Pawnshop free essay sample

The proponents intend to put up a business that will increase the growth of the consumer in the pawnshop industry in the Philippines. They come up with a pawnshop business because it connects with their future profession as financial managers. They notice that most Filipinos become conscious on the frequent changes in the prices of our basic needs. Because of that changing status in our country, most of them are engaging in lending activities that maintain a strong growth in the industry. The proponents’ pawnshop business is a Filipino-focused business because they want progress for every Filipino by engaging in a lending activity that gives fast access, lower interest rate and very approachable transactions to the costumers. It is an essential tool to help Filipinos when they experience financial difficulties. The business aims to give every Filipino in the country a high quality of service with very low interest rate of financial intermediation during their times of financial needs. The Marketing Aspect For this feasibility study, the proponents conducted a survey and random sampling was used in choosing the respondents. When the results were tallied, the result was, 30 projected customers per day is the target market of the business. Signage, Flyers, Tarpaulins, Calendar, Shirts and Umbrellas are used as promotional tools. Management Aspect The Management Aspect had the proposed business structure of limited partnership. The business will employ 5 employees for the business. It composes the General Manager/Appraiser , Clerk and 2 security guards. Each employee will be given benefits and compensation just in accordance to the Philippine Labor Code. Policies will also be implemented for them all to follow. Technical Aspect For the business to operate, the proponents seek a located in Roman cor. Soler St. , Brgy. 293, Zone 28, District III, Binondo, Manila. The location is populated by households, establishments and has strong foot traffic. The area can accommodate at least 30 clients. Financial Aspect The Financial Aspect illustrates that the study is feasible, with the capital of P 700,000. 00 and net income of ________ on its first year of operation. Distribution among partners is divided equally. CHAPTER 2 BUSINESS CONCEPT 2. 1 OVERVIEW Pawning began in Ancient China, over 3000 years ago, and features in the written histories of Greek and Roman civilizations. The Nursery Rhyme Pop Goes the Weasel refers to it; a ‘weasel’ is a shoemakers tool and to pop is a slang term for pawning. Hence: Thats the way the money goes Pop goes the weasel. Queen Isabella of Spain pawned some crown jewels to pay for Columbus’s voyages. The word pawn comes from Latin – patinum meaning cloth or clothing – and French. As defined in the Presidential Decree No. 114 of the Philippines, pawnshop shall refer to a person or entity engaged in the business of lending money on personal property delivered as security for loans and shall be synonymous, and may be used interchangeably, with pawnbroker or pawn brokerage. It provides additional source of credit especially for small borrowers left unserved by the banking and other financial institutions in the country. Pawnshop Regulation Act of the Philippines (PD No. 114) is a declared policy of the state to regulate the establishment of pawnshops and to place their operation on a sound and stable basis to derive the optimum advantages from them as an additional source of credit; to prevent and mitigate, as far as practicable, practices prejudicial to public interest; and to lay down the minimum requirements and standards under which they may be established and do business. 2. 2 BUSINESS NAME DJN pawnshop is the chosen name of the proposed business. DJN stands for the names of the owners of the business, Deanna Jane and Joanne Nathalie. Aside from that, DJN also has different meanings. D stands for â€Å"Dependable† because our customers can depend on us with their financial needs in exchange for the security of their valuable items. J stands for â€Å"Just† because we give them reasonable appraisal. And N stands for â€Å"near to one’s heart† since we understand and feel the needs of our customers. 2. 3 BUSINESS LOGO The logo of the proposed Pawnshop is a diamond with the business name on it. The tagline is also included below the diamond and it is in a curve position to emphasize the â€Å"Smile† attitude of the employees in serving the customers. The diamond represents the quality of service of DJN Pawnshop. The yellow and black color of the logo signifies the color of the logo of pawnshop industry in general. The border of the word â€Å"Pawnshop† means security. The logo is chosen to give the market the awareness about what the business is all about. 2. 4 BUSINESS OFFERINGS DJN Pawnshop will act as a short term collateralized lender that will accept jewelries, electronics, certain musical instruments, and other objects of resalable value with the intent to provide a loan to the customer. The pawnshop will also offer other services such as electronic loading and foreign exchange. It will give convenience for the customers because they will not need to go to banks to sell their foreign currencies at a low price. The pawnshop will give higher selling price compared to banks depending on the foreign currency rate. 2. 