The
Chamber
Volume I Issue 4 • 2018 OCT - DEC
The Official Newsletter of Ormoc City Chamber of Commerce and Industry, Inc.
The future of franchising in Ormoc looks… ‘shining, shimmering, splendid’ Yes. You read it right. The future of franchising in Ormoc looks “shining, shimmering, splendid”, to borrow Aladdin’s “A Whole New World” ballad for Princess Jasmine. It seems that in the past three years, the franchising frenzy has caught up with the Ormocanons. When in the past, only a few Ormocanons were courageous enough to bring in brands – popular food chains, mostly – from capital Manila or neighboring Cebu, today we see a flurry of young blood and up-and-coming entrepreneurs investing in franchises. More so with the entry of the big malls – SM Center and Robinsons Place, and soon City Mall – everyone is encouraged to introduce to Ormocanons and neighboring towns newer, more popular, better brands – both in food and services. The return of investment might not be instantaneous, but, nonetheless, the Ormocanon businessman is confident in the market it has in fellow Ormocanons and those from other municipalities who would regularly come to Ormoc for rest and recreation. Truly, franchising in Ormoc looks promising and income generating. But what is franchising? The Philippine Franchise Association, in its website, defines franchising as, “a method of practicing and using another’s perfected business concept” wherein the franchisee is “granted the right to market
a product or a service under a marketing plan or a system that uses the trademark, name, logo and advertising owned by the franchisor”. Furthermore, per Security Bank, there are two main forms of franchising. There is firstly, product distribution franchising while the second form is called business format franchising.
Accordingly, in product distribution franchising, per the Security Bank website, “the relationship between the franchisees and franchisors is very much like a standard dealersupplier relationship” with a franchisee being allowed to use “the franchisor’s trademarks and
distribute its products, but in return, must pay fees and purchase a minimum amount of products”. Meanwhile, in the second form of franchising, that is, the business format franchising, “the relationship between the two parties is much more complex where there is also an emphasis on sharing business methodologies, operating systems, and support”; and “depending on the agreement, franchisees not only get the license to sell the trademark products or services, but could also get access to the business’s operating systems and a wide range of support on things like site selection, training, quality control, and marketing”. It would seem that the
franchising system is hassle-free, a s all “operational requirements” are already provided for by the franchisor to a franchisee who simply pays the “necessary fees” and / or undergoes the “required trainings” to be able to run the business. But like any other business model, it also has its pros and cons. Only those who are willing to gamble, that is, overlook the “challenges” or tries to work around it while holding on to the promises brought about by the “pros” or the “advantages”. Here is a list of pros and cons from Entrepreneur Philippines’ article, entitled, “Advantages and Challenges of Franchising”, published online on January 7, 2014: Advantages 1. High rate of success. Franchising involves tried and
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The Chamber Post
The Chamber Post
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HUMAN NATURE
One of the prominent franchises Ormoc City has witnessed in the last 3 years, is the emergence of Human Heart Nature – a brand which offers a wide range of personal care and hygienic products. Their store, located at the ground floor of Western Leyte College, Bonifacio Street, boasts a beautiful array of Human Heart Nature products – natural personal care products all made in the Philippines. Behind this franchise is a company formed by sisters Atty. Jovita Dls. Larrazabal and Jenniffer L. Quilang, and cousin Monica L. Rizarri. What sets this franchise apart from the usual franchises is their admirable thrust towards corporate social responsibility. The main goal of the brand itself, is not much on profits, but in exercising the implementation of their advocacies – to help local farmers, help their dealers have their own social enterprise, and ultimately create self-sustaining communities through Gawad Kalinga. One of the individuals responsible in bringing Human Heart Nature to Ormoc, Atty. Jovita Larrazabal, candidly gives us glimpse of their franchising experience. Question: Can you give us a brief background why you engaged in this type of business? Why did you choose to franchise rather than sell an original product/service? Atty. Jovit: I chose to franchise because for one, I don’t have my own product yet. Why Human Nature? It’s really because I like their products, this is a partnership between me, my sister Jenniffer Quilang and cousin,Monic Veloso. Actually, we have been loyal users of Human Nature products. We’ve been using their products for a couple of years already, and before, we were thinking of bringing it to Ormoc but it was not realized until late 2016. Prior to Yolanda, Human Heart Nature had this mini branch here in Ormoc but it wasn’t really known. 3 years after the said typhoon, Human Nature was seeking for a franchisee who can bring Human Nature again in Ormoc. Mr. Boboy Igot from Gawad Kalinga introduced Dylan to my sister Jen to discuss about Human Nature. Dylan, the founder of Human Heart Nature came to Ormoc to attend a Gawad- Kalinga Event sometime in November 2016. He had a meeting with my sister Jen, that fortunately turned out good. And so we decided to pursue the franchise here in Ormoc. But it’s basically because we love the product, we also love the advocacies of Human Nature. It’s not just a company that is doing business, but it also has advocacies like for example Pro-Philippines and Pro-Environment. I was still based in Manila during that time so I did the interview with the executives of Human Nature there. We started
