Communi-K 2nd and 3rd Quarter

ISSN 2243-8939

communi-k

VOL 12 NO 2

BUILDING ON

SOLID FOUNDATION

Kabalikat para sa Maunlad na Buhay Inc.

INSIDE

11 Mr. TLC

16 Understanding the poor

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23 Ano VAT-o?

INSIDE VOL. 12 NO. 2 ORGANIZATIONAL NEWS PG. 4 Three New Deputy Executive Directors Appointed PG. 4 Vision for 2020 Pushed PG. 5 MD2 Clients Bag Plum Prizes from the CMA PG. 5 KMBI Celebrates its 29 Years of Serving the Poor PG. 6 BM & BA Conferences and LEaD Camp 2015 held in Baguio PG. 6 First Life’s Top 3 Branches PG. 7 KMBI strengthens its Partnerships and Networking PG. 7 Intervention Workshop Held to Improve Org Dev PG. 8 Seminars on Disaster Preparedness Held PG. 8 BOT & Staff Attend Asia-Pacific Housing Forum PG. 9 Social Performance Task Force 2015 Annual Meeting PG. 9 KMBI New Corporate Uniform Implemented

NEWS BRIEF PG. 10 273 Couples Joined the Mass Wedding PG. 10 Relief Operations Conducted in Tuguegarao PG. 10 GOA and Manila Branch Inauguration

CHECK

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OUT PG

FEATURE STORY PG. 11 Mr. TLC (Rosunny Dela Luna’s Story)

LEADERS’ EDGE PG. 12 Building a Solid Foundation on Personal & Corporate Identity PG. 16 Understanding the Poor PG. 18 Pushing our Environmental & Social Agenda through Pure-It PG. 20 Long Term Investment

COVER STORY PG. 14 Driving Home the Lesson: Building on Solid Foundation

ENTREP 101 PG. 22 Ano VAT-o?

TIPS PG. 24 The 10 Golden Rules of Argument

MF INDEX PG. 26 Passage of the Microfinance NGO Act CHECK OUT PG. 24

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CHECK OUT PG. 18

CHECK OUT PG. 20

THE

PRESIDENT’S NOTE

The best is yet to come!

You would often hear me say this during seminars and conferences. This is because I am still at awe with how the Spirit works within us as we move along, out of our bitter past and create a promising future for KMBI. Our newest Communi-K is filled with important lessons from our LEaD Camp. I believe this will help us be grounded on the framework that will determine which directions to take. These learnings set the tempo as the Management plans the steps that KMBI will undertake in the next 5 years.

I am also pleased to announce the recent passage of Republic Act 10693, or the Microfinace NGO Act as this further validates that we are moving to the right direction. We are slowly being recognized by our legislators and government executives in the value we create for our clients as we give them financial access, values formation and business development services.

Please join me with the rest of KMBI’s stakeholders re-write history and rebuild a better and stronger KMBI. Masaya Dito sa KMBI!

EDUARDO C. JIMENEZ President and Vice Chairman, KMBI

EDITORIAL BOARD Margaret Rose N. Rodriguez Editor-In-Chief

John David I. Ulangca Graphics

John David I. Ulangca Managing Editor

For editorial contributions, suggestions and inquiries, please contact:

Atty. Raineer Chu Dawn Jandie Ulangca Margaret Rose Rodriguez Blesilda Visaya Eunice Tacastacas Contributors

IBAHAGI ANG INYONG MASAYA SA KMBI EXPERIENCE!

Hinihikayat din namin ang lahat ng empleyado, anuman ang posisyon...

Na magsumite ng kanilang Kabalikat para sa Maunlad kwento ayon sa kanilang karanasan sa KMBI na na Buhay, Inc. 12 San Francisco Street., may kalakip na picture at Karuhatan, Valenzuela City ipadala sa Inc. email: 3 Kabalikat para sa Maunlad na Buhay jiulangca@kmbi.org.ph

ORGANIZATIONAL NEWS

Three New Deputy Executive Directors Appointed

(Left to right) Mr. Rhany Barrera - Deputy Executive Director for Credit Operations Group, Ms. Madelyn Frijillano Deputy Excecutive Director for Management Services Group, Ms. Hazel Bayaca - Deputy Executive Director for Client Services Group

With the approved KMBI Organizational Structure 2015 – 2020, the Board of Trustees and Management announced the appointment of three Deputy Executive Directors last September 21, 2015. The following appointees are: Mr. Rhany P. Barrera – Deputy Executive Director for Credit Operations Group; Ms. Madelyn P. Frijillano – Deputy Executive Director for Management Services

Group (Finance and Accounting Dept., General Services Dept. and Human Capital Dept.) ; and Ms. Hazel Christine R. Bayaca – Deputy Executive Director for Client Services Group (Programs and Services Dept. and Research and Development Dept.). With the appointment of the three Deputy Executive Directors, it is expected that work processes will be further streamlined and become more

efficient.

Human Capital Department Director A. Edwin B. Aruelo shares, “We believe that our new organizational structure will strategically build our institutional competitiveness, as it shall facilitate our organizational growth through a well-defined leadership succession program, thereby increasing the effective delivery of our programs and services as a whole.”

