PFA CHAIRMAN'S NEW MISSION: TURN PHL INTO ASEAN'S FRANCHISING HUB

PFA chairman emeritus Samie Lim addressing international and local franchisers, franchisees and participants at the Franchise Asia Philippines 2013 conference and expo. MANILA, Philippines - In less than a year, the Philippines will be joining other members of the Association of Southeast Asian Nations (Asean) to form the Asean Economic Community (AEC). The economic integration in Southeast Asia is expected to offer a lot of opportunities as well as pose numerous challenges to policymakers and businessmen, including thousands of franchises nationwide. The key in succeeding in this time of change is preparation. Samie Lim, recognized as the “Father of Philippine Franchising” and chairman emeritus of the Philippine Franchise Association (PFA), said this is the reason why the 2014 edition of Franchise Asia Philippines (FAPHL) will specifically address the concerns of franchisers about the Asean integration. “Asean is a big market and presents big opportunities to franchisers. Getting to know this market and finding out its needs would provide any businessman a competitive advantage,” Lim, chairman of BLIMS Lifestyle Group, Inc. and Canadian Tourism and Hospitality Institute, said. “I am confident that the industry will succeed in the AEC. The franchising sector has weathered the storms it faced in the previous years and I am sure the sector can overcome the challenges posed by the Asean integration,” Lim stressed. READ MORE...

ALSO: Malacanang eyes P2.6-trillion 2015 budget

President Aquino will most likely submit his proposed national budget for 2015 to Congress after his State of the Nation Address (SONA) on July 28. Budget Secretary Florencio Abad has told The STAR that the administration intends to keep the tradition it has started of submitting the budget proposal to the House of Representatives and the Senate a day after the SONA. This gives lawmakers enough time to scrutinize the proposal and approve it before yearend, he said. The President presents his proposed spending program to Congress through his budget secretary. Based on Abad’s memoranda to state agencies, Malacañang is eyeing a P2.606-trillion national budget for next year. The issuances contain “indicative budget ceilings.” In his memoranda, Abad discussed the general thrusts of the planned 2015 outlay. Through the 2015 budget program, he said the government would again try to attain inclusive growth through such programs as cash transfers to the poor, K to 12 basic education, universal healthcare and housing for squatters. The budget would also be designed to help the government steer the economy to growth through infrastructure development, pursue good governance and anti-corruption programs and minimize disaster risks to prevent loss of life, property and livelihood, he said. Despite last year’s succession of calamities, he said the government remains optimistic that it would attain its economic targets, on which the 2015 budget proposal is broadly based. Next year’s planned outlay is P341 billion more than this year’s P2.265-trillion spending level. READ MORE...

ALSO: DBM releases P1.67 B for classrooms in Yolanda hit areas

The Department of Budget and Management (DBM) has released P1.67 billion for the construction of 1,704 classrooms in elementary and secondary public schools in areas hit by Super Typhoon Yolanda, in line with the Aquino administration’s goal to close the nationwide classroom gap. DBM Secretary Florencio Abad said the money was turned over to the Department of Public Works and Highways (DPWH), the agency in charge of the rebuilding of classrooms damaged by Yolanda. “We have to make sure our students enjoy sufficient school facilities that make their campus environment more conducive to learning,” Abad said. Of the total amount, the big chunk or P558.7 million would go to Eastern Visayas for the construction and reconstruction of 559 classrooms. Regions VI and VII would get P212.9 million and P287.3 million, respectively, for a combined target of 509 classrooms. “Our budget for the year fully supports the needs of our education sector, as advancing quality education in the country remains a top priority. The same can be said for our post-calamity rehabilitation efforts, where we continue to ‘build back better’ and fast-track recovery in all affected areas,” Abad said. The DBM recently released P7.35 billion for the construction of 7,136 classrooms nationwide comprising 5,916 classrooms for elementary schools and 1,220 classrooms for secondary schools. THIS IS THE FULL REPORT.

