2017-2018

As of December 2018

NIEMAR A. ABALO
JAMES P. BATUCAN
1
Table of Contents
I. PROFILE OF ORMOC CITY ...................................................................................... 6
A. DEMOGRAPHIC PROFILE ................................................................................... 6
B. PHYSICAL AND GEOGRAPHIC PROFILE .............................................................. 7
C. SOCIO ECONOMIC PROFILE............................................................................... 8
1. Educational Institutions ................................................................................ 8
2. Health Facilities ............................................................................................ 9
3. Day Care Centers .......................................................................................... 9
4. Protective Services ........................................................................................ 9
5. Sports and Recreation ................................................................................... 9
D. RESOURCE PROFILE ......................................................................................... 10
II. MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) PROFILE ............................ 10
A. MSMEs TOTAL NUMBER OF REGISTERED ESTABLISHMENTS ......................... 12
B. MSMEs PROFILE BY ASSET SIZE ....................................................................... 13
C. MSMEs PROFILE BY SECTOR CLASSIFICATION ................................................ 15
D. MSMEs PROFILE BY LEGAL IDENTITY .............................................................. 16
III. PRODUCTIVITY INDICES ......................................................................................... 20
A. SALES PRODUCTIVITY RATIO (SPR) ................................................................. 21
B. LABOR INTENSIVE RATIO (LIR) ........................................................................ 22
C. ASSET PRODUCTIVITY RATIO (APR) ................................................................. 23
IV. THE FOCUS: MANUFACTURING SECTOR................................................................ 24
A. MANUFACTURING SECTOR ........................................................................... 24
B. MANUFACTURING SECTOR BY ASSET SIZE...................................................... 27
C. MANUFACTURING SECTOR BY LEGAL IDENTITY ............................................. 28
D. PRODUCTIVITY INDICES OF MANUFACTURING SUB SECTOR ......................... 28
E. PROJECTION OF MANUFACTURING SECTOR .................................................. 31

2
Table of Figures
Figure 1: Ormoc City Brgy. Map Source: Draft CLUP 2016 ........................................... 7
Figure 2: Total Number of Registered Firms ............................................................... 12
(2017-2018)................................................................................................................. 12
Figure 3: MSMEs by Asset Size.................................................................................... 14
Figure 4: MSMEs by Sectoral Distribution .................................................................. 15
Figure 5: MSMEs by Legal Identity .............................................................................. 17
Figure 6: Sales Productivity Ratio= Sales/ No. of Jobs ................................................ 21
Figure 7: Labor Intensive Ratio =No. of Jobs / No. of Firms ....................................... 22
Figure 8: Asset Productivity Ratio = Total Asset / Sales .............................................. 23
Figure 9: Total Number of Establishments under Manufacturing (2017-2018) ........ 24
Figure 10: Distribution of Manufacturing Sub-sector ................................................ 26
Figure 11: Manufacuring by Asset Size ....................................................................... 27
Figure 12: Manufacuring by Asset Size ....................................................................... 28

Table of Tables
Table 1......................................................................................................................... 12
HISTORICAL SUMMARY OF ORMOC CITY ESTABLISHMENT........................................ 12
Table 2......................................................................................................................... 13
SUMMARY OF ORMOC CITY ESTABLISHMENT AS OF 2018 ........................................ 13
Table 3......................................................................................................................... 13
SUMMARY OF MSMEs by ASSET SIZE ......................................................................... 13
Table 4......................................................................................................................... 15
SUMMARY OF MSMEs by SECTORAL DISTRIBUTION .................................................. 15
Table 5......................................................................................................................... 16
SUMMARY OF MSMEs by LEGAL IDENTITY ................................................................. 16
Table 6......................................................................................................................... 21
SUMMARY OF SALES PRODUCTIVITY RATIO (SPR)...................................................... 21
Table 7......................................................................................................................... 22
SUMMARY OF LABOR INTENSIVE RATIO (LIR) ............................................................ 22
Table 8......................................................................................................................... 23
SUMMARY OF ASSET PRODUCTIVITY RATIO............................................................... 23
Table 9......................................................................................................................... 25
SUMMARY OF MANUFACTURING SUB-SECTOR ......................................................... 25
Table 10....................................................................................................................... 28
SUMMARY OF MANUFACTURING SUB-SECTOR by LEGAL IDENTITY .......................... 28
Table 11....................................................................................................................... 29
1. SALES PRODUCTIVITY RATIO ................................................................................... 29
Table 12....................................................................................................................... 29
2. LABOR INTENSIVE RATIO (LIR) ................................................................................ 29
Table 13....................................................................................................................... 30
3. ASSET PRODUCTIVITY RATIO................................................................................... 30
Table 14....................................................................................................................... 31
MANUFACTURING SECTOR BUSINESS REGISTRATION 2015-2020 ............................. 31
Table 15....................................................................................................................... 32
MANFACTURING SECTOR PROJECTIONS 2016-2020 .................................................. 32

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3. Synopsis

The City of Ormoc enjoys economic growth as it supplies the country’s

power needs due to the abundant geothermal power resources located in
Tongonan and neighboring Kananga town. The data taken from the
Business Permits and Licensing Office shows 7,236 business registrants
in the year 2018. (See Annex 1) It has generated a total number of 23,340
jobs.

