JEDDAH, 12 August — Overseas Filipino Workers who have not yet imbibed the practice of saving their earnings should start doing it now before it’s too late.
This advise comes from Ambassador Bahnarim Guinomla, who urged OFWs to learn from the sad experience of many OFWs who return home without any savings to speak of.
And for those who have more money to spare or those who wish to become entrepreneurs, he said they may consider going into the franchising business.
"Talk among yourselves to form an association where you can invest in franchising business in the Philippines," he said in a keynote speech during the 1st Investment Seminar for OFW’s at the Al-Harithy Hotel last Friday.
The seminar was organized by the Overseas Filipino Workers Cooperative Council (OFWCC) in cooperation with the Philippine Consulate.
Guinomla’s challenge followed a presentation by Emy de Guzman, the general manager of Skyfreight Forwarders, who explained why franchising is the most viable business opportunity for OFW’s today.
Guinomla pointed out that if about 30 OFWs band together and contribute just SR1,000 each, they would already have sufficient funds to start a franchise of either Mister Donut or Goto King.
Franchising is a method of doing business where the buyer (the franchisee) runs a business by using the system and the trademark of the seller (the franchiser).
He further said that by investing, the group would become the "pioneering group of investors in line with President Arroyo’s call for OFW’s to become investors."
Hammering further his message of saving, Guinomla challenged those in attendance and OFW’s in general to "generate additional savings by cutting on social activities." He said this does not necessarily mean that OFW’s should stop socializing with friends, but they should cut on unnecessary expenses like extravagant spending during fiestas and other festivities.
Current statistics available showed that 70-80 percent of OFW’s are still unable to save and invest in preparation to go home to the Philippines.
One of the reasons for these, as many OFWs themselves agree, is the tendency of Filipinos to overspend on appliances and other items that they don’t really need.
Less risk
In his own lecture, de Guzman said franchising is best suited for OFW’s because of so many practical reasons.
One is that it minimizes the risk of business failure because through the years of running the business, the franchiser has ironed out potential problem areas.
According to the Philippe Franchise Association, "a franchised business is three time more likely to succeed as compared to setting up from square one."
Another benefit of franchising is saving cost on advertising because the product is already known in the market and advertising costs are pooled with other franchisees.
Moreover, the franchiser provides the franchisee trained staff and managerial help and operational support.
De Guzman said that franchising is open to all Filipinos but is best suited for OFW’s because they already have the capital. The government agency tasked in helping OFW’s in engaging in this type of business is the Philippine International Trading Center (PITC) with their program Order Negosyo (www.ordernegosyo.com).
What PITC will do is match any Filipino or OFW with the franchise business that meets their capital. This agency can also help identify financing packages that can help those needing more capital.
Any entrepreneur, if he decides to invest in franchising, can choose between "food" and "non-food" categories, for as low as two hundred thousand pesos capital. Food categories include, Candy Corner, Potato Corner, Mister Donut, Goto King, Bread Connection, Monterey among many other known brands. The other category, non-food, include apparel manufacturer Bench, Business Box, Kamerworld, Aqua Vida, Bench, Toby’s Sport, etc.
De Guzman, however, cautioned would-be businessmen that the first and foremost requirement for any business to succeed is location.
"Even if you have the money but do not have a good location, it is unlikely that the business will succeed," he said.
To make sure an investor has the proper location, PITC will help in assessing the location of the business (if you already have a location), and will present pre-assessed locations if there is none! These pre-assessed locations had been assessed using rigid criteria like traffic, accessibility, proximity, etc.
An OFW who wishes to go into franchising has to send a letter of intent to the PITC to start with. According to de Guzman, it will take two weeks for the PITC to process such letter of intent and start the ball rolling.
To potential businessmen, de Guzman has an advice, "Run your business by heart and not by mind." He said that when you run your business by heart you take care of your employees. When you take care of your employees — "fill their stomachs, they will work for you."
Where can OFWs turn to?
For enterprising OFW’s who are raring to invest their money, the irony is that there is little help available. OFW’s have to fend for themselves, although the Philippine Consulate is ready to vouch for their character when they apply here to avail of the Order Negosyo.
With the backing of the consulate, the government now becomes the agent of the OFW, helping in processing the documents.
There is no special treatment, however, unlike Non-Residents Indians (NRI), for example, who enjoy "lower" interest rates when they borrow from banks.
Paisal D. Abdullah, the Philippine commercial representative in the Western Region, even admitted that OFWs do not get any preferential treatment because investment laws were enacted to lure foreign investors who can inject direct investment to the country in terms of millions of dollars.
He said laws have to be legislated to favor OFW’s and encourage them to invest in the Philippines to realize their role in the economic development of the country.
For its part, OWWA can give assistance to OFW’s with its Entrepreneurship Progam. Under this program, OFW’s and their dependents can borrow money, depending on the type of business they will put up. To be able to borrow more money from OWWA, Welfare Officer Mustapha Glang suggested that OFW’s form cooperatives. Under the present set-up, each member of the cooperative can borrow up to fifty thousand pesos each compared to 100,000 for an individual OFW.
Whether the OWWA has the wherewithal at present to provide loans is another question those in Manila should answer, considering that more than 1 billion pesos of the fund had been placed in bad investments.
What is assured, as per Glang explanation, is that OWWA will an interest of only 9 percent per year. Asked if this can further lowered, Glang said that it is the lowest rate available. The interest rate used to be as high as 13 percent.
An interesting question cropped up during the seminar. One participant asked what kind of help and up to what extent will OWWA help an ex-OFW.
Glang said that OWWA extends help to an ex-OFW "hanggang kailangan niya ng tulong." Participants of the seminar took the statement in hushed silence but some said they would like to find out if it’s true.
Some perks for OFW’s
It is not completely dreary for OFW’s. Ambassador Guinomla declared that there may not be an express lane for OFW’s for processing of their passports in the Department of Foreign Affairs, or lowered interest rates when they borrow money from banks, but the embassy in Riyadh guarantees that if all documents are valid and complete, it will just take 30 minutes to process a passport.
He said there is now in the works a plan to implement a Machine Readable Passport and Visa (MRPV) hopefully by next year. This new technology will eliminate long queues, reduce processing time and most of all, reduce or eliminate forgery.
As usual, the ambassador reminded OFW’s that the big hindrance to implementing government programs is scarcity of resources.
Other speakers during the seminar were Gil Martos, former president of PICPA, who spoke about the importance of feasibility studies in putting up a business, and Manolo Carandang of the PNB, who spoke about the role banks in financing a business.
Consul General Kadatuan P. Usop wrapped up the seminar by leading the distribution of certificate of attendance to participants and plaques of appreciation to resource speakers.
Participant Jerry Calixto said: By attending this seminar, I’ve learned which agency to approach."
"The seminar was very informative. We are expecting that after six months there will be another seminar to delve into other topics as a follow-up to this one," added Alex Binal.