ALSO: Something scary about tax evasion

There was this news report last Friday here in PhilStar Business that scared me about its political implications. The government has supposedly lost an estimated P15.6 billion in taxes last year, the report said, due to illicit tobacco trade in the country. Wow! If that report is correct, the next president could be elected by someone or some people who evade taxes or break even more serious laws. It only takes P5-6 billion to elect a president. It takes even less than that to buy other bureaucrats as well as judges and justices to get favorable rulings. It has happened in other countries. In Latin America, the narcotics trade has spawned narco politics. The illicit drug trade is known to fund national and local politicians. That’s a scary scenario anyway you look at it. Here, it could be tobacco today and something else more sinister soon. If they own the president and can buy off regulators and judges, they could do almost anything else from drugs to human trafficking and contract murder. Just imagine that the failure of government to curb smuggling and tax evasion could be something more than depriving the national treasury with funds for the country’s development needs. It could be a serious security threat and may end democracy as we know it. It is a big problem even now. Jose Alejandrino who used to be the presidential assistant for economics of FVR posted on Facebook IMF findings on how bad our smuggling situation is. READ MORE...


READ FULL MEDIA REPORTS:

Samie Lim’s new mission: Turn Phl into Asean’s franchising hub


PFA chairman emeritus Samie Lim addressing international and local franchisers, franchisees and participants at the Franchise Asia Philippines 2013 conference and expo.

MANILA, JUNE 16, 2014 (PHILSTAR)  By Jennylei D. Caberte - In less than a year, the Philippines will be joining other members of the Association of Southeast Asian Nations (Asean) to form the Asean Economic Community (AEC).

The economic integration in Southeast Asia is expected to offer a lot of opportunities as well as pose numerous challenges to policymakers and businessmen, including thousands of franchises nationwide.

The key in succeeding in this time of change is preparation. Samie Lim, recognized as the “Father of Philippine Franchising” and chairman emeritus of the Philippine Franchise Association (PFA), said this is the reason why the 2014 edition of Franchise Asia Philippines (FAPHL) will specifically address the concerns of franchisers about the Asean integration.

“Asean is a big market and presents big opportunities to franchisers. Getting to know this market and finding out its needs would provide any businessman a competitive advantage,” Lim, chairman of BLIMS Lifestyle Group, Inc. and Canadian Tourism and Hospitality Institute, said.

“I am confident that the industry will succeed in the AEC. The franchising sector has weathered the storms it faced in the previous years and I am sure the sector can overcome the challenges posed by the Asean integration,” Lim stressed.

Lim noted that even with little government support, the industry has placed the Philippines within the radar of foreign franchising giants. In fact, the US-based Edwards Global Services (EGS), a research and consultancy firm, ranked the country as among the top 10 countries where franchising can flourish.

Thanks to the hard work of local players under Lim’s leadership, franchising has now become a major contributor to the Philippine economy. The sector represents about 35 percent of retail output and hires over a million workers.

The 2011 report of the World Franchise Council said the Philippines has an $11-billion franchising industry consisting of over 1,300 franchise concepts, more than 124,000 franchisees, and an employee base of 1.1 million.

Lim said these franchise concepts are world-class and can go head to head with franchises in developed countries. Some Filipino franchises such as Goldilocks and Max’s have already ventured out to United States, Canada, Thailand and Middle Eastern countries.

Lim’s resolve to champion the concerns of small and medium enterprises in particular and Filipino brands in general, is rooted in his family’s history of living in Tondo, Manila. Though Lim’s family was among the most respected in Tondo, living amongst shanty-dwellers opened his eyes and broadened his understanding of the hardships of starting small.

Samie, nicknamed “Cubie” in school for being a perfectionist, actually first learned about franchising as early as the 1960s. He transferred to San Beda College from St. Stephen in his fourth grade and from being a member of the lowly Section H Class, Samie finished high school as class Valedictorian.

When he attended college at the Ateneo de Manila University, he engaged in part-time jobs selling roses in exclusive schools on special occasions like Valentine’s. He also sold encyclopedia before joining Abenson in the 1960s.

His humble beginnings as a businessman also educated him on the importance of hard work. Lim’s first job was with SAVE Marketing owned by the Bagatsings and Floros where he sold discount cards for students when he was in high school.

From his days of being an employee to venturing out on his own through BLIMS Fine Furniture, Automatic Centre, and now the Canadian Tourism and Hospitality Institute, Lim never became a stranger to life’s difficulties. This is one of the reasons why his heart always went out to the entrepreneur. He knows their difficulties and concerns simply because he has and is living their lives to this day.

His dedication to the cause of Philippine franchising spurred him to travel to many countries such as the United States, United Kingdom, where franchising is an established industry. Lim brought home the many lessons and insights he gained from his visits so that other local franchisers can apply it to their own ventures.

The 20 years that Lim spent strengthening the industry saw the birth and introduction of many brands in the Philippine market. These catered to the tastes, needs, and whims of Filipino consumers.