Vision for 2020 Pushed The series of planning sessions for the institution’s five year plan called “Paghandom sa Damlag 2020” ended with its presentation at the La Breza Hotel, Quezon City last Nov 10-13, 2015.

It was followed by its approval by the Board 4

of Trustees on their last meeting for 2015.

The sessions provided the means and fashion on how KMBI can achieve and realize its corporate mission and objectives in the next five years.

Amongst the highlights

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were the: refinement of KMBI’s Mission, re-engineering of the organization’s core values and development of seven new strategic directions.

Full details was cascaded to Branch Staff last January during the General Assembly.

ORGANIZATIONAL NEWS

MD2 Clients bag plum prizes from the CMA

Ms. Maternidad Salili and Ms. Lydia Malot (Ninth and tenth from left) pose with board and staff during the meet and greet ceremony, at the KMBI Panay office last December 1, 2015.

Two Metro Davao2 clients garnered top prizes from Citi Microentrepreneurship Awards last December 2, 2015.

Public school teacher turned nata de coco manufacturer, Ms. Lydia Malot of Davao was awarded as the National Winner of 2015 Citi Micro Entrepreneurship Awards (CMA). Amongst her clientele are Dole and Del Monte Philippines as well as the famous juice drink from Thailand, Mogu Mogu.

The Mindanao Award went to Mrs. Maternidad Salili who engages in the production of metal coils for automobile companies and Coca Cola Corporation.

As the National Awardee, Lydia received a trophy and a cash prize of P200,000. As Mindanao Awardee, Maternidad received a trophy and a cash prize of P100,000.

Both awardees also received the following prizes: life and health

insurance coverage for one year, 1 laptop unit and a one-day computer training held last December 3, 2015. Next year, they will be enrolled in an entrepreneurship course at the Citi Microentrepreneurship Development Center (CMDC).The loan officers of the two clients received P10,000 each, while KMBI’s Metro Davao2 branch received a cash incentive of P20,000 for the two entries. In addition, KMBI was awarded a plaque of recognition.

KMBI Celebrates its 29 Years of Serving the Poor

The organization celebrated its 29th anniversary last Oct 30, 2015, nationwide. Coinciding the festivities at the KMBI Panay Office is the inauguration of the Panay Office 2, dedication of the Executive Office & Board Room to Mr. Ricardo Jumawan and the late Mr. Aurelio Llenado Jr., respectively Kabalikat para sa Maunlad na Buhay Inc.

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ORGANIZATIONAL NEWS ORGANIZATIONAL NEWS

BM & BA Conferences and LEaD Camp 2015 held in Baguio City

Around 643 delegates participated in the Last Lead Camp held at the CAP Convention Center situated inside the Camp John Hay grounds, Baguio City .

The BM and BA Conferences together with the LEaD Camp were mounted back to back from September 14-18, 2015 at the Azalea Hotel and Camp John Hay

grounds in Baguio City, respectively.

“Building on Solid Foundation” became the underlying theme for all conferences that

encouraged KMBI staff to revisit and strengthen their knowledge in work procedures, improve personal relationships and be spiritually refreshed.

First Life’s TOP 3 Branches

(from left) Goa Branch Manager, Victor Palce raises their trophy as First Life’s Best Performing branch. David Glenn Laggui (BM-Tuguegarao) and Leo Libanan (BM- San fernando) receive cash awards on behalf of their branches.

Three KMBI Branches were hailed as First Life’s top performers in the recently concluded LEaD Camp 2015.

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First place went to Goa Branch, second place to Tuguegarao Branch and San Fernando Branch garnered the third spot.

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The basis of the award was collected premiums vs. claims. Awardees were all given cash gifts and the top earner received a Plaque.

KMBI strengthens its Partnerships and Networking

Intervention Workshop Held to Improve Organizational Development To assess and improve organizational development, the Board of Trustees, Management Committee and selected staff attended a 3-day intervention workshop last July 1-3, 2015 at the La Breza Hotel, Quezon City.

(Left to right) Mr. Jon San Gabriel of First Life Financial, Inc., Mr. David Dizon of Charter Ping-An, Ms. Michelle Bacolod freelance MI consultant and Mr. Caleb Jimenez of Pinoy Ako Insurance Services

The institution has steadily been building up its partnerships with industry leaders and like-minded institutions like Unilever, Charter Ping An and Pinoy Ako Insurance Services.

This string of new partners pave the way for a more opportunities and improved product

offerings given by KMBI. The Client Services Group has been actively tapping other companies that can provide add on value services to clients. The new partners were introduced during the Christmas Wellness Caravan held last December 4, 2015 in Quezon City.

Congressman Nava of APPEND Partylist extends his gratitude to KMBI Board and Management in the light of the passage of RA Bill 10693 or “Microfinance NGO Act” last Nov 3, 2015. Please refer to page 27 for more information about the new law.

The workshop was facilitated by Ms. Mila Bunker and Lalaine Joyas, respected microfinance educators and practitioners. Both are esteemed members of the Microfinance Council of the Philippines, with deep and extensive microfinance experience.

“I am happy to have the opportunity to attend this type of workshop.

It made me realize how complex it is to make a loan product since there are a lot of considerations before the roll-out.” Jeric Encinas, Program Assistant from Daet, shares his learning experience.