the application for the franchise and signed the contract end of March 2017. Question: How good is the support you receive from the franchisor? What marketing and promotional campaigns are provided? Overall, are they effective? What additional activities do you have to carry out yourself? Atty. Jovit: In terms of support, actually since it’s a national brand, there are promos and sales that are really on a nationwide basis. The head office spearheads those campaigns and we just implement it here. But in terms of local marketing, it’s up to us. And in terms of support, for that we can consult. We can ask them ideas or to help us with ideas that we come up with. They have their marketing team, we just e-mail them, and they also provide the marketing materials for the promos.We do our own promotional campaigns here in Ormoc, like brand advocacy talks, wherein we talk all about the products, the brand, the benefits of using natural products. But the material is already included in our training from Human Nature when we first started. Question: Are supplier relationships good? Are there restrictions on what suppliers you can use? Do the preferred suppliers generally provide good value for money? Atty. Jovit: Our main supplier is Human Heart Nature – head office. I’m a believer of the product, and I personally use the products, so yes, I would believe that they give good value for money. It’s worth buying, and actually that’s one of the reasons why we started because we really believe in the products of Human Nature. And it’s not something that we don’t use, we also use it ourselves and we really want people to use it because we believe in the quality and value of the products. We also get some of the products directly from the social enterprises that are partners with Human Heart Nature. These are the suppliers for the local coffee and chocolates that we also sell in the store. These are the non-Human Heart Nature brands that can be found in our magalogue. Aside from these social enterprises though, we are not allowed to get other products to sell in the store. Question: If there is any specialist software provided, how good is it? Is it easy to use? Is it reliable? Do all franchisees use the same system? Atty. Jovit: Human Heart Nature provided us with their own system that we can use and this is part of the franchise. We use this for most of our backoffice functions. The use of this system was part of the training that we got when we first started this franchise. Our employees were sent to Manila for 2 weeks for a training. Sometimes head office
This picture was taken during the opening of Human Nature.(Left to right Ms. Monica L. Rizarri, Atty. Jovita Dls. Larrazabal and Jennifer Larrazabal)
representative comes to Ormoc. They come to offer assistance, and they also provide supplemental trainings for the staff for free. Question: If there is an exclusive territory, and is it of a size to allow you a reasonable return? Have there been any disputes over territories with the franchisor or other franchisees? Atty. Jovit: Part of our agreement is that Region 8 will be our exclusively territory. We have dealers, but we are the main branch in Region 8. There were no disputes over territories with the franchisors or other franchisees. Question: What level of competition have you experienced? Does the franchise offer real competitive advantage? What are they? Atty. Jovit: In terms of direct competition, I’m not familiar if there are any direct seller of natural products here that is of the same quality and same idea behind Human Nature (natural personal care products). We’ve experienced marketing competition like in terms of the usual personal care products, but with the likes of big brands like Unilever, especially now that we already have malls, we have lots of Watsons Store already. And maybe also indirect, because as we know Human Nature is still a novelty here in Ormoc, it’s also a very nice gift item option, but with the opening of the malls, the Ormocanons have a lot of options already not like before. This truly affected us, if you compare our sales in 2017 prior to the opening of the malls, there’s a really big difference. Question: Has the franchisor met its obligations under the franchise agreement? Have
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The Chamber Post
ORMOC’S FRANCHISE HONCHO
Probably one of the pioneers who ventured into the franchising business here in Ormoc is businessman Iñigo Dls. Larrazabal. At a young age of 20, and fresh out of college, “Igoy”, as he is commonly known, tried his first foray into the franchising business through ZAGU – a nicely packaged ice-blended drink, with the then revolutionary addition of the now popular “pearls” in a drink. He was able to put up 5 stalls in Manila from 2000-2003. When he had trip to Singapore, he got exposed to the numerous small businesses there – the food stalls. And when he decided to come home to Ormoc, a lot of his friends and relatives showed interest in co-franchising with him, thus the multi-brand franchises he and his business partners opened both here in Ormoc and in Tacloban. To name a few, Mcdonalds Ormoc, Dimsum Break in SM Center Ormoc, some food carts, and Sunnies, . Being an experienced franchisee, let’s delve deeper on what goes on with this kind of business structure, and get the perspective of Igoy, a seasoned franchisee. Question: Can you give us a brief background on why you engaged in this type of business? Example, why did you choose to franchise DIMSUM BREAK rather than sell an original product/service? Igoy: FATCHOI, the local dimsum restaurant which we started was already seven years old when we engaged with Dimsum Break. FATCHOI already had a lot of its equipment starting to require high maintenance. It was a local brand, but it was starting to wear us down with a lot of maintenance costs. It’s quite hard to run a local brand.You have to spend a lot to compete with the established brands. So much time and effort must be focused on production, standards, and human resource management. Added to this, after 7 years, sales was starting to dwindle, and competition was high. Maintaining it would require a large investment. My partners considered that maybe it’s worth looking into the direction of franchising. And so we all decided to franchise. Since both Dimsum Break and Fatchoi are serving dimsum, it’s competing. So we had to let go of the local brand. With franchising, there is a standard day-to-day operations, also with the commissary. You just have to follow their processes the procedures. So process-wise, it’s less headache for the owners. Question: How good is the support you receive from the franchisor(s)? Igoy: It really depends on the brand. In the case Mcdonalds, they have a very good support system. They are an internationally renowned, big service fastfood store, that they have already gotten down with science on customer service that goes beyond. Other franchisors however, the moment you pay for the franchise fee and package, you’re on your own. Most of the small franchises, no more royalty, but no support system also. But you still buy the consumables and supplies from them. As much as possible, I advise to franchise those brands which are already established and known. If it is a new one, I franchise because of the concept, not necessarily because of the brand. Question: What happens if the brand/concept does not give the support you expected? Igoy: If that is the case, then I would have to do what I can. Since I am into franchising several brands, thus, I have already established this kind of business set-up. Though my franchises are of different concepts or brands, I still transact with the same logistics shipping, and I have maintained shared resources: manpower, office, admin support, delivery system. That’s why I will no longer engage in an original business. Rather, it make sense to me to expand my roster of franchises. To be honest, if I had started with an original idea, I would have focused on it and grow it. Find a business, start there and grow it. But my situation is different, I started with a franchise.
