Business related legislations

Aug 04, 2017

There are a few pending bills on the floor from our legislators that have caught our eye for the potentially huge impact on some sectors.

One is the proposed Energy Efficiency Law that stipulates a minimum energy performance standards system, among other things. The required mechanism in the bill and additional business-related administrative procedures have been cited by certain organizations as increasing the cost of doing business for micro, small and medium enterprises. For instance, manufacturers, importers and dealers will be required to display an energy label that will show the energy requirements and consumption efficiency of whatever products they carry. This is fine for the big boys, but micro and small enterprises are not ready to comply with this. They would need special mechanisms to measure their energy consumption and would require more logistics and expert manpower to monitor and undertake energy audits which will then be reported to the ERC. How can small exporters afford these?

The Philippine Exporters Confederation Inc. or PhilExport is the most vocal among those who take exception to this proposed legislation, noting that it will particularly hurt the small exporters. Philexport is instead calling on power distributors such asMeralco and professional organizations like the Institute of Integrated Electrical Engineers, all of whom have a wealth of technical experts, to design simple and affordable energy conservation measures and systems that can be adopted by the MSMEs. Energy conservation is a drive that we can all profit from, but perhaps the stakeholders' inputs must weigh in.

Another bill that merits a good look is the one that seeks to revoke the franchise tax exemption given to the telecommunication companies. This was granted way back when the Philippine telco industry was in its infancy stage so that the government had to boost the industry with perks under the National Internal Revenue Code of 1997. Twenty years later, the local telecommunication companies have enjoyed a duopoly that have entrenched them as among the most stable and progressive companies in the country. The demand for telco services continues to grow and legislators led by Rep. Sharon Garin no longer see the need to continue with the franchise tax exemption. In fact, Rep. Garin is proposing in House Bill 5444 which she authored the imposition of the franchise tax of 8% on the GROSS receipts of telco companies. This is in lieu of the value added tax which is computed on the telcos' earnings.

Separately, Congressman Toby Tobias of Navotas filed a measure to withdraw all tax exemptions given to these telcos, among them the exemption from Customs duties and taxes on the importation of radio and electronic telecommunication equipment.

Let's see how these two bills fare on the floor.

Convenient enterprise

The Philippine Seven Corporation is the original poster boy for franchising in the Philippines with its highly profitable 7-Eleven franchise. Their net income in 2016 was 16.6% higher, and at the end of the year, they reported having a total of 1,995 stores spread out across the country, 410 of which are new stores. In Mindanao, a big area where they used to have only 33 stores, Philippine Seven has boosted this number to 107 stores by the end of 2016. In March of this year, the company celebrated a milestone, opening their 2,000th store. They have also opened more warehouses and distribution centers to cope with their rapid expansion.

In the Philippines, convenience stores are now the fastest growing in the retail sector. Other big players have joined in, notably theFamily Mart and the old reliable Mini Stop, and I understand a few others are set to test the local waters as well. Well, the more the merrier indeed. The competition has pushed these convenience stores to improve their merchandising and their interiors, get higher quality products and offer more than what are displayed on their racks. Now, people can get quick hot meals as well, with a few tables set up inside the store for diners. See what competition can do?

Interviewed by B&L's Biz Watch recently, Philippine Seven Corporation president and CEO Victor Paterno revealed a ramped- up advertising and promotions program, and energy conservation measures in all of their stores which should benefit the 7/11 franchise holders in the long run. The company has remodelled older stores and they have added more shelves too to accommodate more products instead of letting precious space go to waste. That is forward planning and dynamism in a company that has been a market leader in their sector for such a long time. There is no room for complacency in this sector, obviously, and the company aims to hold on to that torch for as long as they can. Even their stock prices fared very well, with earnings per share increasing by 16.4 per cent.