Staff and clients can expect better programs and procedures in the months to come, as the organization moves forward to 1KMBI.

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ORGANIZATIONAL NEWS

Seminars on Disaster Preparedness Held plan of the MMDA in the event of the Big One hitting the metropolis.

MMDA Action Officer David Viola discusses how earthquakes start and what preventive measures can be done before “The Big One� comes.

The Administration Department conducted a Fire Safety and Crisis Management Seminar last April 10, 2015, and a seminar on Earthquake Safety last August 25, 2015 at the KMBI Head Office in Valenzuela.

The talks were mounted through the help of SNS Security Services and

members of the Metro Manila Development Authority. The speakers focused on the legal and practical bases connected with the occurrence of fire and earthquakes.

Both seminars were informative and practical as they touched on fire prevention, safety guidelines and the master

Similar talks on fire safety and prevention were also conducted in the different branches of KMBI nationwide. The talks are also measures to comply with the implementing rules and regulations for the issuance of the Fire Safety Inspection Certificate and subsequently various local permits to operate. The aim is to make the staff aware and prepared for such eventualities like fires and earthquakes thereby minimizing their effects on lives and properties.

BOT & Staff Attend the Asia-Pacific Housing Forum The KMBI delegation was composed of (right to left): Chairman and Vice President - Mr. David Gutierrez, Deputy Executive Director for Client Services Group - Ms. Hazel Bayaca, Deputy Executive Director for Credit Operations Group - Mr. Rhany Barrera, Corporate Secretary - Atty.

Romel Bagares and Luzon Regional ManagerMs. Rachelle Basiya

Key staff and two Board of Trustees attend the 5th Asia Pacific Housing Finance Forum organized by Habitat for Humanity last September 1-4, 2015 in Hong Kong.

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The conference brought together policy makers, realtors, builders, funders and other housing advocates to be able to address the gaps in

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socialized housing.

KMBI sees itself adding housing loans for clients as addition to their portfolio mix in the near future.

ORGANIZATIONAL NEWS

Social Performance Task Force 2015 Annual Meeting

KMBI representatives visit AMK Loan Officers and their clients in Cambodia as part of their exposure trip for the Social Performance Taskforce Annual Meeting

More than 250 participants from 51 countries attended the Social Performance Task Force Annual Meeting held in Siem Reap, Cambodia.

relates to and addresses operational challenges; how SPM creates safe and sound markets; and how SPM allows to understand our clients and evaluate social outcomes.

The four-day event discussed the Universal Standards for Social Performance Management (USSPM) and SPI4, a social audit tool aligned with the USSPM; prevention of over indebtedness; how SPM

Mr. Rhany P. Barera and Ms. Hazel Christine R. Bayaca participated in the various workshops, annual plenary sessions and field exposure trip at Angkor Mikroheranhvatho Kampuchea (AMK),

Cambodia’s largest microfinance institution.

The exposure trip was one of the highlights of the four-day event.

Learnings and insights gained from the event are seen to be most useful when the organization starts drafting its new plans and be able to draft policies using Social Performance Management lens.

KMBI rolled out the full implementation of its corporate uniform for all regular employees last October 12, 2015. Kindly refer to the pictures above for the prescribed uniform schedules.

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NEWS BRIEF

273 Couples joined the Mass Wedding

Relief Operations Conducted in Tuguegarao

16 of the 273 couples tied the knot last August 1, 2015 under KMBI’s Mass Wedding Rites, at Angono, Rizal

A total of 273 couples were married under KMBI’s Mass Wedding Program on the 3rd quarter of 2015.

For years, the organization has been facilitating communal weddings as part of its non-financial services to clients.

This endeavor has been gaining support from micro-credit clients, local government units and churches due to economic and financial reasons.

Such rites enable couples to get more opportunities: formal recognition and union of live-in couples, legitimization of their children, increased social benefits from the government and approval of claims of MI dependents.

A total of Php 900,000.00 has been invested for this endeavor.

Tuguegarao staff load up their relief goods for distribution

Tuguegarao Branch conducted its relief operations for Typhoon Lando victims last Oct 24, 2015.

KMBI staff delivered rice and ready-to-eat items to 33 centers situated in 7 municipalities. These included Tuguegarao, Iguig, Amulong, San Pablo, Cabagan, Piat, Enrile and Piat.

A total of Php102,000 was invested in this endeavor that benefitted 763 clients.

Goa and Manila Branches were inaugurated last Oct 16 and 23, 2015 respectively. Both Inauguration rites were graced

by Deputy Executive Director, Rhany Barrera and Regional Manager for Luzon Operations, Rachelle Basiya.

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FEATURE STORY

Mr. TLC Rosunny Dela Luna Story

By Margaret Rose N. Rodriguez

“He’s very competitive and responsible at work.” Rhany Barerra, Deputy Executive Director for Operations, said when asked about Mr. Rosunny Dela Luna.

But perhaps we already know this about him. Other than he’s really funny and full of antics. We also know that he takes time to talk to people. He asks what makes them tick. He unearths what their opinions are.

He listens to their stories. He takes an effort to connect and understand them.

And it is through this rapport that he has built through the years that has earned him the respect and privilege to be called “The Best BM of 2014”.