5 UNIQUE QUALITY The proposed business offers quality of service. It is a Dependable, Just, and Near to one’s heart. Part of the quality of service that the proposed business offer is the attitude of every employee of serving with a smile. Aside from gold and other precious metals, DJN Pawnshop also accepts precious stones and any other resalable items. And it has additional services such as E-load vendo machine and foreign exchange. DJN Pawnshop aims to maintain the quality of every item being pawned. It will use electronic precious metal and stone testers to make sure that there will be no scratches when the appraiser check the purity of the precious items. These testers will give quality of service to the customers since the process is quick and easy to do. The customers will be able to get the loan fast because of the quick service that DJN Pawnshop provides. 2. 6 BUSINESS STRUCTURE DJN Pawnshop is a business in the form of general partnership. Its business structure is composed of two general managers (the partners) who will also be the appraisers of the items to be pawned, a clerk who will receive all the items and record the daily transactions of the pawnshop, and two security guards who will be responsible for securing the area of operation during daytime as well as the customers of our pawnshop. 2. 7 LOCATION In choosing the location of the business, the proponents considered the demand for having a pawnshop in the area. When the proponents looked for the location, they found out that there were only two pawnshops near the area but they are not convenient for our target market since they are located at Recto Ave. , Tondo, Manila. DJN Pawnshop will be located at Roman cor. Soler St. , Binondo, Manila since our target market is the sales personnel, vendors and residents within the area. It is very accessible for the clients of DJN Pawnshop to visit the store whenever they will obtain a loan, and exchange for foreign currencies, since it is located beside 999 Mall and 168 Shopping Mall. 2. 8 FEASIBILITY STUDY AND OBJECTIVES GENERAL OBJECTIVE: Generally, the goal of the business is to develop the Filipino lifestyle in their financial aspect by providing every Filipinos, specifically those in the vicinity, who are in need of a financial assistance through lending money with reasonable interest in return. The business is not just focusing on the profit gain but also on the welfare of every Filipinos in the country. Another goal of the business is to reduce dependency of Filipinos on moneylenders who charge high interest rates, and to facilitate the credit needs of the marginalized sector in the country. SPECIFIC OBJECTIVES: The proponents have come up with their objectives for different aspects: 1. MARKETING ASPECT To come up with a successful marketing strategies for the business. To establish the potential target market of the business precisely. To present the demand and supply of a business. To apply the result of the market research. To have a good relationship with the clients 2. MANAGEMENT ASPECT To identify all the needs for the personnel of the business. To classify the business sections and key positions of the business. To establish good objectives and guiding principles of the business. To identify the different skills and abilities of the proponents to handle the business. 3. TECHNICAL ASPECT To determine the total costing of the service. To be able to make a best quality service for the customers. To develop an effective production process to increase productivity. To determine the best sources of supplies used in the operation of the service at reasonable cost. 4. FINANCIAL ASPECT To determine the liquidity of the business for 5 years. To present the sales projection of the business. To provide financial report and its analysis. To determine the business profitability and sustainability. CHAPTER 3 SITUATION ANALYSIS 3. 1 RELATED STUDIES These days, pawnshops are popular more than ever. Not only the transactions costs on the part of the borrower are very minimal, loans are also easily obtained, provided that, an item of value can be presented as collateral. With their rapid expansion, pawnshops have definitely taken a development role. Although pawnshops are currently regulated by the Central Bank, pawnshops are admittedly the least regulated among the financial institutions. Those who desire to open a pawn clearance from the central bank, unlike other financial institutions such as finance companies. Also, branching regulations that are applied to banks are not applied to pawnshops. In addition to this, the financial reforms have been favorable to pawnshops. In particular, the lifting of the interest rate ceiling tends to improve the profitability of pawnshops. Pawnshops have been spared from such restriction. In fact, the minimum capital imposed and has remained the same till the present; whereas the minimum capital requirement for banks and other non – bank financial institution has been