Full house during the opening of Mc Donalds - Ormoc Branch
Question: Are supplier relationships good? Are there restrictions on what suppliers you can use? Do the preferred suppliers generally provide good value for money? Igoy: It really depends, some are good, but I also find it hard to communicate with others. So sometimes, “diskarte” is needed to run this kind of business set-up. Question: If there is an exclusive territory, is it of a size to allow you a reasonable return, sort of like protecting your territory? Have there been any disputes over territories with the franchisor or other franchisees? Igoy: Franchisor can only protect you to a point where you are willing to grow with them. Example, you cannot reasonably expect a known brand to give you a franchise in a particular geographical location when you as a franchisee decides not to expand. The franchisor will go like “Your city is getting bigger, there are 3 malls now, so why are you just one store/restaurant? You need to open another or more.” But if you decide not to, then of course the franchisor will have to offer it to somebody else. “Right of first refusal” applies. Question: Can you request a franchisor not to open in a particular area, so as not to “eat” your market? Igoy: Yes, there are also good franchisors, the more professional ones, they do take care of their franchisees and consider them as legitimate partners.They give value to the franchisees. Because if you
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The Chamber Post
A busy and meaningful Business Week 2018 for ORCHAM It was a busy and meaningful Business Week 2018 for the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) with two days of back-to-back seminar-workshops for members and non-members alike. It was the business organization’s contribution to the successful celebration of Ormoc City’s 71st Adlaw sa Ormoc or Charter Day festivities. The said seminars were held on October 9 and 10, 2018 at the Origami Convention Center. Day one, October 9, featured four talks, which were:Talk 1 – Tax Updates; Talk 2 – SSS, PhilHealth, Pag-ibig updates and easier E-Gov Payments with Security DigiBanker; Talk 3 – Business Financing; and Talk 4 – Labor Law. Kicking off the four talks was the rousing and lively welcome message given by Maricel R. Ngo, MBA (ORCHAM President ’17’18) and the motivating message of Ormoc City Councilor Nolito Quilang to the business sector. Jude P. Abenoja, CPA (ORCHAM Chairman ’17-’18), meanwhile, introduced the resource speaker for Talk 1 who was Ms. Ma. Teresa Noemi A. Pizon, CPA, RDO of BIR Ormoc. Ms. Pizon, for her Tax Updates, discussed the Trabaho Bill and the Train Law. According to Ms. Pizon, the Trabaho Bill (HB 8083) stands for T-ax R-eform for A-ttracting B-etter A-nd H-igher quality O-pportunities, which came to be, she explained
A Plaque of Appreciation was awarded to Hon. SP Member Atty. Nolito M. Quilang for giving the Inspirational message.
to “rationalize” corporate incentives while lowering corporate income tax rates, and to make the Philippines’ corporate income tax rate competitive in the ASEAN. Meanwhile, she continued, the Train Law 1-B (HB 7105) is an act “enhancing revenue administration and collection by granting amnesty on all unpaid Internal Revenue Taxes imposed by the national government for Taxable Year 2017 and the prior years; and the objective is to improve revenue collection and improve tax administration while clearing the pending dockets”. Talk 1 was then graciously cut off by Ormoc City BPLO Head, Emilio G. Tingson, to deliver the good news, saying: “Through the efforts of Mayor Richard Gomez, next year, Ormoc City BPLO will implement paperless transaction in securing business permits and payments will be deposited directly in the bank.” Afterwards, prior to lunch, the second resource speaker for Talk 1, Alphonse Mari P. Ligutan
The Orcham BOTs with the Resource Speaker Engr. Angie Dimzon, VM Toto Locsin and Barnsby Agcang.
(PICPA President), discussed the various incentives given by the national government to businesses to include: additional incentives for investments or projects that are intentionally relocating from Metro Manila and selected areas of Regions III and IV-A to other areas in the country; and additional two years of incentives of which one year may be additional year of Income Tax Holiday. Lunch was then served and the participants took a breather, preparing themselves for the afternoon sessions, which began with Talk 2, which was about SSS, PhilHealth, Pag-ibig updates and easier E-Gov Payments with Security Bank DigiBanker. Talk 3 followed immediately after, which was about Business Financing, as tackled by Security Bank Corporation and wellrepresented by Ms. Maricel dela Cerna, Head for Region 4, Small Business Loans – Security Bank. She presented who is Security Bank, how to open an account, and the loan benefits that their clients can get from them. Then, after an hour of discussion, Emmanuel A. Fiel (ORCHAM Trustee ’17-’18) introduced the next speaker, who was Atty. Alexander G. Salas (OLBA Member). Atty. Salas served as Talk 4’s resource speaker discussing the Labor Law: Guide to Employee Discipline and Termination. Accordingly, the Labor Code
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of the Philippines stands as the law governing employment practices and labor relations in the country. It was enacted, he further shared, during the Labor Day celebration of 1974 by President Ferdinand Marcos, in the exercise of his then extant legislative powers. It prescribes the rules, he explained, for hiring and termination of private employees; the conditions of work including maximum work hours and overtime; employee benefits such as holiday pay, 13th month pay and retirement pay; and the guidelines in the organization and membership in labor unions as well as in collective bargaining. “The Labor Code contains several provisions, which are beneficial to labor. It prohibits termination from employment of private employees except for just or authorized causes as prescribed in Article 282 to 284 of the Code. The right to trade union is expressly recognized, as is the right of a union to insist on a closed shop. Strikes are also authorized for as long as they comply with the strict requirements under the Code, and workers who organize or participate in illegal strikes may be subject to dismissal. Moreover, Philippine jurisprudence has long applied a rule that any doubts in the interpretation of law, especially the Labor Code, will be resolved in favor of labor and against management,” shared Atty. Salas. After the Talk 4 discussion, an open forum was held; and the certificates for the resources speakers as well as those for the participants were distributed. The following day, October 10, served as Day 2 of the backto-back seminar workshops, and welcoming the participants was Chairman of ORCHAM Jude P. Abenoja, while it was Ormoc City Mayor Richard I. Gomez who delivered a most inspiring and motivating message. Day 2, this time, featured three talks, which were:
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The Chamber Post
FRANCHISING from pg1 tested business models. Thus, entrepreneurs who decide to buy and operate franchises are exposed to lower calculated risks. This makes it better than starting up new businesses from scratch, which usually comes with greater risks. 2. Effective operating and management practices. Most of the time, franchisors have already discovered and perfected processes and efficiencies that are passed on to franchisees. Thus, franchisees could either be guided to overcome lack of business experience or be trained in polishing acquired business sense. 3. Established brand. The entrepreneur doesn’t have to worry about establishing the brand to make it a household name.The strength of the chosen brand of franchise would be enough to entice customers and guarantee success.