Our Branch Manager from Koronadal started his career in KMBI 10 years ago. He started as a Program Assistant in the same branch and got so good at his job that he became the best. He realized that there was a formula that produced a successful branch. He shares this as “TLC” which means Tenderness + Learning + Caring.

Tenderness would mean giving compliments and commendations in the big and little things, making his staff feel valued.

Learning is setting an environment where opinions and ideas can be freely expressed so that everyone can engage and learn from the “collective intellect” of everyone working in the branch.

Caring is the consistent monitoring of staff and provision of support most especially during times of difficulty. He lends his hand and gives advice to his staff to overcome their weaknesses.

“I instill in my staff what awaits for them for a job well done to inspire them in their work. I also share how our work helps us, how it gives joy to our family and fulfillment to the clients we administer our services to.” Rosunny shares.

Despite the challenges he is facing in his job, Rosunny is thankful for KMBI for all the blessings he has received. Since coming into KMBI, his relationship with God has grown and strengthened. He continues to try to be a good example and stand as an inspiration to his staff and colleagues alike.

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T

he beginning is the most important part of the work. When building structures, builders give so much time in planning and working on the foundation of that structure. Trust, respect and love are very important in building relationships with other people. Constructing a clear mission and vision are the first things done before founding an organization. But above all these, God, from the very beginning, is present and He is always involved in building families, communities, nations and organizations.

“Except the LORD build the house, they labour in vain that build it: except the LORD keep the city, the watchman waketh but in vain.” – Psalm 127 (KJV)

Important facts to remember: • Our God is involved in establishing foundation and in building. He is the ultimate architect and He is the chief cornerstone.

• God is an architect, builder, designer and also a destroyer. God will intentionally destroy some things that already exist in order for Him to build better.

• God is everlasting. He is forever. He is involved in our past, present and He will always be there in our future. God will always remain faithful to His word that He will never leave us nor forsake us in whatever situation we are in.

• Our God is not a god of fate. God Himself ordains. He is involved in the life of the organizations and of the people.

What should be done?

• Unity must be focused for God’s own glory. His glory cannot be shared nor given to anyone else. God wants His people to be united so His name would be glorified.

We must always be mindful and sensitive enough towards our current standing as

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LEADERS’ EDGE

BUILDING A SOLID FOUNDATION

ON PERSONAL & CORPORATE IDENTITY (Excerpt from ECJ’s talk on 2015 Lead Conference)

By Dawn Jandie Ulangca

•

•

•

a follower and believer of Christ because hell was not made for us but for Satan. We must choose not to join Satan but rather join Christ in heaven, for it is His heart’s desire.

If we want KMBI to be involved in the communities that we are serving, we must always think that our identity should be anchored unto someone who will outlast us. The triune God and His Word will remain forever.

Our identity should be anchored on God Himself and on the very scripture that was given to us. If we do not link ourselves to God and to His words, we will definitely fail.

God created us separately and distinctly. According to Howard Hendricks, there was no identity crisis in the person of Christ. He knew who He was, He knew where He was going, and He knew why He was here. God who gave us the identity must also know the calling of Christ on us. We must take time to pause, listen, reflect and move where God is calling us.

“Christ, the very foundation of where we are right now and even where KMBI is has risen from the dead. We should always remind ourselves that when we look at KMBI, we believe in the exclusive claims of Christ and the inclusiveness of his invitation for all to join Him and to become part of the Kingdom of God.” The split that happened in KMBI year 2014 is not God’s plan. He did not ordain this but He allowed this to happen for a purpose. Transition is hated by many but according to Michael Watkins, transitions are periods of opportunity, a chance to start afresh and look at what needs to be changed in the organization.

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“Every enterprise is composed of people with different skills and knowledge, doing different kinds of work. For that reason, it must be built on communication and on individual responsibility. Each member has to think through what he or she aims to accomplish - and make sure that associates know and understand that aim. Each has to think through what he or she owes to others - and make sure that others understand and approve. Each has to think what is needed from others - and make sure that others know what is expected of them.

- Peter Drucker Through this adage, Mr. Drucker summed up the duties and responsibilities of each member of a successful institution. In the context of KMBI, we are clear about our aims (our vision) and we make sure that everyone understands this when we declare everyday our mission and vision. But have we asked ourselves -- Are we consistent in what we say with our actions? When we say that we are a Christcentered development organization, do each of our decision reinforce our declaration that we embody the values of Christ? Or are we all talk?

The LEaD Camp that was held in Baguio last September encouraged us to go back to the basics. We are encouraged to look

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back and re-examine the basis of our motivations in our lives. On what values are we grounded upon? Is it built on solid foundation? Let us go back on the three fundamental truths on our corporate building blocks: 1. Build your solid foundation in Christ He is the Alpha and Omega. We should know that we should not rely on our individual gifts and talents. It is as fleeting as fortunes and friends. It is only through knowing, growing and communing with God and his word can we find constancy in a life full of changes. Let us shy away from traditions, opinions and momentary emotions found in our hearts. These are not good materials to build our faith

COVER STORY

Driving home the Lesson:

Building on Solid Foundation

By Margaret Rose N. Rodriguez Based on the concept paper of Mr. A. Edwin Aruelo

“Strong foundations are built from careful planning, deliberate action, and a lot of heart. It also takes time, patience, humility, authenticity, and nurturing”

from since we can easily be washed away through life’s storms.

