Visiting El Nido on a Shoestring Budget

Picture this: you wake up one early morning to the gentle waves of the sea lapping at the shoreline, its monotony broken only by occasional barking of dogs from a distance. You get out of bed and peer out of your window to see karsts formations, like giant mammoths, jutting out of the bay. The clear, blue waters meet the cloudless blue skies. Your cozy cottage itself is under the shadow of a limestone cliff.

Welcome to El Nido. Located north of Palawan’s capital city, Puerto Princesa (“Puerto”), it is home to karsts mountains and cliffs, isolated islands/islets of various shapes and sizes (e.g., “snake island”), a cavernous cave named the “cathedral,” and white sandy beaches.

A paradise on earth if there is one, but the general impression is it may be too expensive to enjoy. It is not entirely true. Such impression must have been brought about by the presence of 2 exclusive resorts located in the islands off the town proper, with their customers serviced by chartered planes straight from Manila. Now, a package tour of that nature is really way beyond the ordinary folks’ means.

But as Filipinos are always wont to do, may diskarte dyan. (Disclaimer: Please bear with me as this is a recollection of our trip 2 summers ago, so names of places and prices of services may be inaccurate if not forgotten.)

There are several flights each day between Manila and Puerto. Get the budget carriers (Php900/head, 1-way via Zest Air. NB: I checked this 1 earlier). Stay for a day or 2 in Puerto, and visit the Underground River and the market. Ask a tricycle driver to bring you to a restaurant serving delicious but affordable sea food fares or Vietnamese dishes. (They abound.)

Once fully rested, the same tricycle driver can take you to the terminal of vans and minibuses going to northern Palawan, including El Nido. Only a few local passengers go all the way to El Nido. Most passengers alight in Roxas and Taytay towns. You can convince the van driver that you’re willing to pay him for a minimum of 5 passengers (Php500/head) to El Nido. The van is airconditioned and the road all the way to Taytay (the last town before El Nido) is paved. Travel time is 6-7 hours.

In El Nido, affordable resorts dot the beach. Fernandez’s resort is among them. Family cottage with fan costs Php500 a day. In the market, Aling Pacing’s small restaurant serves fresh seafood and meat dishes of less than Php100 per order. To truly enjoy El Nido, you can hire a boat from Mang Digoy for Php3,500 for the whole day, including lunch in a secluded island.

He will take you to lagoons ideal for snorkeling, what with corals teeming with fish and other marine animals, and the aforementioned snake island and cathedral cave, among others. Cap your day with a beer or wine from a European resto-bar south of El Nido beach.

You can return home straight from El Nido through a previously booked flight via Seair (Php6,000-Php7,000/head). Or you can retrace your steps and fly back via Puerto.

(PS: A friend who owns a beach in El Nido has asked for my help. He's selling his property and in case you're interested, please visit this site: http://www.sulit.com.ph/index.php/view+classifieds/id/4540780/recent/1/EL+NIDO+BEACH) 

Alien Employment Permit (AEP) is a Must for Expats Seeking Employment in the Philippines

For aliens/foreigners desiring to work in the Philippines, it is important to remember that aside from obtaining a working visa, they must also ensure that they have a valid alien employment permit (AEP) before they start working. Otherwise, they run the risk of facing serious legal consequences.

Under the law, the following shall apply for Alien Employment Permit (AEP):

1. All foreign nationals seeking admission to the Philippines for the purpose of employment;

2. Missionaries or religious workers who intend to engage in gainful employment;

3. Holders of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or Special Non-immigrant Visa (47(a)2), who occupy any executive, advisory, supervisory, or technical position in any establishment;

4. Agencies, organizations or individuals whether public or private, who secure the services of foreign professionals to practice their professions in the Philippines in the Philippines under reciprocity and other international agreements;

5. Non-Indo-Chinese Refugees who are asylum seekers and given refugee status by the United Nations High Commissioner on Refugees (UNHCR) or the Department of Justice under DOJ Department Order No. 94, series of 1998; and

6. Resident foreign nationals seeking employment in the Philippines.

In a March 2010 Supreme Court decision involving an alien employee with no valid alien employment permit who complained of illegal dismissal, it declared that to grant such alien’s prayer is to sanction violations of Philippine labor laws requiring aliens to secure employment permit before employment. The Supreme Court said it must leave the parties where they are, thus --

The law and the rules are consistent in stating that the employment permit must be acquired prior to employment. The Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor." Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides:

Employment permit required for entry. —

No alien seeking employment, whether as a resident or non-resident, may enter the Philippines without first securing an employment permit from the Ministry. If an alien enters the country under a non-working visa and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit.

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the status quo must prevail in the present case and we leave the parties where they are. This ruling, however, does not bar Galera from seeking relief from other jurisdictions. (From the consolidated Galera cases.)