HUMAN from pg3 there been any areas of dispute? How were these resolved? Atty. Jovit: Yes, they were able to meet their obligations, and no, there were no areas of dispute. Question: Were the franchisor’s projections correct about the amount of capital and/or borrowing you would initially require? Have you had to increase your investment since? Atty. Jovit: We spent more than the franchisor’s projection about the amount of capital, and yes, we had to increase our investment since. Question: Were there any hidden fees or unexpected costs? Atty. Jovit: I thinks it’s not really hidden fees, it’s more like for the construction cost. I think that’s normal when you’re putting up a store that there will be unanticipated additional expenses. Question: How long were you trading before you achieved breakeven? Before you started generating income from business? Atty. Jovit: We are not yet break-even. But again Human
1. Franchisors imposing control. Some franchisors require their franchisees to religiously follow their prescribed system or processes. You may eventually find adhering to such degree of
control as difficult and restricting. 2. Additional costs. Depending on the franchise agreement, franchisees may be required to shoulder a percentage of their operations’ revenues. The amount is on top of royalty and franchise fee that are collected by the franchisor every month. There may even be more charges like advertising costs that are regularly given to franchisees. 3. Possible conflict with franchisor. It is not uncommon for a possible conflict to arise between a franchisor and a franchisee. In some cases, the franchisee thinks that a franchisor is being unreasonable and is squeezing too much for profits. Moreover, some franchisors may think that franchisees are getting too lax when adhering to the franchise contract. 4. No specific law for franchising. Currently, a law covering franchising in the country is yet to be filed and implemented. However, all
parties involved are expected to abide by the provisions of the Civil Code as well as the Intellectual Property Code. The franchising contract can contain odd stipulations as long as those don’t fall into conflict with existing laws, morals, national security, and public policies. There you go. For budding entrepreneurs, this could well serve as a guide when you take that “leap of faith” and franchise the next big thing in Ormoc. For more information on franchising, the website of the Philippine Franchise Association is filled with useful and helpful tips and tricks of the trade. They also have a list of reputable and saleable franchises in the Philippine market. Of course, you can always talk to fellow Ormocanons who have been blessed by their respective franchisees. Truly, the future of franchising in Ormoc has never been this ‘shining, shimmering, splendid’.
Nature as a business, it’s really more of a social enterprise and the idea really is that behind the business, behind the selling, Human Nature is after helping others, especially that Human Nature is closely aligned with GawadKalinga. Like the manufacture of the products, they really use raw materials so that it will go directly to the farmers. The margins are really not that big but it’s mostly because we want to help our dealers to have their own social enterprises, so that they can do something also. So if you look at the discount scheme, Human Nature really offers a big discount to the dealers because really, the idea is to help others put up their own business. Moreover, Human Nature has a lot of projects to help - they work with Gawad-Kalinga to put up Gawad-Kalinga Villages. Corporate Social Responsibility is at the forefront of Human Nature, it’s more of why they do business because they really want to help others and it’s also one of the reasons why we loved working with them.
Question: How would you describe your relationship with the franchisor and other franchisees? Atty. Jovit: We have good relationship with other franchisees. We have an annual franchisee meeting. I get to meet with them and get to ask them questions. Question: Is there a good two-way communication with the franchisor? How does this happen? How does this happen? How often? Atty. Jovit: Yes, basically through e-mail. I communicate everything with them through e-mail. I can call them directly. We have an account manager who manages our accounts. I am very open with their branch head, as I can e-mail him directly and feedbacks are immediately given. Question: If you were to start again (without the operational knowledge you have now), would you choose the same franchise again. Atty. Jovit: Why not? But for now I don’t have plans to franchise again. Question: In layman’s terms, what are the benefits and drawbacks
of franchising? Atty. Jovit: Maybe the benefit is you don’t need to think of a product because it’s already there, the systems are already in place, and the brand recall they’ve already established. The drawbacks can also be on the product. You can do nothing on it, in as much as you want something to be done with it and be creative, in the end it’s not yours, you are restricted with the rules of the franchisor and all you can do is to follow. Question: For the aspiring entrepreneurs, what would you recommend for them to franchise? Atty. Jovit: I would recommend a franchise like Human Nature, but only to those who have other businesses. This can’t be a source of livelihood for them considering that it’s not a profit-oriented business, it has low margins but it’s still very nice and the products are really good. In fact, I am using nothing but the products of Human Nature. It’s also very fulfilling to know that in some way, we are able to help our local industry, our local farmers.
4. Easy options for recapitalization. Franchisees can ride on the outstanding reputation of the brand or franchisor. This way, they could easily apply for and obtain approvals for loans from financial institutions or banks. A reputable franchise is already an appreciating asset on its own. It can be resold or liquidated any time, making it attractive for lenders. 5. Greater profit. It is possible to incur lower costs on materials and supplies through the help of the franchisor. If sales reach or exceed targets, the franchisee will surely enjoy greater profits. This makes franchising an easier ticket to business success. Challenges
The Chamber Post
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Welcoming new members:…: ; ORCHAM holds back- to- back membership orientations
No organization can ever survive or should we say, thrive, without infusing “new blood”, that is, new members into its system. Thus, in its quest not only to survive but to thrive, and thrive abundantly, the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) makes certain that it conducts regular new members’ orientation. In 2018, under the leadership of President Maricel R. Ngo, it was able to hold two orientations, which happened on November 13 and 20, respectively, at the ORCHAM office, located on the second floor of the Ormoc City Superdome. The orientation materials, meanwhile, include topics on what is ORCHAM, how does the organization work, benefits of being an ORCHAM member, why and how to become a member of ORCHAM, who are the trustees and staff, and the organization’s advocacies, awards and achievements and activities conducted and participated by ORCHAM. During the November 13, 2018 orientation, it was ORCHAM VP-Membership Aileen SuarezAviles together with Ms. Ngo who conducted the orientation, and in attendance were: Rogelia Galapin from Ormoc
Mayor Richard Gomez welcomed the newly inducted members of ORCHAM.
