Micro and small entrepreneurs, mostly from the franchising sector, would like local and national government units to give them a break in terms of taxes and lower interest rate to let them grow, especially that they are just recovering from the pandemic where most of their operations were put on hold.  

This was raised by Philippine Franchising Association (PFA) Chairman Sherill Quintana during an interview at the recent Franchise Asia Philippines 2023, where over 1,000 brands participated and over 60 foreign delegates from various countries. 

Quintana noted that if the government can give out tax holidays to companies, this privilege can also be granted to the micro and small enterprises.  

“We actually give tax holidays why not give to micro and small (enterprises),” said Quintana, adding that government could also subsidize micro and small enterprises’ participation in trade fairs locally and overseas for  business-to-business matching. 

She noted that Singapore gives tax holidays to startups for a certain period of time. She urged government to do the same by granting a few years, say five years to “give us breathing space after the pandemic.” 

Quintana said that by providing tax relief to the franchising industry, the government will certainly earn more. She explained that when a franchising company opens, it pays taxes to the national government -- the Bureau of Internal Revenue -- and when its franchise opens in a municipality it pays taxes to the local government unit. 

Thus, she said, it is wise for the local government units to give these micro and small enterprises tax relief for a few years to help them grow because ”if they grow they will create more outlets, generate more jobs, and other economic activities.” 

For the national government, she said the franchising sector just wants to make the taxation transparent and equitable. 

Another bottleneck to micro and small enterprises is capital because of high interest rate. 

Quintana noted that when an entrepreneur borrows money from a bank, the interest rate is one percent a month or 12 percent a year, describing the rate as “too high” and is crippling the entrepreneurs.

She urged the government to instead encourage entrepreneurship by supporting local businesses with tax breaks and lower interest rate. 

Government support is crucial at this point since more franchise options are now available even at the barangay level, she added. “We empower entrepreneurs up to the barangay level because if they are successful, we will also earn,” she added.

“It is about time that Philippines has to shine and the only way is to work together so government agencies should realize the power of entrepreneurship by supporting entrepreneurs,” she added.