For the requirements, you may visit: http://www.dole.gov.ph/fndr/bong/files/AEPChecklist.pdf

Maj. Gen. Garcia's Plunder Case and the Plea Bargaining Agreement (My Two Cents' Worth)

Much has been said and written about the plunder case and the plea bargaining deal by former AFP Deputy Chief of Staff for Comptrollership, Maj. Gen. Carlos Garcia.

The question now is, who is the proper authority to question Garcia’s pleading to a lesser offense? What are the requirements for a valid and effective plea?

Under Rule 116 of Criminal Procedure: Section 2. Plea of guilty to a lesser offense. — At arraignment, the accused, with the consent of the offended party and the prosecutor, may be allowed by the trial court to plead guilty to a lesser offense which is necessarily included in the offense charged. After arraignment but before trial, the accused may still be allowed to plead guilty to said lesser offense after withdrawing his plea of not guilty. No amendment of the complaint or information is necessary.

It bears stressing that trial has already started in Garcia’s case, with Heidi Mendoza, formerly of COA, as well as other witnesses, testifying for the State.

The Supreme Court in Rodriguez vs. Gadiane, et. al., reiterated its ruling in People vs. Santiago that –

It is well-settled that in criminal cases where the offended party is the State, the interest of the private complainant or the private offended party is limited to the civil liability. Thus, in the prosecution of the offense, the complainant's role is limited to that of a witness for the prosecution. If a criminal case is dismissed by the trial court or if there is an acquittal, an appeal therefrom on the criminal aspect may be undertaken only by the State through the Solicitor General (OSG). Only the Solicitor General may represent the People of the Philippines on appeal.

On the other hand, the Ombudsman Act (RA 6770) provides that the Ombudsman has the power to: Investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained wealth amassed after February 25, 1986 and the prosecution of the parties involved therein. (Section 15, par. 11)

The case is not yet on appeal, as the plea bargaining agreement is still subject to the determination for approval or disapproval by the Sandiganbayan.

In a plea to a lesser offense, it is important to note that consent of the offended party and the approval of the trial court must be obtained. Otherwise, the accused cannot claim double jeopardy should he be charged anew with the graver offense subject of the original complaint or information. (Regalado)

In Garcia’s case, the prosecutor is the Ombudsman and the offended party is the Government, particularly the Armed Forces of the Philippines (AFP).

The AFP has already announced that it did not and will not give its consent to the plea bargaining agreement, a position supported by the OSG. How will the Sandiganbayan rule on the issue? Abangan. (Let's wait and see.)

Cely’s Carinderia: One of San Fernando, Pampanga’s Best-Kept Secrets

If you happen to be fond of exotic foods such as adobong kamaru, ginataang kuhol, broiled catfish, and/or typical Filipino dishes such as bulalo, dinuguan, chicharong bulaklak, steamed veggies with buro (pangontra sa taba), and want them cheap and yummy, then you must visit Cely’s Carinderia in San Fernando, Pampanga.

It may be out of the radar of gourmets and connoisseurs, but among the blue-collar workers, government employees and students in the San Fernando, Pampanga area, it is one of the most crowded places, especially during lunchtime.

But service is quite fast. As you sit down after pointing at your orders, turo-turo style, right in front, you get boiling hot cups of soup. Before finishing your soup, all your orders are served almost simultaneously. Meaning, hindi ka mabibitin. Don’t worry about perspiring at noon with those piping-hot dishes, the inner quarter of Cely’s is airconditioned. The bulalo is superb and heavenly, better than Josephine’s, ATS, or Leslie’s in Tagaytay. The bone marrow is dripping and with tendons wrapped around the bones.

For all those orders mentioned above plus enough cups of rice to feed a family of six, including 1.5 liters of Coca-Cola (with ice), you get to pay Php750.00, more or less. A policeman, a driver, and a lawyer have more than enough. :-) The waitress will compute your bill right in front of you as she checks your orders.

Cely’s Carinderia is in Lazatin Ave., going to Angeles City.

For petition for nullity of marriage based on psychological incapacity, would a psychologist or psychiatrist still be necessary?

In a petition for nullity of marriage, is it mandatory that the person alleged to be psychologically incapacitated be personally examined by a psychologist or psychiatrist?

In one case, the petitioner claimed that the totality of the evidence was enough to prove the psychological incapacity of respondent; hence, according to him, the guidelines enunciated in Molina case, specifically its directive that the root cause of the psychological incapacity must be identified as a psychological illness and its incapacitating nature fully explained, and that it must be proven to be existing at the inception of the marriage, need not be strictly complied with.

The Supreme Court took pains to explain that the totality of evidence is not enough. Such must still prove the gravity, root cause, incurability and the fact that the psychological incapacity existed prior to or at the time of celebration of the marriage.