Despite the wrath brought by the Super Typhoon Haiyan in Ormoc City,
the economy didn’t seize to grow. The three (3) major sectors: Trading,
Service and Manufacturing shows an average growth

The Manufacturing Sector has a total number of 186 establishments as

of 2018. Being laborious in nature, it has greatly contributed to job
generation in the City with its Labor Intensive ratio at 1:8. It is evident
that increasing this sector will reduce unemployment in the community.
On the other hand, despite having the highest cumulative asset and sales,
the Trading Sector only comes next to Service in terms of Asset
Productivity Ratio while it still dominates in Sales Productivity Ratio
next to Manufacturing.

The government has promulgated the establishment of the Negosyo

Center in the City. As another stronghold of the entrepreneurs, the City
is hastening its growth towards economic development and boosting its
capability to sustain job opportunities and avert poverty.

4
 CITY OF ORMOC
MSMEs DEVELOPMENT STRATEGY: 2018-2022

VISION
Ormoc City as the agro-commercial and industrial gateway in Eastern
Visayas and the Renewable Energy Capital of the Philippines; with a growth-
inclusive economy, in a disaster-resilient environment, administered by an
accountable local government.

Ormoc’s strengths are encapsulated by its vision statement that

highlights its special role as the agro -commercial and industrial gateway to
eastern Visayas. With its port city status, its proximity to Cebu and central
location along the Ormoc Bay, it has the natural advantage to serve as the hub
on this side of Leyte. The city also prides itself on being the national center of
renewable energy. At 700 MW capacity, the Leyte Geothermal Production Field
(LGPF) is the second largest geothermal plant in the world. Operated by the
Energy Development Corporation, it supplies power not only to Leyte but the
whole Philippines through the National Power Corporation.

5
 I. PROFILE OF ORMOC CITY

Ormoc is the economic, cultural, commercial and transportation hub of

Western Leyte. The city is identified in the Provincial Development and
Physical Framework Plan 2011-2016 as the: Secondary Center for
Manufacturing, Commerce and Trade; Secondary Center for Education;
Gateway to Cebu City and other central islands; Destination for eco-tourism
because of Lake Danao.

Today, Ormoc City is a picture of steady progress and stability. With its
continuous modernization program, more investors are coming into the city,
which contributed to it being adjudged as the 2005 Most Business-Friendly City
in the Visayas by the prestigious Philippine Chamber of Commerce and
Industry. And though the city has embarked on modernization, it has also keep
attuned its environmental protection programs as evident in being a consistent
Cleanest and Greenest City awardee in Region VIII and one of the Cleanest and
Greenest City in the country. This prestigious award is a leading tribute to
visualize Ormoc as a beauty by the bay, a wonderful place to visit whether for
business or pleasure.

A. DEMOGRAPHIC PROFILE

The 2010 Census of Population of the National Statistics Office (NSO)

recorded a total population for Ormoc City of 191,200 and total households of
41,996. The annual growth in population and in the number of households from
2000 to 2010 was approximately 2.39% and 3.32%, respectively.

In 2010 and 2013, the male population was relatively higher than the
female population. The gender ratios for both years exceeded 100, which
indicated predominance of the male population. For both years, more than half
(51%) of the population was male and the remaining 49% was female.

In 2013, more than half (118,877 persons or 59.78%) of the population

of Ormoc City comprised the working age group 15 to 64 years old. Young

6
dependents (those aged 0 to 14 years) accounted for 36% (71,571 persons),
while the old dependents (those aged 65 years and above) represented 4.0%
(4,781 persons). These figures yielded an overall dependency ratio of 67% and
denote that for every 100 persons within the working age group, there are about
67 dependents. The working population from age 15 to 64 is relatively
distributed across the urban and rural barangays. Male population and female
population are almost equal and also proportionately distributed in all
barangays. From 2011 to 2025, the population and the number of households
are expected to grow at 360,218 and 72,044, respectively.

B. PHYSICAL AND GEOGRAPHIC PROFILE

The City of Ormoc is

situated on Leyte’s northwestern
side fronting the Ormoc Bay,
which is an extension of the
Camotes Sea. It has a total land
area of 46,430 hectares with a
built-up area of 2,672.8 hectares
or 5.76 % of the total area. Both
its geographical location and
vibrant seaport account for its
role as a gateway city. It is
bounded by the towns of Matag-
ob and Merida on the northwest
side, the Kananga on the north,
Jaro, Pastrana and Dagami on the
northeast boundary and Albuera Figure 1: Ormoc City Brgy. Map Source: Draft CLUP

on the southern side. 2016

The city is located at Lat. 11° 00' 26.59" N, Long. 124° 36' 28.46" E, in
an enclave fronting the Ormoc Bay. This location serves to make the city an
ideal and popular jump off point for Cebu, the rest of the Visayas, and the
northern portion of Mindanao. It is situated 109 kilometers from Tacloban City,

7
the capital of Leyte and the eastern Visayas Region and about 62 nautical miles
from Cebu City. Thus, it has a great advantage over the nearby municipalities
in terms of commercial, transport and recreational facilities. It is a popular
convergence point for businessmen, traders, civic groups and industrialists.

The City is subdivided into 110 barangays, of which 69 are rural

barangays and 41 are urban barangays. Ormoc is an independent component
city, not subject to regulation by the Provincial Government of Leyte. However,
the city is part of the Congressional District IV of Leyte together with Albuera,
Kananga, Merida, and Isabel towns.

