important to underline that part of the shadow economy that is most appropriate to analyze, i.e. the type of business we can witness for the streets. I am referring to the part that denounces the situation of poverty and unemployment in the country, of those who earn an income and do not pay taxes to satisfy the physiological needs of their family on a daily basis. To understand the scope of the research, the big picture shows that it shares a large portion of the country's gross national product, which according to a report by the Congress of Trade Unions of the Philippines in 2000, was as high as 43.4%. As supported by statistics, it can be considered an interpretative factor ...