To quote the Supreme Court in the 2008 case of Bier vs. Bier, et. al.:

"The trial court apparently overlooked the fact that this Court has been consistent in holding that if a petition for nullity based on psychological incapacity is to be given due course, its gravity, root cause, incurability and the fact that it existed prior to or at the time of celebration of the marriage must always be proved. As early as Santos v. CA, et al., we already held that:

[P]sychological incapacity must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability. The incapacity must be grave or serious such that the party would be incapable of carrying out the ordinary duties required in marriage; it must be rooted in the history of the party antedating the marriage, although the overt manifestations may emerge only after the marriage; and it must be incurable or, even if it were otherwise, the cure would be beyond the means of the party involved.

xxx This psychologic condition must exist at the time the marriage is celebrated.
xxx (Emphasis supplied)

These must be strictly complied with as the granting of a petition for nullity of marriage based on psychological incapacity must be confined only to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. This is specially so since the Family Code does not define psychological incapacity. The determination thereof is left solely to the discretion of the courts and must be made on a case-to-case basis.

Also, even if Molina was never meant to be a checklist of the requirements in deciding cases involving Article 36 (psychological incapacity) of the Family Code, a showing of the gravity, juridical antecedence and incurability of the party's psychological incapacity and its existence at the inception of the marriage cannot be dispensed with. In Marcos v. Marcos (Marcos), a case cited by petitioner to support his argument that the totality of evidence presented was enough to prove the existence of respondent's psychological incapacity, this Court reiterated that:

The [Molina] guidelines incorporate the three basic requirements earlier mandated by the Court in Santos v. Court of Appeals: "psychological incapacity must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability. The foregoing guidelines do not require that a physician examine the person to be declared psychologically incapacitated. In fact, the root cause may be "medically or clinically identified." What is important is the presence of evidence that can adequately establish the party's psychological condition. For indeed, if the totality of evidence presented is enough to sustain a finding of psychological incapacity, then actual medical examination of the person concerned need not be resorted to.

xxx xxx xxx

[t]he totality of his acts does not lead to a conclusion of psychological incapacity on his part. There is absolutely no showing that his "defects" were already present at the inception of the marriage or that they are incurable. (Emphasis supplied)

Furthermore, the 2005 case of Republic v. Iyoy held that even if Marcos (2000) relaxed the rules such that the personal examination of the party alleged to be psychologically incapacitated by a psychiatrist or psychologist is no longer mandatory for the declaration of nullity of the marriage under Article 36 of the Family Code, the totality of evidence must still prove the gravity, juridical antecedence and incurability of the alleged psychological incapacity. Failure in this regard will spell the failure of the petition.

From the foregoing, one can conclude that petitioner's insistence that Marcos effectively overturned the need to present evidence on the aforesaid requirements has no merit. Thus, unless the law itself or the Court provides otherwise, these requirements must be established before a petition for nullity of the marriage based on psychological incapacity can be granted.

We hold that the trial court's decision to declare the parties' marriage void ab initio by reason of respondent's psychological incapacity was clearly and manifestly erroneous as it overlooked the need to show the gravity, root cause and incurability of respondent's psychological incapacity and that it was already present at the inception of the marriage."

As a practical and prudent solution then, and in order to satisfactorily convince the court of the gravity, root cause and incurability of respondent's psychological incapacity and that it was already present at the inception of the marriage, a personal examination of the party alleged to be psychologically incapacitated, by a psychiatrist or psychologist, must still be presented and offered by the petitioner.

Grounds for valid dismissal of employees in the private sector – just causes

Dismissing employees can be one of the more stressful, tricky and least wanted jobs a managerial employee faces, especially if and when not performed properly. You have to make sure that you are doing the right thing, in the right manner, regardless of the consequences. Oftentimes, mishandling of an administrative investigation and the expected imposition of dismissal result to the filing of a labor case for illegal dismissal, and claims for benefits and damages, by the aggrieved employee against the employer and the managers/supervisors concerned.

Not that the employer is helpless in this situation. On the contrary, in a case, the Supreme Court has reiterated that the right of an employer to regulate all aspects of employment is well settled. This right, aptly called management prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In general, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.

In another case, the Supreme Court said that while it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer.

However, such dismissal must have been effected for a just cause according to law, and with due process properly observed.

The Labor Code provides for just causes of termination of employees, to wit: (a) serious misconduct or willful disobedience; (b) gross and habitual neglect; (c) fraud or willful breach of trust; (d) commission of a crime or offense; and (e) analogous cases. Philippine law and jurisprudence have defined said causes --

Serious misconduct refers to improper or wrong conduct, in connection with the employee’s work. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant.

Willful disobedience consists of (1) the employee’s assailed conduct must be willful or intentional, the willfulness characterized by a wrongful or perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged or discharged.

Gross negligence is negligence characterized by want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected.

Fraud is any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another.

Breach of trust refers to the violation by the employee of the trust and confidence reposed in him by his employer or duly authorized representative. It is important that the employee concerned holds a position of trust and confidence or is routinely charged with the care and custody of the employer’s money or property. Moreover, the breach must be related to the performance of the employee’s function.

While commission of a crime or offense against the person of his employer or any immediate member of his family is self-explanatory, analogous causes run the gamut of instances arising from the voluntary and/or willful acts of the employee, such as unpleasant deportment and unreasonable behavior, gross inefficiency, conflict of interest, among others.