C. SOCIO ECONOMIC PROFILE

The social services facilities/utilities/amenities include those under the

educational, health, social welfare, protective, as well as sports and recreation
sub-sector of the social sector.

1. Educational Institutions

There are 182 public educational institutions to include pre-school,

elementary, college and vocational. On the other hand, 52 educational
institutions are classified as private. The City ranked 2nd in the Regional Level
National Achievement Test (NAT). The literacy rate of the province is high at
98.14%. Ormoc has a strong linkage with the academic institutions such as the
Visayas State University and line agencies like Agricultural Training Institute.
VSU assists the city in the identification and adoption of production
technologies in agriculture and fisheries. However, tertiary schools are not
offering courses relevant to agri-industrial development.

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 2. Health Facilities

There were more public than private health facilities recorded at 220 and 21,
respectively. Existing in large number are barangay health center, barangay
health station, and health center.

3. Day Care Centers

As of 2013, there were 97 day care centers in five (5) districts of the city.
District 3 has the most number of day care centers equal to 25. The rest of the
districts have day care centers ranging from 16 to 19.

4. Protective Services

In 2015, most of the protective services facilities and equipment are in good
condition, except for the district jail which require improvement. The police-
population ratio was closely within the minimum standard of one (1) police for
every 1,000 population. However, the number of firemen should be increased
since the current ratio of 1:3,000 exceeded the minimum standard of 1 fireman:
1,000 population.

5. Sports and Recreation

The people of Ormoc City enjoy a variety of socio-cultural and sports facilities.
There are about 124 local government-owned and 28 privately-owned cultural
and sports facilities, respectively. The sports and recreational facilities include
the socio-cultural center, indoor stadium, covered basketball court, shooting
range, tennis court, sports complex and grandstand, volleyball court, badminton
court, golf course, swimming pool, billiard hall, cockpit, and racetrack.

Many of the projects and programs of Ormoc have been stalled or

slowed down by Typhoon Haiyan. Total damages caused by Typhoon Haiyan
amounted to over PHP 2.3 billion. Agriculture suffered the most damage
amounting to over PHP 2 billion. As most of the population relied greatly on
the agriculture products, this was the sector that greatly suffered in the aftermath

9
of the calamity. This was followed by damages on the private buildings and
establishments at PHP 113.8 million.

D. RESOURCE PROFILE

Ormoc City serves has a seaport which make Ormoc a central

transportation hub of Western Leyte. It provides shipping linkages from Manila
and other provinces; maintaining shipping relationship moving goods and
people. Moreover, one of the three airports in the region is in Ormoc City and
is soon to open for commercial flights.
Aside from Ormoc being the transportation hub of Western Leyte, the
city hosts a huge geothermal plant managed by the Energy Development
Corporation (EDC). The Leyte Geothermal Production Field is known as the
second largest steam-producing field in the world. It supplies power not only in
the parts of Visayas, but also some areas in Luzon via submarine cables.

According to the national competitiveness council of the Philippines

(2018), Ormoc City ranks 103 with a score of 39.0609 in the overall score of
LGUs. This is the sum of scores on the four pillars: economic dynamism,
government efficiency, infrastructure and resiliency. In terms of economic
dynamism, Ormoc ranks 96 with a 4.2266 score. This pillar consists of several
sub-indicators such as the city's economy size, growth and cost of living to name
some. On the other hand, Ormoc City ranks 111 with regards to government
efficiency with a 11.0941 score. Lastly, Ormoc City LGU ranks 57 with 6.5415
score for infrastructure.

II. MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) PROFILE

In Ormoc, the MSMEs play a pivotal role in overall economy.

Furthermore, in recent years the MSME sector has consistently registered
higher growth rate of new establishment compared to the overall industry . The
major advantages of Micro, Small and Medium Enterprises (MSMEs) are its

10
capacity of employment generation, low capital and technology requirement,
use of traditional or inherited skill, use of local resources, mobilization of
resources and possible exportability of products. MSMEs are credited for
generating inclusive growth in the city.

The Government promulgated the establishment of the Negosyo Center

under RA 10644 or known as the GO NEGOSYO ACT in Ormoc City with the
collaboration of the Department of Trade and Industry and the Ormoc City
Local Government Unit and other stakeholders and partners to improve the
competitiveness of Micro, Small and Medium Enterprises (MSMEs).

The initiative under this law aims to increase the number of registered
entities, promote inclusive growth, increase productivity, upgrading technology
and enabling entrepreneur with emphasis on manufacturing/processing sector
as well as expanding domestic and global market share of Ormoc City MSMEs’
products through Business Registration Assistance facilitate processing and
documentation of paper requirements necessary for the establishment of
MSMEs; Business Advisory Services tailored according to their needs that
include product development, trade promotion, financing facilitation,
investment matching and SME counselling, and; Business Information
Advocacy to provide economic, technical, market and investments related
materials and conduct information campaigns through trainings, seminars,
dialogues and publications.