Together with Ma. Alegria “Bing” Sibal- Limjoco, vice chair of PFA, he established Francorp Philippines to help more franchisers standardize and professionalize their operations.

Lim believes that these franchise concepts will be embraced in Asean where countries have similar taste profiles as he vowed to rally behind these Filipino concepts to ensure their success not just in Southeast Asia, but also in other parts of the world.

Lim, who is also the chairman emeritus of Philippine Retailers Association, said the Philippines is expected to attract more foreign brands—from the mass market to luxury segments—as global retailers are starting to notice the vastly improved purchasing power of Filipinos.

In his presentation at the recently concluded 4th Annual World Retail Congress Asia Pacific in Singapore, Lim cited close to 50 global brands that entered the Philippines in the last two years. Included are American casual and European high-street fashion items, as well as luxury brands like Bentley and Rolls Royce.

“This is a clear indication that people now have more disposable income. For food, we literally have hundreds of franchises that came in. Luxury goods also continued to perform at robust levels. This was a direct result of the improvement in consumer purchasing power. For many years, luxury brands seem to ignore the Philippine market. But to those who gambled, it was all worth the wait,” Lim told an audience consist of representatives from global firms and international retail experts.

To fully support franchisers, Lim joined hands with other industry stakeholders to ensure that FAPHL 2014, Asia’s biggest 4-in-1 franchise show slated on July 16 to 20 at the SMX Convention Center in Pasay City, would equip them with the necessary tools to succeed in the AEC.

Franchise Asia Philippines 2014 is organized by the PFA – the country’s premier and only internationally recognized franchise association and the organization of the country’s topnotch franchisers – from small to large, both foreign and homegrown. It is a premier event that brings together key franchise players in the domestic and international fronts and will also include sessions that focus on ASEAN integration and its impact on franchising.

It will give franchises ideas on the kind of opportunities they can take advantage of in the AEC as well as the roadblocks that will come their way. The event will also give them an idea on whether or not they have a competitive advantage in a particular field, how they can keep it, and strengthen it.

Now on its 22nd edition, the country’s longest running franchise show and widely recognized as Asia’s biggest franchise event will feature a two-day International Franchise Conference (July 16 to 17), a three-day One Stop Shop International Franchise Expo (July 18 to 20), a Certified Franchise Executive Program (July 14 to 15), and educational seminars for would-be franchisors and would-be franchisees (July 18 to 20).

For inquiries, please call the PFA Secretariat at (632) 687-0365 to 67 or (63917) 832-0732, or e-mail pfa@pfa.org.ph (general inquiries); franchiseasiaconf@pfa.org.ph (conference) or franchiseasiaexpo@pfa.org.ph (expo).

FROM ABS-CBN

Malacanang eyes P2.6-trillion 2015 budget by Jess Diaz, The Philippine Star Posted at 06/15/2014 11:30 AM | Updated as of 06/15/2014 11:30 AM

MANILA - President Aquino will most likely submit his proposed national budget for 2015 to Congress after his State of the Nation Address (SONA) on July 28.

Budget Secretary Florencio Abad has told The STAR that the administration intends to keep the tradition it has started of submitting the budget proposal to the House of Representatives and the Senate a day after the SONA.

This gives lawmakers enough time to scrutinize the proposal and approve it before yearend, he said.

The President presents his proposed spending program to Congress through his budget secretary.

Based on Abad’s memoranda to state agencies, Malacañang is eyeing a P2.606-trillion national budget for next year. The issuances contain “indicative budget ceilings.”

In his memoranda, Abad discussed the general thrusts of the planned 2015 outlay.

Through the 2015 budget program, he said the government would again try to attain inclusive growth through such programs as cash transfers to the poor, K to 12 basic education, universal healthcare and housing for squatters.

The budget would also be designed to help the government steer the economy to growth through infrastructure development, pursue good governance and anti-corruption programs and minimize disaster risks to prevent loss of life, property and livelihood, he said.

Despite last year’s succession of calamities, he said the government remains optimistic that it would attain its economic targets, on which the 2015 budget proposal is broadly based.

Next year’s planned outlay is P341 billion more than this year’s P2.265-trillion spending level.

The administration hopes to fund it with revenues projected to reach P2.337 trillion, leaving a deficit of P285.3 billion, which would be funded through borrowings.

It expects the Bureau of Internal Revenue and the Bureau of Customs to improve their collection efficiency.

Next year’s P2.337-trillion revenue target is P319 billion more than this year’s projected collections of P2.018 trillion.