Compliance with procedural due process requires that the employer provide the erring employee with a formal (written) notice of the specific charges against him. He must be required to answer said charges also in writing. And that after due investigation and deliberation, the employer must furnish him with a formal (written) notice of termination. This process is mandatory, and failure to comply with the requirements taints the dismissal with illegality.

Traveling as a Learning Tool for Kids: Or Why We Take Joaquin and Enrique to Out-of-Town Trips

My wife (Gina) and I are passionate believers of the philosophy that children’s education is not confined within the four walls of the classroom.

With our modest means we strive to provide our kids, Joaquin (aka Vito, 7 y.o.) and Enrique (aka Manu, 6 y.o.), with learning experiences earned through traveling. So much so perhaps that Joaquin has developed a love for airplanes and flying. Enrique is into nice, comfy hotels, not necessarily luxurious, as long as there is wi-fi (tsk, internet games).

Joaquin first went to Cebu City and Bohol as a toddler, while Enrique was even younger, being a 4-month old baby. We ate dinner at a “sutukil” eatery near Mactan Shrine, while my left hand was cradling a baby, until a waiter volunteered to carry him. (According to http://living.cebunetwork.com/article/sutukil-fresh-seafood-mactan-island/, sutukil is a portmanteau of the three ways fish are cooked in eateries near the Mactan Shrine: Su is for sugba or grilled, tu is for tula or prepared into a soup and kil is for kilaw or turned into a raw fish salad.) 

Joaquin ran around the Hilltop and stopped at the iron bell which according to our Cebuana friend, was rung "once for firm partnership, twice for lasting friendship or three times for never-ending love." We boarded the raft in Loboc River in Bohol, and were promptly serenaded by a fine folk musician, and whose songs Joaquin serenely thought were a lullaby – he slept through it all. He climbed the steps all the way up the view deck of Chocolate Hills, where Enrique was befriended (through her Lola) by a cute baby girl.

Our boys have been twice to Cebu since, the last time via Dumaguete. In Dumaguete, the boys enjoyed going around town in a tricycle and playing with local kids at Rizal Boulevard, which was facing the bay. Then we were off to Sumilon Island via an outrigger boat. They tried kayaking in a lagoon while in Sumilon and basked on the infinity pool. We went to Cebu City in an ordinary Ceres bus, marveling at the views of the sea from the right side. In Cebu City, they revisited Fort San Pedro and rode the cannons, cowboy-style, did a bit of shopping at Colon St., and visited the oldest house in the city.

Twice as well, our boys have been to Boracay. Gina and I sought out marriage blessing in a Catholic church there, officiated by a very friendly and warm parish priest, Fr. Magloire.

In Davao City, the boys went to the Philippine Eagle Center, said “hi” to Pag-asa and other eagles, and posed for a picture with a young sea hawk. On the way there, we also dropped by Malagos Garden Resort. We took time to see Samal Island, just lazing around in a resort and with the boys playing ping-pong for the first time.

The boys have also been to Donsol in Sorsogon, caught a glimpse of the whale sharks, and had a night tour of a river where trees on both sides were teeming with fireflies. To think that it was even full moon at that time. They climbed Lignon Hill in Legaspi City, early one cloudless morning, and had a magnificent view of Mt. Mayon on one side, and the airport on the other. Of course, they have been to Cagsawa as well. Bicol is a favorite place because Gina’s from Albay.

When we went to Palawan, the boys toured the St. Paul Subterranean River in Puerto Princesa, and discovered the difference between stalactites and stalagmites. While there, I hired a van for the 7-hour ride to El Nido, where the boys went on an island-hopping tour, and had lunch at an isolated island. I brought them to a small piece of beach-front property that we purchased when Joaquin was just a few months old. Then off to Manila via a very tiny, noisy plane.

In Tagaytay, the boys would enjoy steaming bowls of "bulalo" (stewed beef shanks and marrow bones), fried chicken or cheese pizza, from a restaurant on a ridge overlooking Taal Lake, and with the volcano’s caldera also visible. They had paid a visit to the Caleruega Church, too.

For them, Manila is Ocean Park, Nido Science Discovery Center (they would not leave the flight simulator), the playgrounds and fountains at Bonifacio High St., Fully Booked (especially the one at The Fort), and the Fun Ranch at Tiendesitas (especially the race cars for Enrique, and the bumper boats for Joaquin).

It was in Pagudpud, Ilocos Norte, where the boys had to trek for an hour to reach a waterfall -- climbing hills, crossing a stream and walking through footpaths softened by carabaos. They had a blast while we were meandering along the Patapat Viaduct.

During the last time that the boys went to Baguio for a New Year celebration, they visited the strawberry farms in La Trinidad and the Tam-awan Village in Asin Road, had late lunch at Café by the Ruins, and went around Camp John Hay. On a previous trip to Baguio, they went to the Philippine Military Academy (PMA), touched the Howitzers and other artillery pieces, climbed the tanks and armored cars. Oh, Joaquin was just a baby and Enrique was just a bump in his mom’s tummy when they first visited the City of Pines.