11
 A. MSMEs TOTAL NUMBER OF REGISTERED ESTABLISHMENTS

Table 1
HISTORICAL SUMMARY OF ORMOC CITY ESTABLISHMENT
(2012-2017)

Year Renewal New Total Growth Rate

2012 4237 752 4989

2013 4459 801 5260 0.02%
2014 4582 745 5327 1.27%
2015 4815 912 5727 7.51%
2016 5065 1032 6097 6.46%
2017 5413 1366 6779 11.18%
2018 5901 1335 7236 6.74%

A total number of 6779 and 7236 registered establishments as of 2017 and 2018
respectively are taken from data
8000
of the Ormoc City Local 7236
6779
Government Unit –Business 7000

Permits and Licensing Office. 6097

6000
No. of Establishments

From 2017, the total number of

establishments registered 5000

increase by 6.74% % in 2018.

4000
The new registrants reached at
1335 while 5901 renewed their 3000

businesses from last year. 2000

1000

0
2016 2017 2018

Figure 2: Total Number of Registered Firms

(2016-2018)

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 Table 2
SUMMARY OF ORMOC CITY ESTABLISHMENT AS OF 2018
Year
Growth No. of
Sectors Asset Sales
Rate Jobs
2018 2017

Trading 2375 2051 15.80% 8,476,209,434.00 8,138,346,024.00 7,394

Services 4492 4535 0.95% 4,431,051,881.00 3,637,131,524.00 13,521

Manufacturing 186 189 1.58% 5,434,215,633.00 5,424,210,633.00 1,447

Banks and OFI 183 171 7.02% 795,782,176.00 769,417,176.00 978

17,969,105,357.0
19,138,759,124.0
TOTAL 7236 6779 6.74% 0 23,340
0

The distribution of these establishments is classified according to the

MSMEs Profile by Asset; MSMEs Profile by Sector and MSMEs Profile by
Legal Identity. The Productivity Indices such as the Sales Productivity Ratio
(SPR), Asset Intensive Ratio (AIR) and Labor Intensive Ratio (LIR) are also
presented below.

B. MSMEs PROFILE BY ASSET SIZE

Table 3
SUMMARY OF MSMEs by ASSET SIZE

Enterprises By Asset Size Total No. of Establishments Percentage

Micro Up to P3, 000, 000 6478 89.52%

Small P3, 000, 001 -P15, 000, 000 582 8.04%
Medium P15, 000, 001 -P100, 000, 000 123 1.70%
Large More than P100M 53 0.73%
TOTAL 7,236 100%
Note: Data taken from 2018 BPLS

13
The establishments in Ormoc
Large Medium Small Micro
City are dominated by the
53 123 582
Micro, Small, and Medium
Enterprises (MSMEs).
MSMEs have been accepted
as the engine of economic
6478
growth and for promoting
equitable development. Out
of the 7,236 registered
establishments, MSMEs Figure 3: MSMEs by Asset Size

constitute a total of number 7,183 of 99.27%% leaving the rest of 53 or 0.73%

establishments to the Large Enterprises. The Micro Enterprises has a total
number of 6478 or 89.52% registered establishments, mostly family owned
businesses employing one or two persons; Small Enterprises has a moderate
total of 582 or 8.04%; while Medium Enterprises has 123 or 1.70%. The Large
Enterprises in Ormoc City are mainly composed of large corporations such as
the Heva Management & Development Corporation; Mercury Drug
Corporation, San Miguel Foods, Inc.; PEPSI; First Balfour, Inc., etc. along with
our very own Energy Development Corporation (EDC) which has been
generating local job employment in the community.

14
 C. MSMEs PROFILE BY SECTOR CLASSIFICATION

Table 4
SUMMARY OF MSMEs by SECTORAL DISTRIBUTION

Sector Total No. of Establishments Percentage

Trading 2375 32.82%

Service 4492 62.08%
Manufacturing 186 2.57%
Banks and OFI 183 2.53%
TOTAL 7236 100%
Note: A total number of 183 establishments was taken out and were classified as Banks and OFIs.

The establishments
Manufacturing Retailers Services
under service sector Banks and
OFIs 2.53% 2.57%
have taken a large
portion of the whole 32.82%
industry at 4492 or
62.08%.

62.08%
The trading
industry is also very
apparent with a total
of 2375 or 32.82% varying Figure 4: MSMEs by Sectoral Distribution

from retail to wholesale composed of some entrepreneurs that import goods

from other neighbouring countries. While there is only 2.57% or 186 attributed
to Manufacturing/ processing industry. A small portion of just 2.53% or 183
registered establishments is to Banks and other OFIs as of 2018.

Ormoc City has a fine proportion of trading and services in terms of

establishments not engage in transportation (motorcab) however its
Manufacturing sector is relatively low.
The information and technology also plays a significant role as the locals
do not have enough information to engage in this line of business, thus
entrepreneurs commonly engage in trading or service. The existing

15
establishments also do not have the technology and machinery to keep up with
the present innovation. The city has the available raw materials for several kinds
of business and soon will be implementing the Investment Incentive Code which
will attract more investors to invest their assets in the City.

Although Ormoc City is considered a good mixed of agriculture and

farming, the Farm/Poultry industry is noticeably low as entrepreneurs engage in
this industry usually do their business at home in the countryside and opted not
to register a business name in the Department of Trade and Industry as well as
business permit to operate.