VP for Membership Aileen S. Aviles & President Maricel Reyes-Ngo gave the orientation to the prospective members.
Carinderia, Lechon and Puso Association; Arlene Suico & Julita Andoy from Ormoc Vegetable Vendors Association; Maria Diendo from Cignal; Virgilio Bactol from Ormoc Fish Vendors Association; Domingo from Ormoc Fruit & Dry Goods; Virgilia Labos from Ormoc Fruit Vendors Association; Gaudencia D. Ygot from Twigs & Flowers Party Shop; Marivic Matuguina from Matuguina Meatshop; and Ronilo Diaz from Ormoc Meat
Vendors Association. Four out of the 10 attendees registered their businesses right then and there, and are now official members of ORCHAM, namely: Ormoc Fruit Vendors Association;Twigs & Flowers Party Shop; Matuguina Meatshop; and Ormoc Meat Vendors Association. Then, on November 20, joining Ms. Aviles was VP-Internal Affairs Archt. Ingrid Cimafranca in holding an orientation to two attendees, who, at the end of the
orientation, joined ORCHAM and are now official members. They are Ms. Janeth representing Rootcrops & Vegetable Association and Mr. Romualdo Tan Jr. representing Bioquench. ORCHAM is encouraging both old and new businesses to join them and become a part of the growth of the organization, or better yet, grow together with ORCHAM.
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The Chamber Post
PICPA-Ormoc, ORCHAM hold seminar on how to reduce tax ethically With the aim of helping members not evade taxes, but be able to reduce tax obligations ethically and legally, the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) initiated the conduct of a seminar aptly titled, “How to Reduce Tax Ethically”, on November 28, held at the Origami Convention Center. It was ORCHAM president Maricel Ngo who delivered the welcome message, while it was Jude Abenoja, ORCHAM Chairman of the Board, who introduced the seminar’s resource speaker. She is none other than Ms. Rhodora “Iri” Icaranom, a former BIR Revenue District Officer in Metro Manila, and who is both a PICPA National Officer and a PICPA-Accredited Lecturer. Ms. Icaranom started the discussion on “How to Reduce Tax Ethically”, highlighting to the participants that the relationship between tax payment and income is inversely proportional, which means, that “when tax payment goes up by a certain amount, the income goes down by an exact amount”. She continued her lively discussion on the definition of tax
planning and tax avoidance. She said that tax planning can “help lower one’s tax payments” while tax avoidance means “applying the law to cut down one’s tax obligations”, adding: “it is not the same as tax evasion, as evasion will send you to jail.” Tax avoidance, furthermore, she explained is not forbidden. It is settled in the principle that a taxpayer “may reduce one’s tax liability by any means which the law permits”. “What the law forbids is tax evasion, which refers to the use of illegal methods to lower one’s taxes,” explained further by Ms. Icaranom. However, Ms. Icaranom shared that it is unfortunate that “evasion” and “avoidance” are sometimes used as synonyms in connection with tax matters. She further clarified that a useful distinction may, however, be drawn between them, saying: “Evasion should be applied to the escape from taxation accomplished by breaking the law, that is, it is deliberate. The term avoidance, meanwhile, refers to escape from tax that is accomplished through legal procedures, which may be contrary to the intent of the
tax law, but nevertheless do not violate the law.” Other important topics discussed during the whole-day seminar included the types of fraud cases; tax management in the filing of returns; Revenue Memorandum Circular No. 69-2009, that is, the mandatory enrollment to and availment of the Electronic Filing Payment System (eFPS) facility for selected taxpayers; the Revenue Regulations No. 9-2009, which is the Maintenance, Retention, and Submission of Electronic Records; and the Revenue Regulations No. 16-2008, that is, the Optional Standard Deduction (OSD) Allowed to Individuals and
Corporations in Computing their Taxable Income. Ms. Icaranom also tackled Tax Management on Improperly Accumulated and Retained Earnings; Tax Management on Withholding Taxes, Exempt from Withholding Tax on Compensation, Other Matters in Withholding Taxes; Tax Management on Value Added Tax (VAT); Tax Management on Tax Assessment and Tax Remedies; and Tax Management on Delinquent Taxes. It was a full and filling day for both the resource speakers and the participants, and it was but apt for Mr. JudeP. Abenoja, CPA to deliver a motivating closing remarks.
Resource Speaker Ms. Rhodora “Iry” Icaranom with the ORCHAM BOTs.
ORCHAM supports 2-day ASPIRE events
Forming part of Ormoc City’s ASPIRE stands for Agribusiness 71st Adlaw sa Ormoc festivities Support for Promotion in was the two-day ASPIRE events Regional Exposition and it is a that happened in the said city. program of the Department of
Lectures on Livelihood Programs offered by ASPIRE.
Agriculture regional field office 8 and the Ormoc City Chamber (DA-8). It was launched in the city of Commerce and Industry, Inc. of beautiful on October 17, 2018 (ORCHAM). with the help of LGU-Ormoc Then, on October 18, 2018, ASPIRE lectures and businessmatching were held on the second floor of Sutuwaki Restaurant. Participants were Ormoc businesses that had an “agriculture” aspect or requirements to them; and the event was made possible with the DA collaborating with the Department of Trade and Industry, LGU-Ormoc and ORCHAM.