Sagada, Banaue and Batanes are next in the itinerary of the places that we would like to visit in the Philippines. While Gina and I want to show Joaquin and Enrique our heritage, our rich natural beauty, our pride as a people and a nation, we would like to instill in them the sense of adventure, discipline, and trust with one’s self and other people, among others - through traveling. Hopefully, it also helps form a stronger bond among us, even as we encourage the boys' sense of wonder and wanderlust.

Gladly, it is easier to travel now that the boys are getting older. They are getting more independent, and their luggage would not include too many bottles of distilled water, packs of diapers, and milk boxes, anymore. I remember the time, not so long ago, when I was dragging a large, heavy suitcase with my right hand, and carrying a restless toddler with my left, while going down the stairs of the Hong Kong MTR. Man, I felt like my left arm was about to be torn apart! But that, and other experiences, especially of our travels abroad, as they say, would be another story.

Creative and innovative ways of developing and managing your real estate portfolio

Real estate owners and developers in the Philippines may take a look at and consider co-development agreements as an efficient and creative way of developing and managing their land bank, even as such agreements also point to inexhaustible sources of funds (both local and foreign), and without risking the potential loss of the property from their hands. Funding, operation and control of businesses may be amply addressed by this kind of arrangement. Excerpts:

MEMORANDUM OF AGREEMENT

FOR CO-DEVELOPMENT

KNOW ALL MEN BY THESE PRESENTS:

This Memorandum of Agreement for Co-Development made and entered into by and between: 

__________________________ (hereinafter referred to as “____________”), a corporation duly organized and existing under and by virtue of the laws of the Republic of Philippines, with principal place of business located at _______________________, Philippines, represented herein by its President __________________, of legal age, Filipino citizen, married;   

- and -

__________________________ (hereinafter referred to as “____________”), of legal age, ________________ citizen, ________________ , with business address at _________________________________________________________;

WITNESSETH, That:

           

Whereas, _________________, by virtue of the Lease Agreement (“Lease”) it entered into with ___________________ (“___________”), has leasehold rights over a _________-hectare parcel of land located at ___________________________, said property identified  under the Lease and is known as ______________________;

            Whereas, ____________ is obliged to develop the _____________ pursuant to its commitment under the Lease;

            Whereas, _________________________ having the necessary capability and the required funds, offered to develop and/or finance the development of a portion of _________________, which offer ___________has accepted;

            NOW THEREFORE, for and in consideration of the covenants and stipulations, terms and conditions herein contained, the parties have agreed as follows:

1.      ________________________ , for a minimum budget of Five Million Pesos (Php5,000,000.00), shall cause the development and finance the construction of _______________, fully furnished, complete with landscaping, pathways, private fences, water system (septic tanks and other applicable accessories), electrical facilities, which will have a separate entrance to ___________ area (hereinafter referred to as the “Project.”) The specifications are as follows:

 xxx

The units and related facilities and amenities shall be built in accordance with the drawings, plans and specifications submitted by ____________________ to _________ which shall approve the same and have the right of inspection and visitation anytime during the construction.

2.      ___________ shall allow _______________________  to take actual physical possession of a _____________-square meter (_____-sq.m.) portion of _______________, solely for purposes of construction. The sketch map of its location within _____________ shall be provided by ____________.

3.      ____________________ shall construct those enumerated in par. 2, i.e., the Project, in accordance with the terms and conditions set forth under the Lease, and with the laws, ordinances, rules and regulations of the City pertinent to building of structures.

4.      ________________, at __________________ ‘s expense, shall secure all the necessary clearances, approval and/or permits from the City, the power, water and telecommunication supplies from _________________________, respectively.

  

5. ____________________ binds itself to finish the construction within _____ days, counted from the date of signing of this Agreement, xxx

Business franchising among small and medium scale enterprises (SMEs) in the Philippines

Lately, there has been a boom in the franchising of businesses in the Philippines, even among small and medium scale enterprises (SMEs). When handled properly, franchising a business from the point of view of the franchisor is a sure-fire and high-yielding way of generating huge returns on investments and business expansion. While for the franchisee, it guarantees a relatively safe business model that may bring about above-average income. A friend with a thriving travel agency recently asked me to draft a franchise agreement for him. Just for some ideas and owing to space constraints, the first pages (with some details deleted/edited) are shown below:

FRANCHISE AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Agreement made and executed by and between:

_________________, a single proprietorship duly registered and existing under Philippine laws with principal office at ____________________, represented herein by its owner, _________________, Filipino citizen, married, of legal age, hereinafter referred to as the FIRST PARTY.

- and -

_________________, a single proprietorship duly registered and existing under Philippine laws with principal office at ___________________, represented herein by its owner, ____________________, Filipino citizen, single, of legal age, hereinafter referred to as the SECOND PARTY.