D. MSMEs PROFILE BY LEGAL IDENTITY

Table 5
SUMMARY OF MSMEs by LEGAL IDENTITY
Legal Identity Total No. of Establishments Percentage

Sole Proprietorship 7089 97.86%

Partnership and Corporation 87 1.20%
Cooperative 40 0.55%
Association 20 0.27%
TOTAL 7236 100%

16
 STOPThe
Cooperative Association
distribution of Sole Proprietorship Partnership and Corporation
enterprises as of 2017
according to its legal 97.86%

identity is shown in the

graph. There are 7089
or 97.86% out of the
total 7236
entrepreneurs that are
1.20%
sole proprietors, it
dominates the entire 0.55%

business industry of Figure 5: MSMEs by Legal Identity

Ormoc. It is the simplest
business to set up or take apart, making them popular among individual self-
contractors or entrepreneurs. In this type of business the owner of the business
has a total control and full decision making power over its capital, profit and
investment. Registration of this type of business has also been simplified
through the Negosyo Center, as a one-stop-shop whereby entrepreneurs can
easily apply for a business name in the Department of Trade and Industry at the
center, and would take only three (3) steps for the Business Permit by filling up
the application form at the Business Permits and Licensing Office adjacent to
the Negosyo Center Office; Payment of Taxes and Fees at the City Treasurer’s
Office; and lastly approval of signature by the Mayor at the City Mayor’s
Office. A Philippine Business Registry Kiosk is

Partnership and Corporation owned entities has a total number of 87 or

1.20% of the entire industry, these are usually big companies or entities engaged
in trading and services from the outside of the locality. Associations are
composed of just 20 or 0.27% usually engaged in agri-business and food
processing while the number of Cooperative in Ormoc City has a total of 40 or
0.55% involving mutual assistance and credit, owned and run jointly by its
members who share profits and benefits.

17
 According to the national competitiveness council of the Philippines
(2018), Ormoc City ranks 103 with a score of 39.0609 in the overall score of
LGUs in the country. This is the sum of scores on three pillars: economic
dynamism, government efficiency and infrastructure. In terms of economic
dynamism, Ormoc ranks 96 with a 4.2266 score. This pillar consists of several
sun-indicators such as the city's economy size, growth and cost of living to name
some. On the other hand, Ormoc City ranks 111 with regards to government
efficiency with a 11.0941 score. Ormoc City LGU ranks 57 in terms of
infrastructure with 6.5415 score and rank 95 in resiliency with 17.1986.

In provincial standpoint, Ormoc City's score of 39.0988 sets the LGU at

rank 2 in year 2017 among the 43 LGUs in the province of Leyte next to
Tacloban City in rank 1. Moreover, positive observation has been noted saying
there is a good leadership from Business Permits and Licensing Office in Ormoc
City LGU contributing to the competitive score of the city.

18
 Table 6
ORMOC CITY CMCI RESULT
2014-2018

ORMOC CITY 2018 2017 2016 2015 2014

ECONOMIC 4.2266 4.246 7.9379 6.2546 7.609

DYNAMISM

GOVERNMENT 11.0941 11.8859 14.982 10.3497 9.999

EFFECIVIENCY

INFRASTRUCTURE 6.5415 6.4292 8.202 7.4235 7.408

RESILIENCY 17.1986 16.5376 No data No data No data

OVERALL SCORE 39.0609 39.0988 31 24.0278 31.402

CMCI Ranking of Ormoc CIty for the Past 5

Years
16
14
12
10
8
6
4
2
0
2018 2017 2016 2015 2014

ECONOMIC DYNAMISM GOVERNMENT EFFECIVIENCY INFRASTRUCTURE

19
These scores indicate that Ormoc City has still long way to improve especially
in terms of economic dynamism and infrastructure. Hence, the LGU must be
able to create stable expansion of businesses in the locality so as to influence
the rate of job generation in the city.

III. PRODUCTIVITY INDICES

Productivity Analysis of the existing establishments in Ormoc City is

shown below. The Sales Productivity Ratio (SPR) measures the productivity of
an employee. It indicates how much sales can be attributed to the employees
performance. Sector with higher sales-per-employee figures are generally
considered more efficient than those with lower figures. A higher sales-per-
employee ratio also indicates that the sector can operate on low overhead costs,
and therefore do more with less employees, which often translates into healthy
profits. Asset Productivity Ration (APR) describes how effectively the sectors
assets are deployed. These ratios typically look at sales generated per unit of
resource. The Labor Intesive Ratio requires a large amount of labor to produce
its goods or services. The degree of labor intensity is typically measured in
proportion to the amount of capital required to produce the goods/services; the
higher the proportion of labor costs required, the more labor intensive the
business.

These productivity measures can provide insight as to what sector the

Negosyo Center Ormoc City should engage when increasing profitability or
employment generation. With this data, investors will also know as to what
sector to invest in Ormoc City. The following anaysis is presented below in
terms of their sales productivity, labor intensive, and asset productivity for the
different sectors.

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 A. SALES PRODUCTIVITY RATIO (SPR)

Each sector though 4000000

performs very effectively 3500000
3000000
vary on productivity 2500000
measures. The 2000000
1500000
Manufacturing Sector 1000000
which dominates the entire 500000
0
industry has a sales Mfg/ Banks
Tradi Servic
Proce and
ng e
productivity of ssing OFIs
Sales Productivity
1:3,748,590 and next to 1100668 3748590 268998 786725
Ratio
trading is Trading at 1:
Figure 6: Sales Productivity Ratio= Sales/ No. of Jobs
1,100,668. This means that
for every one (1) job that the Trading sector has generated, there is an equal
sales of P 1,100,668. Furthermore, the manufacturing sector can operate on low
overhead costs, and therefore can do more with less employees, which often
translates to higher profitabilitiy than that of the service sector.