The proposed budget assumes a gross national product growth of seven to eight percent, a gross domestic product expansion of 7.5 to 8.5 percent, an inflation rate of two to four percent, a peso-dollar exchange rate of P41-P44 to a dollar, and crude price of $90-$110 per barrel.

Speaker Feliciano Belmonte Jr. has assured Malacañang that the House would act expeditiously on the budget proposal it would present to lawmakers.

He said the administration should be credited for presenting the budget early enough to allow for its approval before yearend and avoid the reenactment of the previous year’s outlay.

The President, like Congress, does not want a reenacted budget, which serves as a huge Palace pork barrel, he said.

DBM releases P1.67 B for classrooms in Yolanda hit areas By Zinnia B. Dela Peña (The Philippine Star) | Updated June 15, 2014 - 12:00am 0 0 googleplus0 0

MANILA, Philippines - The Department of Budget and Management (DBM) has released P1.67 billion for the construction of 1,704 classrooms in elementary and secondary public schools in areas hit by Super Typhoon Yolanda, in line with the Aquino administration’s goal to close the nationwide classroom gap.

DBM Secretary Florencio Abad said the money was turned over to the Department of Public Works and Highways (DPWH), the agency in charge of the rebuilding of classrooms damaged by Yolanda.

“We have to make sure our students enjoy sufficient school facilities that make their campus environment more conducive to learning,” Abad said.

Of the total amount, the big chunk or P558.7 million would go to Eastern Visayas for the construction and reconstruction of 559 classrooms. Regions VI and VII would get P212.9 million and P287.3 million, respectively, for a combined target of 509 classrooms.

“Our budget for the year fully supports the needs of our education sector, as advancing quality education in the country remains a top priority. The same can be said for our post-calamity rehabilitation efforts, where we continue to ‘build back better’ and fast-track recovery in all affected areas,” Abad said.

The DBM recently released P7.35 billion for the construction of 7,136 classrooms nationwide comprising 5,916 classrooms for elementary schools and 1,220 classrooms for secondary schools.

Something scary about tax evasion DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated June 11, 2014 - 12:00am 11 159 googleplus1 2


By Boo Chanco

There was this news report last Friday here in PhilStar Business that scared me about its political implications. The government has supposedly lost an estimated P15.6 billion in taxes last year, the report said, due to illicit tobacco trade in the country.

Wow! If that report is correct, the next president could be elected by someone or some people who evade taxes or break even more serious laws. It only takes P5-6 billion to elect a president. It takes even less than that to buy other bureaucrats as well as judges and justices to get favorable rulings.

It has happened in other countries. In Latin America, the narcotics trade has spawned narco politics. The illicit drug trade is known to fund national and local politicians. That’s a scary scenario anyway you look at it.

Here, it could be tobacco today and something else more sinister soon. If they own the president and can buy off regulators and judges, they could do almost anything else from drugs to human trafficking and contract murder.

Just imagine that the failure of government to curb smuggling and tax evasion could be something more than depriving the national treasury with funds for the country’s development needs. It could be a serious security threat and may end democracy as we know it.

It is a big problem even now. Jose Alejandrino who used to be the presidential assistant for economics of FVR posted on Facebook IMF findings on how bad our smuggling situation is.

According to IMF trade statistics Joe posted, smuggling during the period July 2010 to June 2012 of the Aquino administration hit $19.6 billion, as compared to $3.8 billion during the period February 2001 to June 2010 of the Arroyo administration. This totally betrays gains we have imagined for Daang Matuwid.

US think tank Global Financial Integrity managing director Tom Cardamone thinks this surprisingly big figure is a conservative estimate and that actual values are much higher. He estimates 25 percent of the value of all goods imported into the Philippines goes undeclared.

What’s going on here? $20 billion here and P15 billion there and in the meantime the BIR wants to collect taxes from jeepney drivers and sari sari store owners and picks a fight with doctors.

This failure to collect taxes and duties has other negative effects in our economy. For instance, a recent article in the Wall Street Journal wondered why the peso has been among Asia’s weakest currencies this year when we have one of the strongest government balance sheets in Asia?

The WSJ’s answer: “One reason could be a smuggling problem that has resulted in significant irregularities in the country’s trade data. Some analysts say a proper accounting might show that the country’s current account is actually in deficit – at a time when skittish investors have been punishing developing economies that are too dependent on foreign funding.”

The WSJ pointed out that a recent report from Deutsche Bank shows a wide gap between Philippine imports and the value of exports reported by its trading partners – a gap that has grown significantly over the past two years.