2. Build your solid foundation aligned with our corporate identity Having a clear and compelling narrative that is communicated to everyone in the organization is crucial. Everyone must understand what we are doing, why we are doing it and where we are going. Being clear on what the organization stands for -- will help people re-align with the organization’s values. If communicated properly, we can transform people with diversified motivations to unite with us, as one organization, with one mind and one heart.

3. Build your solid foundation on healthy relationships Strong foundations are built from careful planning, deliberate action, and a lot of heart. It also takes time, patience, humility, authenticity, and nurturing. It thrives on give and take, of mutual respect and understanding. Only when we give the proper environment for growth will we begin to foster a sense of belongingness that will result to loyalty and productivity.

When we communicate these basic principles to our people and clients, we are sure to meet KMBI’s vision of 2020. This set of beliefs set the tone and atmosphere where people believe they can accomplish just about anything. Let’s continue to move on as 1KMBI!

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S

ince KMBI works for the poor, it is necessary for the people to have a solid understanding of who the poor are. Without such understanding, the work of KMBI may not be relevant to those being helped.

Different kinds of poor There are three levels of poor within the class of poor, these are: the upper poor, the middle poor and the lower poor or what most would call, the poorest of the poor.

Because of the nature of microfinance, KMBI can only reach the upper poor since it is required that a client be “credit worthy “ this means having an existing business. Very few of the middle poor have a business and most if not all the poorest of the poor have none.

Worldwide, in any given group or community, only 10% would need capital or would become entrepreneurs. 90% would need jobs .In the poorest of the poor, only 10% would ultimately become entrepreneurs. Those who borrow from microfinance or MFIs who are not entrepreneurs eventually close down or never get bigger. They borrow because they have no other option. In the Philippines, the best intervention for the poor is to provide jobs but the greatest evidence that there are no jobs in the country is the fact that 11 million Filipinos leave the country to find jobs overseas.

Using a rapid assessment technique, one can tell if a slum community is really poor or not simply by counting the number of shops or sari-sari stores. A community of 500 to a thousand homes should have a ratio of one shop to one hundred houses to qualify as poor. Shops or stores will survive only if there are customers or buyers and buyers can buy only if they have money and they have money only because they have jobs. If the community is really poor, stores won’t survive more than a year.

Meeting the poor where they are.

The best way to understand the poor is to live with them, go where they are and eat what they eat, become part of them. Our team once tried to sleep on the sidewalk of Cubao like the kids do, at night. It was a traumatic experience to say the least. I have also stayed in the house built under the bridge on the coastal road along Manila bay.

Whenever the vehicles cross over the bridge, we would be shaken in our sleep, because 16

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LEADERS’ EDGE

By Atty. Raineer Chu

UNDERSTANDING the Plenary of Atty. Reinier Chiu

Poor

our house was tied to the underbelly of the bridge, suspended over the water.

The poor seemed doomed to repeat the cycle of poverty. Why? The poor spends three times more for their water than most rich people or even middle class do. They have water delivered by tankers and they pay 30 pesos to fill up one drum full. One average size family usually consumed three drums. And these drums are often polluted or contaminated. So, the cost of the water is even made more expensive by the e-coli developed in the water, resulting in sickness. This is another reason for loan default.

Among the poor, anyone sick in the house becomes a liability of the entire family. When a child is sick, the parents sometimes cannot go to work also, in order to attend to the sick child. It is worse when the entire family gets infected, like say, with flu.

Most essential commodities like cooking oil are also more expensive because of the law of disposable income. If they could afford to buy one liter of cooking oil, their 50 pesos could buy the best cooking oil but since they can only buy 5 pesos at a time, they end up buying cheap cooking oil that easily evaporates which means it is two or three times more expensive compared to the best granola or coconut oil.

Some common fallacies or wrong beliefs about the poor‌.

Most people think the poor are lazy. This is so bad and so wrong. Laziness is not a monopoly of the poor.

That they are not lazy is shown by the fact that many of the poor who go abroad suddenly are working themselves to death with overtime and or having three or more jobs.

The poor are not out to get our money. In fact, it is the poor OFWs who helped our economy for decades now, remitting more than 21 billion US dollars annually. This is more than the combined contribution of the top ten Philippine corporations to our economy. The poor are not a liability, they are our greatest assets and they are also bankable. We know in KMBI that worldwide, in MFI records, that the poor are good payers and sometimes average 97% repayment.

To be continued .....

For the full article, please log on to http://www.kmbi.org.ph Kabalikat para sa Maunlad na Buhay Inc.

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hurdles in delivering it to the communities that need it most.

In 1980’s, people never thought of buying water in the future. It was in the late 90’s that people started getting sick from using the tap. This was due to the contaminated water distribution system in cities, as well as the population bloom that left a lot of the urban slums without access to potable water.

J

ust like clockwork, the delivery boy brings in three 5-gallon bottles of water from the local water station to our compound every Tuesday night. My neighbor pays 90 pesos to the man since each bottle costs P30. This roughly adds up to the total monthly bill of Php360 in our area, or more in other cities.