In their aggressive expansion of their franchisees' base, Mr. Paterno said that they are looking not just for people who have money pay the franchise fee and then leave the store to the staff to run. They are looking for people who are hardworking and committed to their retail business. They are looking for dedicated franchisees who can give their time, energy and focus to make their store successful, sustainable and profitable in the long run. This ensures a franchise business' long-staying power.

Mabuhay!!! Be proud to be a Filipino.

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About the Author

Ray Butch Gamboa graduated from the College of Arts and Letters of the University of Sto. Tomas. It was a course that should have been preparatory to a law degree, but the call of broadcasting aborted his plans.

At the age of 16, while still a student, Butch tried his hand at disc jockeying, landing a job at Mareco Broadcasting Network's AM stations DZBM and DZLM. From there, Butch moved on with his illustrious career as a popular disc jockey, riding the airwaves of Bob Stewart's middle-of-the-road music at DZXX, and ending his disc jockeying career at ABS-CBN's DZYL and DZQL.

From there, he stayed on with ABS-CBN, covering live the proceedings at the Manila Stock Exchange and eventually entered into the world of television sales as an account manager for the premier channel of ABS-CBN Channel 2.

In the early 70's, at the outbreak of Martial Law, Butch was one of the thousands of professionals who woke up jobless when then President Marcos declared the new status of the nation. With the closure of ABS-CBN, Butch ventured into different fields outside of broadcast. He tried his hand and with ease and success at export (Costume jewelry), real estate (brokerage), and restaurants (fast food).

In 1987, after the revolution, with the broadcast industry back to its free state, and with its irresistible call ringing in his ears, Butch made his inevitable comeback and pioneered in a local motoring show, producing Motoring Today on Channel 4 and co-hosting with local motor sports' living legend Pocholo Ramirez.

After 4 years, he ventured into another pioneering format by producing and hosting Business & Leisure, which was originally aired on ABS-CBN's Channel 2. The format eventually espoused similar ones in other different channels. But the clones in due course faded away leaving the original staying on airing on Channel 4 and eventually on Shop TV on Sky Cable's Channel 13.

The following year, the pioneering spirit in Butch spurred him to produce another TV show, Race Weekend, also on Channel 4, covering circuit racing at the Subic International Raceway after the motor sport's hiatus of 17 years. But when similar shows with duplicated formats sprouted, he decided to give way and ended the program after a year, although still enjoying unparalleled viewership.

In 1998, when the local automotive industry was in a slump, Butch contributed his share to help the ailing industry by producing another popular motoring-related show, this time exclusive to the automobile and its industry—Auto Focus, which became a vehicle for local automotive assemblers and importers to showcase their products and dwell on the industry's latest technological developments.

In 2003, Butch teamed up with his brother, Rey Gamboa who was a former Shell executive and presently one Philippine Star's business columnist to co-produce and co-host the TV show Breaking Barriers on Channel 13. It is a talk show that features guests who are in the news and in the middle of controversies. The program ventures to draw deeper insights into current issues to learn how they impact to our daily lives.

Today, Motoring Today on its 28th year of service to the general motoring public still enjoys its unprecedented loyal vierwership nationwide while Auto Focus, after 16 years has firmly established its niche viewership among automobile enthusiasts and on the other hand Business & Leisure is on its 24th year dishing out current business issues and lifestyle features.

Today, aside from writing weekly columns for the Philippine Star (Motoring Today on Wednesdays and Business & Leisure on Saturdays) and executive producer / host of weekly TV shows (Motoring Today, airs Sundays on Solar Sports Channel 70, Business & Leisure, airs Tuesdays on Shop TV, Sky Cable Channel 13 and Auto Focus airs Thursdays on Shop TV, Sky Cable Channel 13, Ray Butch Gamboa is currently the Chairman and CEO of Sunshine Television Production and Marketing Services Corp., President of Gamcor Management and Development Corp., Chairman of Asia-Pacific Realty Corporation, President and Chairman of Socio-Communication Foundation for Asia and Founding Chairman of the Society of Phil. Motoring Journalists (SPMJ)