According to the WSJ, Deutsche analyst Diana del Rosario sees “the Philippines’ current account posting deficits in some periods since 2012, contrary to the steady surplus suggested by data from Philippine authorities.”

A concrete example cited is trade data with China: “Philippine imports from China last year were a full 60 percent lower than Beijing’s reported exports to Manila, according to Deutsche Bank. That’s far more than can be explained by factors like valuation, timing or currency conversions, the bank said.”

Another banker cited by WSJ, Credit Suisse economist Michael Wan, reveals that while smuggling isn’t unique to the Philippines, a comparison to similar economies like Thailand and Indonesia suggests Manila’s problem is much more acute.

Mr. Wan said an accurate accounting would probably show a much smaller surplus, around two percent of GDP. The most recent government data showed a surplus of 4.96 percent as of last Dec. 31. “People who haven’t caught on to the discrepancy in the trade balance could be surprised by that,” he said. “There could be some impact on sentiment.”

The PhilStar news item on tax evasion in the illicit tobacco trade is based on a report by UK-based Oxford Economics and US-based International Tax and Investment Center. Since the study was commissioned by Philip Morris, there is a need to validate the findings by commissioning an independent audit by a reputable audit firm.

Adrian Cooper, chief executive officer at Oxford Economics, who briefed media last week, explained that the P15 billion that the BIR has not been collecting in the form of tobacco excise tax, represents what could have been a surge of 497 percent or almost sixfold from the P2.6 billion estimated in taxes lost to the illegal trade of tobacco products.

“While the administration can be pleased they have achieved a 114-percent increase in tobacco excise revenue in 2013 as a result of the new tax regime, one cannot ignore the tax foregone as a result of this very rapid growth in the illicit cigarette trade,” Cooper said.

One out of five cigarettes consumed in the country last year were illegally traded, Oxford Economics’ Cooper said.

“Without appropriate safeguards put in place… there’s a danger that the scale of tax evasion we’ve seen right now could further escalate,” Cooper said, although he declined to name brands thought to be responsible for the illicit trade of cigarettes.

Latest data from the BIR showed excise tax collections from tobacco products rose 14.22 percent to P11.34 billion in the four months to April from the same period a year ago. This figure exceeded the P10.85-billion target for the period.

The Management Association of the Philippines, the Makati Business Club and the various local and foreign chambers of commerce have also expressed concern over this problem and asked Finance Secretary Cesar Purisima for an independent audit.

The business groups are worried about unfair competition. They emphasized that “ensuring the proper implementation of our tax laws across all manufacturers is critical to the sustainability of a competitive industry, and to ensure security for the livelihoods of the more than 2.9 million individuals dependent on the tobacco sector. Given the high demands on the public sector today, we humbly suggest that this could be achieved via a third party monitoring group, working closely with the Department of Finance and its officers.

In any case, P-Noy should look into these reported evasion of taxes not only because he owes it to all the taxpayers who are paying their share. More importantly, his Daang Matuwid demands that no one is given the opportunity to buy the next election or his successor.

P-Noy should also worry that this kind of big money from someone or some people who are able to evade paying the proper taxes or duties will taint his legacy of clean government. Since the Liberal Party is the one in power, his close partymates will be suspected of benefiting from the situation.

The sooner P-Noy cleans the air on this uncollected taxes and duties, documented by the IMF and other international bodies, the better it will be for his cherished legacy of incorruptibility.

Then again too, since the complaining party is Philip Morris, a pretty influential American firm, lack of credible action will also affect bilateral relations with the US somehow. This could end up being an unfair trade issue that will cause us damage in the eyes of our international trading partners as well as sanctions.

I can’t help being amused by this situation. The local partner of Philip Morris is Fortune Tobacco of Lucio Tan, long accused by the BIR of shortchanging government of rightful taxes. Now Fortune through Philip Morris, is obligated by US laws to play it straight and presumably, is already paying the right taxes.

But they know how the game is played. The authorities must listen to them now because they know and monitor the industry well. It must pain them to see competitors doing what they have been accused of doing in the past… and seemingly getting away with it.

Property sale

Rumor has it that another senator implicated in the Napoles scam has reportedly sold his brand new house in a plush subdivision. Smart move before Sandiganbayan attaches it.

Fairy godmother

A man asked his fairy godmother to make him irresistible to women.

She turned him into a credit card.


Chief News Editor: Sol Jose Vanzi

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