WHEREAS, the FIRST PARTY is a duly registered business entity under the laws of the Republic of the Philippines and is engaged in the business of selling/reselling and issuing domestic and international air passenger tickets, ship and ferry passenger tickets, bus trips, resort and hotel bookings, theme park and adventure park tickets, package tours, and all other travel trade services.

WHEREAS, the FIRST PARTY has developed innovative unique methods of merchandising, promotion, quality control and distribution of said products and services.

WHEREAS, the SECOND PARTY is interested and has sought FIRST PARTY to enter into a Franchise Agreement with the latter and set a franchise outlet particularly described as follows:

Franchise: ___________________________

according to the preferred area of the SECOND PARTY who has secured the availability of the desired commercial area;

NOW, THEREFORE, for and in consideration of the foregoing premises, the parties have agreed to strictly comply with the following terms and conditions, to wit:

1. The FIRST PARTY hereby awards the Franchise Rights to the SECOND PARTY commencing on the signing thereof.

2. Franchise fee – The Franchise Fee shall be TWO HUNDRED FIFTY THOUSAND PESOS (Php 250,000.00) for the establishment and operation of one (1) Franchise Outlet, to be paid by installments, as already stipulated in an earlier agreement (i.e., the memorandum of agreement dated ____________ which shall form an integral part of this Agreement and hereto attached as Appendix A) between the parties. Further, business consultation shall be included in the Franchise Fee, which is non-refundable.

3. Duration – This Agreement shall be effective for a period of five (5) years. The commencement of the period shall be reckoned from the date of the signing of this Agreement. This Agreement may be renewed subject to payment of fifty percent (50%) of the Franchise Fee’s prevailing market rate at the time of renewal.

4. Exclusivity of Franchise Location –The FIRST PARTY shall not set-up another Franchise outlet within _____________. Provided, that, the SECOND PARTY, his relatives/family members within the third civil degree of consanguinity or affinity, shall not engage in a similar business that might be competitive or in conflict with the franchise in said franchise location during the effectivity of this Agreement, and within three (3) years after the expiration of the term of this Agreement.xxx

Why do I write?

This is one story I have to write fast and furiously before I begin to fail from remembering; before this story loses its purpose and meaning.

For our thesis, our adviser asked us to write an exposition on the question, “Why do I write?” – as an introduction to the body of literary works we had produced that we deemed worthy of compiling into a book, our thesis. I was a Creative Writing major in UP Diliman.

Trying to figure out exactly why I was writing at that time wasn’t easy, for UP, apart from being a hotbed of activism then (as now), was also ( I would presume) a haven for lovesick, romantic fellows.

All the literary theories I had passably learned from my Comparative Literature classes (e.g., deconstruction, Marxism, feminism, realism), collided with my experiences as a naïve and poor probinsyano from the boondocks of Sierra Madre; a cynic activist silently raging mad against the ruling class and the bourgeoisie; a struggling working student enamored with writing and literature; a Piscean creature of love and other passions (to borrow loosely from Gabriel Garcia Marquez, who, incidentally, was also born on March 6 – my birthday).     

Why do I write then?

This was a question that preoccupied my last semester as a graduating student of the College of Arts and Letters (CAL), and as a dormer in Narra Residence Hall, until the summer of ’93 when my dreamy concentration was suddenly pierced by an unwanted circumstance. For some reasons (mainly to flush out delinquent, read: non-paying, Narrehans, I guess), one scorching March day, our good dorm manager, whose name I will withhold (may he rest in peace), decided to literally padlock and bar all the dorm’s main doors (paging Narrehans: the main door to the lobby and those that connected the corridors of our square-ish dorm), and turn-off the main electric switch at the end of the day. It was bedlam – boys and their stuff, mostly in big cigarette boxes, crowding the lobby and hallways, all eager to leave at once.  

While this was going on in mid-day, I rose up from typing from a borrowed personal computer, and had the presence of mind to run to the Faculty Center (FC) and report to my thesis adviser this rather unfortunate event, afraid that I might not be able to submit my thesis on time and get a good grade.

It was brief. Taking a deep breath, I said, “Ma’am, I may be delayed with the submission of my thesis.” She asked me why. Trying to be cool and relaxed, I told her about my dorm being barred and padlocked at that time; that I had to pack up and haul my personal things, and look for a boarding house elsewhere. She looked at me - skinny, disheveled, obviously devoid of sleep - and said it was okay. As I was about to leave, I saw her fish out something from her wallet (or bag, I can’t remember now), went to me and clasped my hand with (later I found out to be) a 500 peso bill. Knowing it was money, I was embarrassed and I tried to refuse. She persisted without showing so much emotion behind her glasses. She was calm and much cooler than I thought! Actually, I didn’t have anything in my pocket at that time, and I didn’t know where to stay come nighttime. I walked along University Avenue towards the dorm with my eyes misty.