Why do we pay so much for water? Why haven’t we found more efficient and sustainable ways to have better access to it in a grandscale? While there are state-of-the-art filtration systems, cost and distribution seems to be the biggest 18

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Companies devised of a solution to keep water handy and accessible in the form of the PET (Poly Ethylene Terephthalate) bottle. This was introduced in replacement for glass bottles. The downside of this is the amount of trash produced since these are often disposed after a single use.

It is also a challenge for people living in remote islands. Water needs to be transported through boat from the mainland to the islands. This added cost eats up the daily budget of low income families that could have been better spent on education or quality food.

LEADERS’ EDGE With photo reference from: http://d.ibtimes.co.uk/

Pushing our Environmental & Social Agenda through

Pure-It

By Margaret Rose N. Rodriguez

As a microfinance firm with a holistic transformational agenda, it is in our best interest to keep our clients’ and families’ health in check. Illness among family members limits our client’s ability to work since they need to take care of their sick..

Missing work inhibits clients to earn, and this could further push them and their family in to poverty.

This is why KMBI partnered with likeminded industry partners like Unilever in an effort to address the environmental and social costs of the lack of access to cheap and safe potable water.

The Pure-It Filtration System, will now be accessible for KMBI clients as an add-on loanable item to their existing group loan availment this 2016. Units available are cheaper compared to those out in the market today. It currently undergoes pilot testing in Angeles Branch. Mabalacat is scheduled for piloting on February 2016..

Nationwide roll-out is scheduled for the 3rd quarter of 2016.

You may find out more about the product using this link: http://www.pureitwater.com/PH/ For staff interested in availing the product, contact FHG Coop : http://forhisglorympc.com/contact-us/ or 0922-891-8110 (Jasper)

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LONG-TERM INVESTMENT Start Today (Long-Term Investment)

By John David I. Ulangca

D

o we have a firm understanding of saving and investing? Is savings something that is left after you buy all your needs and wants? Or is saving something you shave off from your monthly expenditures to “pool”? Do you keep your money in the bank, sleeping? Or do you put it elsewhere so it can grow? Note that there is a big difference between “Saving” and “Investing”.

SAVINGS • Savings is the portion of income not spent on current expenditures • Saving money is KEEPING money for a sole purpose • Money saved to pay for unexpected events or emergencies • Money is slow to grow.

LONG-TERM INVESTMENT • An account on the asset side of a company’s balance sheet that represents the investments that a company intends to hold for more than a year. They may include stocks, bonds, unit investment trust funds, real estate and cash • Has a high potential of gaining great amount if invested in the right way. But also contains minimal risk of loss.

A good example of a long-term investment is the stock market. Let me focus on this since people have negative thoughts about buying stocks because of what they heard from other people’s experiences.

Let’s keep it simple. There are two strategies in stock market: Short-term trading (high risk trading) is where you will buy stocks for a short period of time.

High risk means you have a high potential of losing or earning high interest on a short period.

Long-term strategy (low risk trading) gives us a sure capital growth but it will take a long period of time in about 10, 20 years or more, the longer the better. This type of trading style is most of investors and brokers recommends. It is buying stocks to the company that has excellent reputation in the business world. Top 10 most successful businessmen in the Philippines also invest in stock market. Why? Because they know the potential income in this type of investment if they invest in long-term.

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LEADERS’ EDGE

We might say, “In my case my income is small. I can’t afford investing” .

Investing does not require big chunk of money. Some stock brokerage company offers a minimum amount of Php 5,000.00 and you may add buying stocks anytime you want.

Example you dedicate 1,000 peso apart from your savings for investing a month on buying stocks. Some will say. “I still can’t afford that amount monthly” . Imagine in a day if you can buy unnecessary things like junk food, softdrinks and other things you buy in an everyday basis. Get the sum and see where you can squeeze the budget.

EXAMPLE Softdrinks – Php 12 Junkfood – Php 15 Load – Php 10 Fastfood – Php 50 Total = Php 87 pesos per day

Php 87.00 daily is equivalent to Php 2,610.00 a month or 31,320.00 a year, and Php 626,400.00 in 20 years without noticing. Can you imagine the potential income of this if we invest it in the right way?

Long-term investments are not easy. It requires studying, self-control, discipline and determination in able to fulfill the goal we are aiming. We must be open-minded and ready if we decide to invest.

Most investment planners recommend saving up to 6 months of your salary for emergencies. On top of this, we can spend for investing. Francisco Colayco coins the term “investing” as our expenditure for our future. We need to invest to sustain our forthcoming plans. Let’s remember that money deflates value, so we just can’t leave it in the bank. Let’s start investing now, so we can take advantage of the time we have, and have a brighter future.

With photo reference from: http://blog.tenderpreneur.net/wp-content/uploads/2015/10/Investment-Medium.jpg

Kabalikat para sa Maunlad na Buhay Inc.

21

ENTREP 101

Ano

-o?

By Eunice Gale Tacastacas

What is VAT or Value Added Tax? It is a tax imposed on each sale of goods or service in the course of trade or business. This is an indirect tax, which is ultimately passed on to buyers or endconsumers. Under Republic Act No 9337, the law governing VAT imposition, 12% VAT is imposed on transactions with an annual gross sales and gross receipts amounting to Php 1,919,500.00 or more in the course of trade or business.