Table 7
SUMMARY OF SALES PRODUCTIVITY RATIO (SPR)

Sectors Ratios

Trading 1,100,668
Service 268,998
Manufacturing 3,748,590
Banks and OFIs 786,725

21
 B. LABOR INTENSIVE RATIO (LIR)

Being labour-
9
intensive in nature, the 8
7
manufacturing sector 6
5
make significant 4
3
contribution in 2
employment generation 1
0
Mfg/ Banks
and expanding industrial Tradin
Proces Service and
g
network in city. Having sing OFIs
Labor Intensive
the ratio of 1:8, this 3 8 3 1
Ratio
sector nurtures the
Figure 7: Labor Intensive Ratio =No. of Jobs / No. of Firms
traditional skills and
knowledge in production of a certain goods. In manufacturing, each employee
can usually produce only a certain number of products which means that
increasing production requires more employees. Thus, using this analysis, it can
be identified which sector to increase in order to promote inclusive growth. On
the contrary, establishments under trading sector can increase sales without
necessarily adding staff. The manufacturing sector have been a good source of
employment generation and can be even more if the sector gets support in terms
of infusion of technology, capital and innovative marketing techniques.

Table 8
SUMMARY OF LABOR INTENSIVE RATIO (LIR)

Sectors Ratios

22
 Trading 1: 3
Service 1:3
Manufacturing 1:8
Banks and OFIs 1:5

C. ASSET PRODUCTIVITY RATIO (APR)

Among the trading,

1.4
service and manufacturing/ 1.2
processing sector, the 1
sector that has used most of 0.8
0.6
its asset for productivity is
0.4
the Service at 1.22. This 0.2
means that engaging 0
Mfg/
Banks
Trading Processi Service
business under ng
and OFIs

Asset Productivity
agribusiness sector is a Ratio
1.04 1 1.22 1.03

good investment based on

Figure 8: Asset Productivity Ratio = Total Asset / Sales
its asset productivity. It
generated more revenue per asset as of 2018. In contrast the establishments
under manufacturing sector has the lowest asset productivity at 1.

Table 9
SUMMARY OF ASSET PRODUCTIVITY RATIO
Sectors Ratios

1.04
Trading

1.22
Service

1.00
Manufacturing

1.03
Banks and OFIs

23
IV. THE FOCUS: MANUFACTURING SECTOR

A. MANUFACTURING SECTOR (2015-2017)

Being the secondary 195

center for manufacturing, commerce 189
190
186
and trade. Ormoc City has given its 185

share to manufacturing industry with 180

186 establishments giving a total of No. of Establishments 175

1447 employment. 170

165
160
Although it is evident that 160

manufacturing could possibly 155

150
generate employment with its Labor
145
Intensive Ratio by 1:8, what can be
Figure 9: Total Number of Establishments under
140
noted is the rising of service sectors in 2016 (2016-2018)
Manufacturing 2017 2018
the city. This implies that there has
been no structural transformation in the economy of Ormoc as well as no
industrial growth initiated by manufacturing.

From the 186 manufacturing sector, two are large corporations which
are Energy Development Corporation, the source of power in Eastern Visayas
and some other parts in the country as well as Coca-Cola.

24
 Table 10
SUMMARY OF MANUFACTURING SUB-SECTOR

Type of Processing No. of Establisments Percentage

Processed Food/ Beverage 149 80.11%

Basic Metal and Blacksmith 1 0.54%
Chemical and Chemical Processing 4 2.15%%
Fabricated Metal Products except
2 1.08%
Machinery and Equipment
Furniture and Furnishings 2 1.08%

Machinery and Equipments 1 0.54%

Non-Mettalic Minerals 16 8.60%%

Textile, Wearing Apparels 2 1.08%
Wood and Bamboo Products 1 0.54%
Pharmaceutical Products 1 0.54%
Others 7 3.76%
TOTAL 186 100%

25
 Processed Food/ Beverage

Basic Metal and Blacksmith 149

80.11%

Chemical and Chemical

Processing

Fabricated Metal Products

except Machinery and
Equipment
Machinery and Equipments 1
0.54%
8
Non-Mettalic Minerals 5.44%

4
Textile, Wearing Apparels 1 2.15%
0.54%
1 2
Wood and Bamboo Products 054% 2 1.08%
16
1.08% 2
1
10.88% 1.08%
0.54%
Pharmaceutical Products

Others

Figure 10: Distribution of Manufacturing Sub-sector

There are eleven (11) identified existing types of Manufacturing in

Ormoc City. With Processed Food/ Beverage as the dominant sub-sector
engage in delicacies; processed meat; dairy processing; baking/bakery/
bakeshop; cakes and pastries; pasta/noodles; and sugar cane products. The
Bakery, under Processed Food/ Beverage sub-sector, having 149 registered
establishments is currently dominating the Processed Food/ Beverage sub-
sector. Other manufacturing sub-sector includes, Basic Metal and Blacksmith,
Chemical and Chemical Processing, Fabricated Metal Products except
Machinery and Equipment, Furniture and Furnishings; Machinery and
Equipments; Non-Mettalic Minerals; Textile, Wearing Apparels; Wood and
Bamboo Products; Pharmaceutical Products; and Others However, the Negosyo
Center aims to increase the number of establishments under manufacturing
sector for the following years engage in delicacies, clothing &textiles or other

26
types of processing that could possibly generates jobs for the community and
promote inclusive growth.