Her goodness didn’t end there. Soon after, she gave me a grade, high enough to maintain my general weighted average (GWA) for Latin honors. I was able to graduate on time, I received my diploma and medal, and went on to the UP College of Law the following academic year.

At present, I am blessed with a beautiful, loving and understanding wife; two bright and handsome boys aged 6 and 7; and a modest law practice at one of the fastest growing cities in Central Luzon. Now I share with my family a decent life, quite far from my life as a struggling student who started working while in my sophomore year in undergrad until I obtained my law degree.

Yet, sometimes, I would look back alone, or reminisce with a few close friends, about my thesis adviser who played a pivotal role in my life. We hardly knew each other, but the goodness of her heart seemed to know no boundaries or strangers. What would have happened if she failed me, or graded me with an incomplete? The money, of course, went a long way. “Pay it forward, hansam (handsome, hehe.)” “Go back and visit her.” “Write about it.”

As a lawyer and a former iskolar ng bayan, I strive in my own little ways to pay back and pay it forward. I wouldn’t brag about it, but it all starts with how we treat people, particularly the ordinary folks, with fairness and respect; and how we conduct ourselves and live simply and honorably. Caught with tasks both serious and mundane, I haven’t been able to visit her. I am writing now realizing what is it that is important and essential to write about. 

Why do I write?

Ma’am, my dear thesis adviser, Prof. Amelia Lapeña-Bonifacio, I write now because I want to thank you with all my heart, for saving the future of this poor promdi from Dingalan (Aurora province), who was lucky enough to graduate from Diliman, pursue his dreams and take this life-long journey. (edited, updated. First published for Kwentung Peyups)

Basic queries of foreigners desiring to do business in the Philippines

Our company is an LLC (limited liability company). It provides an umbrella under which individuals may operate and receive individual immunity similar to those enjoyed by shareholders in a corporation.  It has the advantage that income flows through to the members of the LLC and is taxed at their individual rates.  There is no “corporate” tax.  My questions are as follows:

a.  Is there a similar entity in the Philippines? There is none.

b.  Would the Philippines give full faith and credit to this American entity under the rules of comity? Recognition as such legal entity in America, yes. But to actually conduct business in the Philippines pursuant to its purpose/s, an entity must be duly registered as a Philippine corporation.

c.   Would the American LLC be recognized in the Philippines as a legitimate owner of the entity which we form there? Yes.

d.   Are shareholders or the individual owners and officers shielded from individual legal liability for the acts of the corporation?  If not, what is their exposure? As a general rule, shareholders and officers of the corporation are not liable for such acts. However, directors and other officers who willfully and knowingly vote for or assent to patently unlawful acts of the corporation, or who are guilty of gross negligence or bad faith in directing the affairs of the corporation, or acquire any personal or pecuniary interest in conflict with their duty as such directors, trustees or officers, shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

With respect to debts or monetary obligations of the corporation, shareholders are liable only to the extent of their subscriptions.

e.   In some civil law countries, officers and owners of corporations can face criminal penalties for what we consider civil matters in this country.  What is the law in the Philippines and what risks must we consider? Please elaborate on the acts or omissions considered civil matters in America. At any rate, the Philippine Corporation Code (“Code”) provides that, violations of any of the provisions of the Code or its amendments shall be punished by a fine of not less than one thousand (P1,000.00) pesos but not more than ten thousand (P10,000.00) pesos, or by imprisonment for not less than thirty (30) days but not more than five (5) years, or both, in the discretion of the court.

f.   Likewise, can the officers and shareholders of a company be held liable for the acts of the corporation in the Philippines? In the absence of malice, bad faith, or specific provision of law, a director or an officer of a corporation cannot be made personally liable for corporate liabilities.

g.   How difficult or easy is for someone to pierce the corporate veil in the Philippines? This one really depends on the lawyer and the surrounding circumstances.The doctrine of piercing the corporate veil applies only in three (3) basic instances, namely: a) when the separate and distinct corporate personality defeats public convenience, as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; b) in fraud cases, or when the corporate entity is used to justify a wrong, protect a fraud, or defend a crime; or c) is used in alter ego cases, i.e., where a corporation is essentially a farce, since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation.

h.   Are employees permitted to sue their employers for personal injury? In cases of work-connected disability, sickness or death, the Philippines has a law entitled  Employees’ Compensation and State Insurance Fund (“Fund”). The liability of the Fund is exclusive and in place of all other liabilities of the employer to the employee or his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents.However, under our law on quasi-delicts (in the New Civil Code), employees may still sue the corporation and its officers for civil damages if malice or bad faith on the part of the latter contributed to such injuries.     For injuries caused by fellow employees? Again, under our law on quasi-delicts, the owners and managers of an establishment or enterprise are responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Such responsibility ceases when the owners and managers prove that they observed all the diligence of a good father of a family to prevent damage.

i.    Are there any special labor laws we should be aware of, i.e. labor relations, pension and health benefits, are employees, employees at will, etc.?