The Chamber Post
MRN’s Hits & Misses
developers. Learn from Bacolod and Tacloban experience. Township- building communities”. 2. September 5,2018 – How to Achieve Efficiency in the Business Operations. In response to the rising costs of electricity, water and other utilities, and the effects of the adaptation of the new TRAIN law, the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) organized seminars that would address these concerns. One of which is a course on how to control and reduce administrative costs without disrupting operations, while at the same time improving office productivity and contributing to the organization’s mission. Prof. Enrico Mina DBA, Former Senior Lecturer and Director of Executive Master of Business Administration Program (EMBA) in Papua New Guinea University of Technology and TQM and Six Sigma Consultant, was the resource speaker for the seminar "How to Reduce Admin Costs and Achieve Efficiency in Business Operations”. 3. June 21, 2018 – Business Night (Fiesta President Maricel R. Ngo welcomed the attendees of the Kapihan. Event)
2018 has been filled with a whirlwind of activities for ORCHAM. Thanks to its very active and visionary president, Maricel R. Ngo, the year has been a productive and enjoyable journey for all of its trustees and members. From the personal thoughts of Ms. Ngo, below are what Ms. Ngo considers as her winning “HITS” and very minimal “MISSES” during her fruitful term as president of ORCHAM. THE HITS 1. May 18, 2018 – How Can Local Businesses Adapt to the Entry of Large National Players LGU-ORCHAM Kapihan “A very well-attended forum with a relevant topic and engaging activity, and with lots of take away to the local businesses. My learnings: Embrace change. Be innovative. Collaborate with the LGU, the business sectors, investors and
ORCHAM BOTs having fun at the 2018 Business Night.
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5. August 30-31, 2018 – 27th VABC in Bacolod City (Hit with a smile) ORCHAM, together with EV Mail, Ormoc City LEIPO and Tourism Office, joined the 27th VABC in Bacolod City. (see related article…)
Business Night 2018 - Tana Maglipay Ta! "We want it entertaining, full of fun. So much work in the office. Offer us something that will de-stress us, owners and our employees"- Business The Visayas Contingent with the Sector PCCI President Alegria Limjoco. It was a night full of fun, enterainment and prizes. For a 6. October 9-10, 2018 – Business night, local employers and their Week (Hit Overload) employees had the chance to party the night away in anticipation of the grand celebration of the city fiesta. A lot of prizes were raffled off, sumptuous dinner was served, Groupie with the dynamic and everyone got entertained with Mayor Richard Gomez guest performers who regaled the The 2018 Ormoc City audience with performances and Business Week Seminar held comedic acts. in Origami Center, was held in 4. Nov. 28, 2018 - How to Reduce collaboration with ORCHAM and Tax Ethically the Local Government Unit. In ORCHAM, in collaboration celebration of the 71st Adlaw sa with Ormoc City LGU and PICPA, Ormoc (Charter Day), the week held the successful hosting of the was a full of forums, trade shows, seminar, “How to Reduce Tax agri fairs and seminars, which Ethically” on November 28, 2018. delighted all local businessmen, The seminar was competently aspiring businessmen, guests, handled by the great resource visitors, and local residents. It was speaker, Ms. “Iry” (Marti Havana), a plethora of activities and events, who gave a superb and excellent all for the love of empowering handling of the seminar. There local businesses to flourish and were no dull moments during the showcase what they can offer. entire program. MRN... è pg 18
ORCHAM partners with USC, brings in EMBA to Ormoc
In its quest to become better and to help fellow Ormocanons become better, the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) made certain that it is represented during the October 23, 2018 consultative conference of Cebu’s University of San Carlos (USC) School of Business and Economics – Graduate Program. It was then ORCHAM president Maricel R. Ngo who volunteered to participate in the said consultative conference with the hopes of ORCHAM
partnering with USC in organizing a possible offsite program offering of the latter’s Executive MBA program in Ormoc City. She came out victorious and on February 13, 2019, at the CMO Conference Room, New Ormoc City Hall, USC Graduate School Program Head Cecille Gantalao and the other Board of Directors presented the Executive Masters in Business Administration and other masteral programs of USC to Ormoc City Mayor Richard Gomez. With him were the LGU-Ormoc’s HR Head and the
President Maricel R. Ngo attends the consultative conference in USC.
ORCHAM Board of Trustees. The presentation and guests were warmly welcomed by the good mayor, who himself holds an MBA degree. According to ORCHAM, the said program will enhance career opportunities and promotion
chances of LGU employees occupying managerial positions, and other enrollees residing in Ormoc and neighboring municipalities. Classes, per ORCHAM’s knowledge, is set to start on August 2019.
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BUSY from pg5 Talk 5 – Accounting for Non-Accountants; Talk 6 – Ordinance No. 059: No Plastics Day; and Talk 7 – Safety Leadership in the Business (Why Occupational Safety and Health is Important). Serving as resource speaker for Talk 5 was Gemma Flor C. Corbo (ORCHAM VPFinance & Accounting). Her discussion focused on why every businessman should study accounting, even if one is not an accountant, saying: “Accounting is an activity you will do even if you are not an accountant, simply because it is necessary especially so if
you engage in a profit-oriented undertaking, called business.” Accounting, she defined, is “an information system that provides reports to users about the economic activities and condition of a business”. She further said “its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making sound economic decisions”. Ms. Corbo said that there are four functions of accounting, which are: (1) Recording Data, (2) Classifying of Data, (3) Summarizing of Data, and (4) Interpreting the Results. Immediately after, Stephanie Diane U. Chu introduced the
HONCHO from pg4 are a good franchisee, you can improve the brand and grow the business. In most cases, if they see that you are taking care of their brand - your sales, quality and customer service is good, they offer the expansion to you. So, as a franchisee, if the business is really doing good, and you think you can replicate it, why not. Franchising is a successful business model. A good business with a good known product. I no longer intend to produce an original product. I will just take care of my corporation. My direction is to grow the business with same brands and add more branches, or if there are new good brands and opportunities, I might add more. Right now, I am sticking to Region 8. I don’t want to over extend also, just because there are opportunities. Question: In your experience, has the franchisor(s) met their obligations under the franchise agreement? Have there been any areas of dispute? How were these resolved? Igoy: Yes, some franchisors meet their obligations under the franchise agreement, but there are also others who don’t. Regarding legal actions, so far there is none. There were times when we almost reach that point, but for me, it entails additional costs. I do accept the fact that these are not my brands and I just pay royalty. So as long as you are doing well, then there is no problem. If they are taking advantage of you, you can choose to fight, or “diskartehan nalang”. I opt to absorb the costs, if it’s possible. Then the moment I realize that I made a mistake, I close the business and move on. Question: Were the franchisors’ projections correct about the amount of capital and/or borrowing you would initially require? Have you had to increase your investment since? Igoy: No, they are very up front with regards to that. They would tell you that this is the best estimate, or say, “This is the franchise package, more or less.” Some would say, “If you start this kind of restaurant, this was our previous total cost”, or “These are our suppliers, and you are free to negotiate”. There are times that the actual cost is almost the same or lower. Question: Were there any hidden fees or unexpected costs? Igoy: In some instances, yes. In some instances, it is not clearly explained. So most often than not, I ask my lawyer sister to review the terms of the contract. But again, I have learned that in any franchise, the terms are usually slanted towards the favor of the franchisor. So
next speaker, who was Ormoc City Vice Mayor Leo Carmelo L. Locsin Jr. He delivered Talk 6, which focused on Ormoc City Ordinance No. 059: No Plastics Day. He said that it is now a law that every Wednesday in the city of Ormoc is “no plastics day”, with the aim of regulating the use of plastic bags and other plastic materials in the sale of goods, promoting the use of eco bags, and other environment-friendly practices. Finally, after a long day was Talk 7 with Engr. Angelita N. Dimzon serving as resource person. She talked about Safety Leadership in the Business: Why Occupational Safety and Health is Important in the Business.