Input VAT from all our purchases so that we could deduct it from our Output VAT. Not all receipts can be withheld Input VAT. We can only recognize Input VAT from receipts issued by a VAT-registered supplier with valid invoicing requirements. The receipt shall include the Name, Address, TIN and VAT-registration number of the supplier. It should also include the Name and TIN of the payee and the breakdown of vatable sales plus VAT amount. Please see example below.

Since KMBI is engaged in microfinance service and our annual gross sales and receipts exceeds Php1,919,500,00, we are considered a VAT registered entity. Because of this, we are expected to withhold Input VAT from all our VAT-registered suppliers and recognize Output VAT for all income received. The net effect of these two is called VAT Due and Payable to BIR. To wit: TOTAL GROSS INCOME (month) 33,214,523.80 Multiply by: 12% Output VAT 12% OUTPUT VAT 3,985,742.86 Less: Input VAT 748,101.03 VAT DUE AND PAYABLE TO BIR 3,237,641.83

This illustration is an actual data from our September 2015 financials. See how much we are paying to BIR every month! That is why, it is very important that we recognize

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Sales  Break Down

Please remember that the sales breakdown is important. If you received a receipt without the sales breakdown, please kindly return it to the supplier right away for them to complete the invoice requirement. The issuer of the receipt is the only allowed person to make changes/ additions to the receipt.

We do not recognize input vat on computerized tape receipt issued by most suppliers like fast-food chains and groceries unless their tape receipt includes the name and TIN of the payee that is not handwritten. These are not considered valid receipts to claim input VAT. What if the issued receipt is NON-VAT? As said earlier, only VAT-registered receipts are valid to claim input VAT. So it is advised that we prioritize suppliers who are VAT-registered and issues a valid official receipt so we could deduct the Input VAT from our Output VAT, thus less VAT Payable to BIR. While it is encouraged to patronize suppliers who are VAT-registered, it doesn’t prohibit us to purchase from NonVAT suppliers, especially in areas where limited establishments are vatable. The only thing is, we could not claim input VAT from it. As a help to the organization, we are advised to claim more input VAT as much as possible.

What’s the latest update on VAT? Last November 3, 2015, President Benigno Aquino III approved Republic Act No. 10693 which is an act strengthening Non Government Organizations (NGO’s) engaged in Microfinance Operations for the poor also known as “Microfinance NGO’s Act”. Under Section 20 of this Act, it says that – A duly registered and accredited Microfinance NGO shall pay a two percent (2%) tax based on its gross receipts from microfinance operations in lieu of all national taxes. And this includes VAT! This, however, does not automatically apply to KMBI because a Microfinance NGO shall be required to obtain one (1) year accreditation from the Council as a condition for the availment of the incentives under this Act as stated in Section 10. This Act shall take effect fifteen days (15) days after its publication in any newspaper of general circulation.

Whoa! This is good news, right!? Hopefully by early next year, we would not worry about getting a manual receipt and spend much time liquidating our expenses by computing for input vat. And more importantly, we will not pass the VAT to our clients anymore! Moreover, since this Act has not been in full implementation, we will continue to comply as VATregistered entity until Dec 18, 2015.

Kabalikat para sa Maunlad na Buhay Inc.

23

TIPS

The

10 Golden Rules of

ARGUMENT

A

rguments are tricky. We spend a lot of our time trying to persuade others. We think that if we show them the facts that we have they will, logically, reach the same conclusions we did. Unfortunately that’s not how it works.

When is the last time someone changed your mind this way?

In his book, How to Argue, Jonathan Herring outlines positive ways of understanding and looking at arguments.

They needn’t be about shouting or imposing your will on someone. A good argument shouldn’t involve screaming, squabbling or fistfights, even though too often it does. Shouting matches are rarely beneficial to anyone.

We should treat the ability to argue as a skill that needs to be practiced and developed.

Arguments, and for that matter discussions, should be about seeing things through the other person’s eyes. They should lead to a better understanding of another person’s view.

With that in mind, here are what Herring calls the Ten Golden Rules of Argument.

1. Be prepared Make sure you know the essential points you want to make. Research the facts you need to convince your opponent.

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Also, Herring advises: “Before starting an argument think carefully about what it is you are arguing about and what it is you want. This may sound obvious. But it’s critically important. What do you really want from this argument? Do you want the other person to just understand your point of view? Or are you seeking a tangible result? If it’s a tangible result, you must ask yourself whether this result you have in mind is realistic and whether it’s obtainable. If it’s not realistic or obtainable, then a verbal battle might damage a valuable relationship.”

2. When to argue, when to walk away I’m sure you’ve had an argument before and later felt that it was the wrong time and place. “Knowing when to enter into an argument and when not to is a vital skill.”

Think carefully before you start to argue: is this the time; is this the place?

3. What you say and how you say it Spend time thinking about how to present your argument. Body language, choice of words and manner of speaking all affect how your argument will come across.

One clever thing to do here, that shows you’ve done the work, is to address the arguments against your position before they arise.

4. Listen and listen again Listen carefully to what the other person is saying. Watch their body language, listen for the meaning behind their words.