Yes. The Labor Code, the Social Security Law, the Employees’ Compensation and State Insurance Fund, and the National Health Insurance Act are the most important laws.

Public-private partnership schemes for local governments

In a recent interview, Philippine President PNoy said, “There is a need to fast-track the implementation of the Public-Private Partnership programs and projects as a cornerstone strategy of the national development to accelerate the infrastructure development of the country and sustain economic growth.”

This could not be truer in the local government front where lack of funds is a perennial concern, and is the usual excuse for below par delivery of basic services to the local government units’ (LGUs) constituents.

While the Local Government Code of 1991 has granted them so much autonomy, the LGUs have yet to maximize their full potentials as the backbone of the nation. LGUs rely basically on their internal revenue allotment (IRA) shares, collection of real property taxes, business permit fees, building permit charges, and some other minor, miscellaneous sources of revenues, e.g., market rents, boat and bicycle registrations, occupational permit fees. Lucky are those LGUs friendly with their congressmen for they will have a share of the pork barrel.

With an ever burgeoning population and increasing cost of delivering basic services on health, education, environment and sanitation, and infrastructure development, LGUs are hard put to make both ends meet. Salaries and wages of employees and workers alone already make up 40% of their annual budget.

Yet, the Local Government Code itself offers the solution: partnering with the private sector. Under Section 18, it provides that LGUs have the power to generate and apply their own resources. Among others, they have the power to create their own sources of revenue and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition; and to develop, lease, encumber, alienate, or otherwise dispose of real or personal property held by them in their proprietary capacity and to apply their resources and assets for productive, developmental, or welfare purposes.

Such unprecedented grant of power to LGUs by law remains untapped. Harnessing the opportunities offered by Section 18 is vast.

To name a few, roads, ports, markets, beaches, terminals, slaughterhouses, garbage collection, as well as all the idle lands of LGUs belonging to them in their proprietary functions, maybe subject of public-private partnerships or PPPs.

There are various modes of accomplishing such partnership.

The Amended Built-Operate-Transfer (BOT) Law gives several variations/schemes. Focusing primarily on infrastructure projects, the BOT Primer on Republic Act No. 7718 shows the following:     

Build-Operate-and-Transfer (BOT)

Build-and-Transfer (BT)

Build-Own-and-Operate (BOO)

Build-Lease-and-Transfer (BLT)

Build-Transfer-and-Operate (BTO)

Contract-Add-and-Operate (CAO)

Develop-Operate-and-Transfer (DOT)

Rehabilitate-Own-and-Transfer (ROT)

Rehabilitate-Own-and-Operate (ROO)

Other variations as may be approved by the President

In BOT projects, ownership of the subject property stays with the LGUs.

On the other hand, LGUs may also consider a joint venture scheme. In an opinion, the Department of Interior and Local Government (DILG) affirms the power of LGUs to enter into a joint venture agreement with the private sector pursuant to its corporate powers.

The National Economic Development Authority (NEDA) defines joint venture as, “A contractual arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a group of Government Entities on the other hand, contribute money/capital, services, assets (including equipment, land or intellectual property), or a combination of any or all of the foregoing. Parties to a JV share risks to jointly undertake an investment activity in order to accomplish a specific, limited or special goal or purpose with the end view of facilitating private sector initiative in a particular industry or sector, and eventually transferring ownership of the investment activity to the private sector under competitive market conditions. It involves a community or pooling of interests in the performance of the service, function, business or activity, with each party having a right to direct and govern the policy in connection therewith, and with a view of sharing both profits and losses, subject to agreement by the parties. A JV may be a contractual JV, or a corporate JV.”

JV Agreements must be distinguished with BOT schemes as the former allows the private sector to take over the undertaking of a project in its entirety after the government divests itself of any interest in the JV.

Similar in the sense that ownership of the property stays with the LGUs, lease schemes may also be considered. Pursuant to their corporate powers and subject to applicable Commission on Audit (COA) circulars, LGUs can enter into lease agreements with the private sector. Generally, in a contract of lease, there is a subject matter, the use of a property of the LGUs; a cause or consideration which is the amount of rental that shall be paid by the lessee; and consent among the parties.

In a case, the Supreme Court upheld the Ombudsman’s findings that the mere provision in the contract that the building shall belong to the city government at the termination of the contract will not be sufficient to classify the transaction under the BOT scheme. This kind of provision is ordinary in long-term lease agreement.

In all instances, the modes of selecting a partner and awarding a contract are either through public bidding or unsolicited proposal, with the latter always subject to a challenge.

A common noble vision, strong political will and harmonious relations can help the LGUs become self-reliant, progressive and confident. In these instances, political and personal differences ought to be set aside. At stake is the future of their towns, cities, provinces, at the backdrop of globalization and international competitiveness. 

Indeed, with the initiative already coming from Malacanang through Executive Order No. 8, and the requisite synergy and cooperation between the local chief executive and the local sanggunian (legislature), including the civil society, the LGUs would be in a proper position to maximize their full potentials as a vital partner in nation-building.