B. MANUFACTURING SECTOR BY ASSET SIZE

Table 9
SUMMARY OF MANUFACTURING SUB-SECTOR by ASSET
SIZE

Enterprises By Asset Size Total No. of Establishments Percentage

Micro Up to P3, 000, 000 123 66.13%

Small P3, 000, 001 -P15, 000, 000 30 16.13%
Medium P15, 000, 001 -P100, 000, 000 25 13.44%
Large More than P100M 8 4.30%
TOTAL 186 100%

A total number of 123

manufacturing entities operate Micro Small Medium Large

on an asset lower than P3, 000,

000. Micro entities are the
blood line of the sector and are
123
usually composed of food 66.33% 30
16.13%
manufacturers such as bakeries/
bakeshops, delicacies and some
8 25
other hand crafts. The Small 13.44%
4.30%
Enterprise with 30 or 16.13%
entities are composed of
Figure 11: Manufacuring by Asset Size
three local entrepreneurs
engage in food/ beverage processing, making their way to success. On other
hand, there are only 25 or 13.44% Medium Enterprise and the remaining 8 or
4.30% establishments are large corporations.

27
 C. MANUFACTURING SECTOR BY LEGAL IDENTITY

Table 10
SUMMARY OF MANUFACTURING SUB-SECTOR by LEGAL IDENTITY

Legal Identity Total No. of Establishments Percentage

Sole Proprietorship 153 82.23%

Partnership and Corporation 31 16.67%%
Cooperative 1 0.54%
Association 1 0.54%
TOTAL 186 100%

In terms of legal identity,

Cooperative Association

the manufacturing sector is Sole Proprietorship Partnership and Corporation

majorly composed of sole

153
proprietorship with a total 82.23%

number of 153 or 82.23%while the

remaining 31 or 16.67% entities
are partnership, corporation and
31
incorporation owned. 16.67%

Using the linear

Figure 12: Manufacuringby Asset Size
regression suggested by
Mr. Joel Yu, the lacking data can be predicted through the use of formula
y=m(x)+b. Other lacking data were re-surveyed.

D. PRODUCTIVITY INDICES OF MANUFACTURING SUB SECTOR

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 Table 11
1. SALES PRODUCTIVITY RATIO

Type of Processing Sales No. of Jobs Ratio

Processed Food/ Beverage 556

Basic Metal and Blacksmith 2

Chemical and Chemical Processing 52

Fabricated Metal Products except

12
Machinery and Equipment

Furniture and Furnishings 3

Machinery and Equipment 3

Non-Mettalic Minerals 56

Textile, Wearing Apparels 6

Wood and Bamboo Products 2

Pharmaceutical Products 76

Others (Geothermal) 447

TOTAL 1447
Note: 33 new registered establishments are excluded from sales computation; 137 new job
generated are also excluded for effective computation of Sales Productivity Ratio.

Table 12
2. LABOR INTENSIVE RATIO (LIR)
No. of
Type of Processing No. of Jobs Ratio
Establishments

Processed Food/ Beverage 109 556 1:5

Basic Metal and Blacksmith 1 2 1:2

Chemical and Chemical Processing 4 52 1:13

Fabricated Metal Products except

2 12 1:6
Machinery and Equipment

Furniture and Furnishings 2 3 1:1

Machinery and Equipment 1 3 1:3

Non-Mettalic Minerals 16 56 1:4

Textile, Wearing Apparels 2 6 1:3

Wood and Bamboo Products 1 2 1:2

Pharmaceutical Products 1 76 1:76

Others (Geothermal) 8 447 1:56

29
TOTAL 186 1447

80
70
60
50
40
30
20
10
0 Fabricated
Metal
Processed Basic Metal Chemical and Products Machinery Textile, Wood and
Furniture and Non-Mettalic Pharmaceutic Others
Food/ and Chemical except and Wearing Bamboo
Furnishings Minerals al Products (Geothermal)
Beverage Blacksmith Processing Machinery Equipments Apparels Products
and
Equipment

Labor Intensive Ratio 5 2 13 6 1 3 4 3 2 76 56

Table 13
3. ASSET PRODUCTIVITY RATIO

Type of Processing Asset Sales Ratio

Processed Food/ Beverage 945 707 522

Basic Metal and Blacksmith 450 000

Chemical and Chemical

144 278 253
Processing

Fabricated Metal Products except

880 200
Machinery and Equipment

Furniture and Furnishings 287 280

Machinery and Equipments 1 000 000

Non-Mettalic Minerals 6 313 791

Textile, Wearing Apparels 535 755

Wood and Bamboo Products 400 000

30
 Pharmaceutical Products 378 922 879

Others (Geothermal) 3 371 738 515

TOTAL 5,424,210,633.00

E. PROJECTION OF MANUFACTURING SECTOR

Table 14
MANUFACTURING SECTOR BUSINESS REGISTRATION 2015-2020

Year Renewal New Total Growth Rate No. of Jobs Created

2015 119 20 139 17% 47
2016 114 14 128 12% 35
2017 112 20 132 18% 37
2018 110 37 147 34% 174
2019 114 33 147 29% 137
2020 139 40 179 21.76% 167
Average Total 118 27 145 21.96% 99
Note: Average value is used as multiplier for Projection 2015-2020 See Table 15