As a general rule, Herring writes, “you should spend more time listening than talking. Aim for listening for 75 percent of the conversation and giving your own arguments 25 percent.” And listening doesn’t mean that you’re thinking about what you’re going to say next.

5. Excel at responding to arguments Think carefully about what arguments the other person will listen to. What are their preconceptions? Which kinds of arguments do they find convincing.

There are three main ways to respond to an argument: 1) challenge the facts the other person is using; 2) challenge the conclusions they draw from those facts; and 3) accept the point, but argue the weighting of that point (i.e., other points should be considered above this one.)

6. Watch out for crafty tricks Arguments are not always as good as they first appear. Be wary of your opponent’s use of statistics. Keep alert for distraction techniques such as personal attacks and red herrings. Look out for concealed questions and false choices.

7. Develop the skills of arguing in public Keep it simple and clear. Be brief and don’t rush.

8. Be able to argue in writing Always choose clarity over pomposity.

Be short, sharp, and to the point, using language that is easily understood.

9. Be great at resolving deadlock Be creative in finding ways out of an argument that’s going nowhere. Is it time to look at the issue from another angle?

Are there ways of putting pressure on so that the other person has to agree with you? Is a compromise possible?

10. Maintain relationships This is absolutely key. What do you want from this argument? Humiliating, embarrassing or aggravating your opponent might make you feel good at the time, but you might have many lonely days to rue your mistake. Find a result that works for both of you. You need to move forward. Then you will be able to argue another day.

Another approach to end arguments is to simply ask the other person to explain their thinking.

How to Argue goes on to explore putting the rules into practice in particular situations where arguments arise.

Article acquired from: http://time.com/4078194/argument-advice/

Kabalikat para sa Maunlad na Buhay Inc.

25

MF INDEX

The Passage of the

Microfinance NGO Act

By Blesilda Visaya November 3, 2015 was a significant date for microfinance institutions as the Malacañang approved Republic Act No. 10693, also known as the Microfinance NGOs Act. This bill was sponsored by Senator Bam Aquino & APPEND Partylist.

It aims to strengthen non-government organizations like ours who are providing financial and non-financial services to the poor engaged in microenterprises.

The passage of this bill also recognizes the valuable contribution of MFI NGOs in the efforts to bridge the gap left by the government in poverty alleviation and holistic transformation. Services provided

by MFI NGOs are not limited to providing loans, unlike their for-profit counterparts, since they to provide values formation, training programs and seminars to enhance the values, skills and financial literacy of clients.

The Bill defines the Basic Features and Purpose of Microfinance NGOS: Provides the poor direct access to reasonable and affordable credit and related programs and services which shall include, but shall not be limited to: microfinance, microinsurance, microenterprise development, health care, and micro housing, subject to existing laws and regulations; With reference from:

•

Collects compulsary savings or CBU only from its clients for purposes of maintaining the compensating balance in relation to the same client’s loan. Acceptance of client savings for this purpose shall not cause the Microfinance NGO to be deemed engaged in deposit-taking operations; Total CBU should not exceed loan portfolio.

Additional points include: •

The Securities and Exchange Commission (SEC) is tasked to be the lead proponent for putting up a Microfinance NGO Regulatory Council, which will be tasked to accredit and monitor civic groups who wish to avail of the perks and incentives given by the draft law.

•

The council shall be made up of four government representatives from the SEC and the Trade, Finance, and Social Work departments, and three from the NGO sector.

•

NGOs will only pay a 2% tax on their gross receipts in lieu of all national taxes for their microfinance-related

•

http://www.mindanaodailynews.com/senate-seeks-to-strengthen-microfinance-ngos/ http://www.gov.ph/2015/11/03/republic-act-no-10693/

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13th MONTH

By John David I. Ulangca

COMICS & SUDOKU

SUDOKU (Answer sheet from back page)

Kabalikat para sa Maunlad na Buhay Inc.

27

Organizational Performance Indicators

As of October 31, 2015

Our Vision

Efficiency

Loan Activity

Cost per unit Lent

.17

Client Outreach

131,132

Cost per Loan Made

Php 1,479.9

Loan Portfolio

873.7M

Financial Self-Sufficiency

127%

Value of Loans Made

Php 1.7B

Operational Self-Sufficiency 130%

Portfolio-at-Risk

Php 54.9M

Ave. No. of Client per PA

PA- 246

MF-Operations

601

No. of Loans Made

173,179

Support Group

179

Number of Staff

TOP 10 PERFORMING BRANCHES As of September 2015

1. Tuguegarao 2. Santiago 3. Koronadal 4. Digos 5. Baliuag 6. Angono 7.

Tandang Sora 8.

Metro Davao 1 9.

Cebu North 10. Antipolo

SUDOKU (Answer at the back)

“To see people in communities live in abundance with strenghtened faith in God and in right relationship with their fellowman and the rest of creation”

Our Mission “KMBI is a Christcentered development organization existing to help transform the lives of its clients by providing sustainable microfinance, training, and demanddriven non-financial services.”

Core Values Respect Integrity Stewardship Commitment to the poor Discipline Innovation Excellence

12 San Francisco Street Karuhatan, Valenzuela City Tel (02) 291.1484 to 86 Fax (02) 292.1441 www.kmbi.org.ph 28

Communi-K vol. 12 no. 2