She said, health and safety procedures in the workplace reduce employee illnesses and injuries greatly, adding, “training is important and effective, as it will educate employees on proper workplace procedures, practices, and behavior to prevent possible injuries and illness or contamination from improper hygiene”. After Engr. Dimzon answered all questions during the open forum, the certificates for both the speakers and the participants were once again distributed. Then, Arch. Ingrid Cecilia T. Cimafranca (ORCHAM VP-Internal Affairs) delivered the closing message.
if you can live with that, then you are okay. Question: Is there a good two-way communication with the franchisor? Igoy: Some yes, some no. Question: How does this happen? How often? Is there a convention or a meeting? How often do you meet or chat with other franchisees? Igoy: Mcdo has a big one, happens once every two years. They hold it in a huge place in Florida. We have not attended yet coz my wife was pregnant at that time. Sometimes there are also local trips. The latest one was in Malaysia. Last time we went to Japan. Domestically yes, there are. Last year it was in Tacloban. This year it was in Legaspi. Granting of awards also happens during these conventions. Most importantly, I gain a lot by attending these events, like expanding my network and learning best practices. Question: For aspiring entrepreneurs, would you highly recommend for them to franchise? Igoy: Well, if they are so inclined to. Definitely, there are opportunities. There will be a lot of new concepts. It will never stop. Some new brands will come in. Some would really prosper. Some would easily falter. There are brands/concepts that are trending today, but in a few months’ time, it will dwindle, meaning it was just a fad. So the trick is, knowing as best as you could. Going back to what I said, concept is the key, and not because of the brand. Why? Because I would know if that concept would stay, it would not matter what brand it is. Question: Are you always on the look-out for these new concepts? Igoy: Yes, but again, it does not necessarily mean that just because it’s an opportunity that they offered to you, you grab it at first glance. This I learned the hard way, that you don’t have to jump, you don’t have to take the offer right away. You have to study and sometimes you really make mistakes. Like I said, you can make mistakes, not necessarily on the brand, it could also be on the location, or other factors. Question: Lastly, in a nutshell, why franchise? Igoy: With franchising, a big component if you want to quickly start a business, a franchise is readily available. You just have to make sure that the service/product you choose is of good quality. You just have to follow their procedures and standards, get a good location, strategize, I think you’ll never go wrong.
The Chamber Post
ORCHAM welcomes launching of APAD EV in Ormoc APAD EV Partners took a pose after signing the covenant.
The Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) is now officially one of two partners under the business sector of A-PAD Eastern Visayas, following the November 16, 2018 launching of the regional platform in Ormoc City. A-PAD Eastern Visayas is, accordingly, the third regional platform launched by the AsiaPacific Alliance for Disaster Management Philippines since its establishment in 2015.
The launching in Ormoc happened at the SP Session Hall (3rd Floor) of the Ormoc City Hall. The launching was attended by organizations coming from the business, academe, nongovernment organizations, civil society organizations, government and media. In attendance too were representatives from APAD Japan, PDRF, CDRC, Rotary International District 3860, LGU-Ormoc, OCD 8, LCDE,
and ORCHAM, who all led the A-PAD launching ceremony. It was ORCHAM Chairman of the Board Jude P. Abenoja, CPA who warmly welcomed the guests and partners to the event; and who expressed assurance that ORCHAM, along with the other stakeholders will be dedicated and supportive to the project. Ormoc City Mayor Richard Gomez, meanwhile, applauded the government’s effort in disaster resilience and management, and pointed out the importance of partnering with different organizations that work towards climate change adaptation and disaster risk reduction and management. He disclosed that LGU-Ormoc is investing heavily on disaster risk management. The Senior Adviser for APAD Japan Nobutaka Miyahara also gave his remarks, emphasizing “the importance of the citizens’
ORCHAM holds consultations, amends articles of incorporation and by-laws
Following numerous consultations and too many productive meetings, finally, the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) now holds and is guided by an Approved Amended Articles of Incorporation and ByLaws. For this feat, ORCHAM dedicates a special thank-you to 2017’s ORCHAM Special Committee on Amendments of Articles of Incorporation and By-Laws and to ORCHAM Executive Director Che Gallo
The first meeting with ORCHAM Consultative Past Presidents.
for her patience, dedication and perseverance. It was on December 5, 2017 when ORCHAM’s journey to amend Articles of Incorporation and By-Laws (incorporating all comments, additions, deletions and updates from 1999 up to 2017, including the valuable inputs of all past ORCHAM presidents) started, following a closeddoor meeting at Jo’s Milagrina Restaurant. The meeting was initiated by then Board of Trustees (BOTs), headed by President and Chairman Jude Abenoja, and
invited were six past ORCHAM presidents (Rizarri, Fiel, Laurente, Brazil, Larrazabal and Evangelista). The goal of the meeting was to discuss thoroughly the pertinent provisions of the ORCHAM By-Laws as compared to Outstanding PCCI Chambers, compliance to SEC and other important updates beneficial to ORCHAM and Ormoc City as a whole. It was a fruitful meeting with the six past ORCHAM presidents supporting the endeavor, and even giving their suggestions and
ORCHAM Past Presidents Atty. Roy Bernard Fiel and Atty. Nolits Quilang with the Charter President Ms. Daya Rizarri, President Maricel Ngo, VP for Membership Aileen S. Aviles, Chairman Jude P. Abenoja, CPA and the ORCHAM Secretariat reviewed the ORCHAM BY Laws.