Manufacturing Sector was projected at 147 business registrants for the

year 2018 years which displayed a 34% growth rate, what can be noted is the
number of new entrepreneur constantly growing at an average rate of 22%. On
the other hand, the existing establishments failed to register in the City after a
couple years of operation resulting to an average renewal number of 118 per
year for the last five (5) years. This indicate that there is a low sustainability
Manufacturing Sector lacks the necessary support and knowledge in terms of
managerial skills as well technical input to keep the business operating.

The challenge for the city is to keep the existing manufacturing sectors
capacitated and ensure they receive the necessary support in sustaining their
business. The Negosyo Center and the Local Government Unit has come up
with a Development Strategy focused on the MSMEs that aims to sustain the
Manufacturing Sector over the succeeding years.

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 Table 15
MANFACTURING SECTOR PROJECTIONS 2016-2020

Year No. of Firms (New) No. of Jobs Gross Sales Capitalization

2016 30 104 28989031 -

2017 36 127 35 366 618 -
2018 44 155 43 147 274 -
2019 54 189 52 639 374 -
2020 66 231 64 220 036 -
Note: A 22% growth rate is applied for average number of establishment and average number of new
generated jobs instead of the total number of establishments and total number of jobs as of 2015 to
avoid overstatement of projected values.

OUTPUT ACTIVITIES PERFORMANCE TARGET YEAR IMPLEMENTATION

INDICATORS 2017 2018 2019

Developed potential  Seminars on  Increase number February October October

entrepreneurs and business registration of registered
MSMEs in managing  Entrepreneurial MSMEs March September March
business and building mind-setting  Developed local
competitiveness and home-grown
MSMEs
Provide access to Conduct financing Increase number of September May September
finance and forum: Presenting potential and
information of local credit windows existing MSMEs
appropriate financial who availed
institutions financial assistance

32
Provide skills training Skills training on Increase in the May August May
program for the Food Processing number of MSMEs
youth, women, and engaged in food
former or families of business
OFWs
Established access to Participate in trade Developed existing August October December
markets through fairs in partnership MSMEs
market matching and with the LGU and
trade fairs Chamber

This table represents the strategic plan of Negosyo Center Ormoc for the
manufacturing sector in the locality. This primarily aims to give MSMEs opportunity
to start and grow their business leading to business profitability and inclusive growth
in Ormoc City.

The strategies below tackles the challenges that Ormoc City entrepreneurs are
facing. Each strategy corresponds an activity that is hoping to develop the MSMEs in
the area.

Developed potential entrepreneurs and MSMEs in managing business and

building competitiveness

Developing the enterprise through packaging and labeling improvement or

helping them in market exposure is as equally important in developing the
entrepreneurs themselves. Entrepreneurial mindset is necessary to capacitate the
participants on the basic concepts and principles of entrepreneurship. This aims to help
them become competitive not only within the city industry but in the national market
as well.

Provide access to finance and information of appropriate financial institutions

To empower the potential and existing entrepreneurs in terms of tending to

their financial needs, there is a need to give them proper information that will expand
their ability to find financial opportunities present in the environment. In fact, there are
numerous financing institution available in the locality both from the private and public
sector but the lack of information hinders them to access loans. Additionally, accessing
loans is undeniably inconvenient given the restrictive requirements and long processing
time. Hence, an access to finance needs to be established so MSMEs will have the
opportunity to choose which financing institution will they go to.

33
Provide skills training program for the youth, women, and former or families of
OFWs

Part of the MSME Development Strategy is the skills training intended for the
specific sector in the city which are the youth, women, and former or families of OFWs.
Aside from the existing entrepreneurs, we would also like to empower the youth by
helping them learn and discover what they might want to pursue. Moreover, equipping
women, OFWs and their families will give households opportunity to at least have an
idea about entrepreneurship and learn a skill for a start-up a business.

Understanding the abundance of crops, pineapples, jackfruit, and other

products produced largely by farmers, potential entrepreneurs can utilize the
production by using it as a raw material by processing it into a new product. This will
promote the manufacturing sector in the city while supporting the local farmers an
enabling MSMEs.

Established access to markets through market matching and trade fairs

Together with the growth of our economy is the growing number of

competitors of each industry. Thus, helping MSMEs through market matching and
participation in trade fairs will help them generate sales and most especially widen their
reach. However, access to market would not only be enough to be able to reach new
clients and make them stay. MSMEs would first need product development; a good
label and packaging that would entice buyers and establish a legitimate name in the
industry. Additionally, food products should also comply to the regulations of Food
and Drug Authority. It would give the consumers assurance that what they are
purchasing is safe.

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Sources:

City Government of Ormoc (2016). Ormoc City Profile. Retrieved from

http://ormoc.gov.ph/?page_id=187

BUSINESS PERMITS, LICENSING AND FRANCHISING OFFICE

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