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power and the coordination of the Civil Society Organizations (CSOs) and the Government”. Finally, Troy Bumagat, Executive Director of Rotary District 3860, and who happens to be the focal person of the A-PAD Eastern Visayas Regional Platform, introduced the partners from the different sectors. For the business sector: ORCHAM and Energy Development Corporation (EDC). For the CSOs: LCDE, Rotary International District 3860, Ormoc City Lions Host Club, React Ogmok. For the academe: Leyte Colleges, Western Leyte College and Visayas State University. For the government: OCD-8 and LGUOrmoc through the Ormoc City Disaster Risk Reduction and Management Office. For the media: PIA-Southern Leyte. Concluding the launching ceremony was the signing of covenant among the partners and stakeholders. recommendations for a much better Amended Articles of Incorporation and By-Laws. This meeting was followed with a January 18, 2018 Special Committee on Amendments of By-Laws (SCABL) meeting attended by then Board of Trustees headed by Mr. Abenoja together with Vice Presidents Maricel Ngo, Aileen Suarez Aviles, past ORCHAM presidents Daya Rizarri and Atty. Roy Bernard Fiel, and Atty. Nolitz Quilang. The goal of said meeting was to finalize and collate all agreed amendments ready for the scheduled Elections and General Assembly on February 28, 2018. Then came the day of the elections. All was set. Everything was ready and in order. It was unanimously approved by the general membership during the said February 28, 2018 general assembly. Today, ORCHAM stands before a much better and in tune with the times Amended Articles of Incorporation and By-Laws.
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A meaningful and fruitful tax dialogue between ORCHAM, BIR
Chairman Jude P. Abenoja, CPA, RDO Noemi Pizon, PICPA President Imelda Mendoza & Orcham President Maricel Ngo sat as the panel during the forum.
It was a meaningful, fruitful and informative tax dialogue between the BIR, as facilitated by its RDO Ma. Teresa Noemi Pizon, and the members of the Ormoc City Chamber of Commerce and Industry, Inc. (ORCHAM) one fine afternoon last October 25, 2018. In attendance were 15 PICPAns, ORCHAM members and other businesses in Ormoc and neighboring towns. The dialogue, accordingly, aimed to discuss: (1) the letter of the BIR Regional Director on their tax compliance; (2) withholding tax updates as List of TP published in the website; (3) latest BIR pronouncements; and (4) other BIR concerns. Per RDO Pizon, “BIR voluntary compliance is very low; with BIR district 089 still way below the target.� According to her, the said BIR dialogue with ORCHAM
members aims to appeal to the business sector to review their tax payments (VAT, Income Tax, Withholding Tax Expanded) this year. As shared by RDO Pizon, Letters of Request for SelfAssessment have been sent to business establishments with reduced tax payments. Accordingly, comparative reports between 2017 and 2018 actual
tax payments were generated and analyzed by the RDO herself, listing those with alarming comparative figures (i. e. sudden decrease on tax payment using 2017 baseline). RDO Pizon is furthermore urging businesses to pay voluntarily until end of October 2018; otherwise, her office may be forced to put some businesses with questionable tax payment
BIR RDO Ma. Theresa Noemi Pizon and Leah Sabelino with the ORCHAM BOTs and PICPA-Ormoc Chapter Officers.
history under surveillance. In addition, she shared that businesses classified as TAMP are required to withhold 1% from all their suppliers. She said that one may check out the list of TAMP in the BIR website (www.bir.gov. ph). Furthermore, RDO Pizon is encouraging business owners themselves to visit her office anytime should there be queries related to tax concerns; and for amendments, businesses are given until the end of October 2018 without interest and penalties. The dialogue ended with RDO Pizon now fully aware of the concerns and queries of the business sector and business owners now clarified and aware of the thrusts and goals of the RDO and the BIR as a whole, and how each will be of help to each other.
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MAYORS FOR PEACE (HIROSHIMA, JAPAN) 7. October 18, 2018 – 44th PBC in Manila (Bailando Hit) December 10, 2018: ORThe very vibrant, dynamic and engaging ORCHAM trustees and officers with EDCG represented the entire Visayas Chambers by showing CHAM meeting with the Mayors their dance moves, for a dance presentation at the 44th Philippine Busi- for Peace Executives in Hiroshima, Japan. Our very own, Mayor Richness Conference and Expo’ Fellowship Night at the Manila Hotel. ard Gomez (MRG) is a member of the Mayors for Peace since April 2018, of which the Mayor of Hiroshima is the President. ORCHAM represented the Ormoc City LGU, in which a signed letter from MRG was personally handed over and read to the present executives. The group was warmly welcomed in Hiroshima, thanks to Mayors for
Peace Chief Officer Isao Hashimoto and Under-Secretary General Seiji Iwasaki. This was deemed as a great start for an Ormoc CityHiroshima City sisterhood agreement. THE MISSES: 1. July 2018: NAGA City Trade Mission 2. August 2018: Workshop on Change management 3. November 2018: ABCs of Strategic Planning & Budgeting 4. December 2018: Reducing Stress in the Workplace and Wellness Program in the Workplace.
The ORCHAM Bailando Dancers.
8. November 2018 – Hiroshima, Japan Trade Mission (Freezing Hit)
ORCHAM Hiroshima, Japan Trade Mission Team with the Hiroshima Mayor for Peace Chief Officer Isao Hashimoto and his colleagues.
J.T. KANGLEON ST., ORMOC CITY Contact No.: (053) 561-7937
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