increased. The strong demand for the services of pawnshops made them a very attractive business venture. This has not gone unnoticed by small entrepreneurs. Pawnshops have sprouted in almost every corner of the country. However a new commercial building is completed, chances are there is one or two new pawnshops that are also opened. During the height of the financial crisis, pawnshops were very selective with regard to the kind of asset they accepted as collateral. They preferred less bulky high valued items like jewelry. Lately, with the stiffer competition, pawnshops have broadened the range of items they accept as collateral. Some pawnshops even accept appliances and later on some gadgets. The stiff competition among pawnshop has also brought down the effective lending rates charged. Presently, all pawnshops no longer impose service charges and liquidated damage fee for overdue loans. While most pawnshops still charge 4 percent per month loans others have started giving discounts, especially to highly – favored clients. There is no information regarding the uses of loans provided by pawnshops. This is because pawnshops, in practice, do not ask about the purpose of the loan, nor do they examine the repayment capacity of the borrowers since all loans are secured by chattels. Although there is a prohibition against lending an amount less than 30 percent of the appraised value of the security offered for the loan by the pawner, pawnshops may quote a lower appraised value since they make the appraisal themselves. Hence, pawnshops are not worried about loan defaults since they can sell the chattels at market price. 3. 2 INDUSTRY REVIEW The 2009 Annual Survey of Philippines Business and Industry (ASPBI) covered a total of 14,078 Financial Intermediation establishments. As shown in the graph, Pawnshop operations registered the highest number of establishments with 6,953 or comprising of almost fifty percent (49. 4%) of the total. Credit granting ranked second with 23. 4 percent and Non – bank financial intermediation third with 14. 4 percent. However, insurance pension funding, except compulsory social security recorded the least number of establishments with one percent. 3. 3 INDUSTRY KEY DRIVERS AND KEY BARRIERS Population is one factor that affects the market for either product or service. According to the definition of population, it is one of the main components of a market. A logical place to start is with the analysis of total population. The increase in population will result to the increase in credit needs, and rising population means more mouth to feed, more children to be educated and more people to be cared of. Credit is not luxury items that people will care of credit to economize. Credit becomes a necessary in order to sustain the increasing population. The market for consumer services like credit is also influenced by such factors as Education and Occupation. As observed, loan sharks are able to the businessmen better with people who are not adequately educated. These people are not aware that are interest being imposed upon them are illegal and too much. In market that is predominated with educated people, money lenders will find it hard to compare with institution like pawnshop that can provide the same credit but at a very much lower cost. Occupation and income are also factors that affect demands because people alone do not make a market, they must have money to spend and pay for the services and goods they need. It is found out that people tend to avail credit from different lending institution especially when they know that they have income by which they can in repaying their debts. The people of Binondo are very much concern about debts. They are afraid on when will they get the money to pay their debts. These threats will also be beneficial to pawnshop, since people will prefer to pawn their valuables than to encounter debts from neighbors. 3. 4 TARGET MARKET 3. 5 COMPETITION DIRECT COMPETITOR Business Name Sarmiento Pawnshop Products and Services Pawning of gold (4% Interest Rate) Remittance (LBC, Palawan Express) Current Market Tenants and Shoppers of 168 Shopping Mall Number of years in business Less than One (1) Year Sales and Marketing Strategies Partnership with LBC and Palawan Express Strengths The first pawnshop business inside 168 Shopping Mall. Weaknesses New to the market. DIRECT COMPETITOR Business Name MegaTrade Pawnshop Products and Services Pawning of gold (4% Interest Rate) Remittance (LBC, Palawan Express) Current Market Vendors and Small business owners in Tutuban Mall and Tondo area. Number of years in business 6 years Sales and Marketing Strategies Discount on diamonds Strengths Locally known pawnshop Weaknesses Accepts gold and diamond only. DIRECT COMPETITOR Business Name Cebuana Lhuillier Products and Services Pawning Remittance Insurance Bills Payment E-load Foreign Exchange Current Market Stall owners, sales employees, and shoppers in 999 Mall. Number of years in business 48 years Tagline Walang Kapantay Magpahalaga Sales and Marketing Strategies Television Commercials High Appraisal Strengths Well Known Pawnshop Business Stability Variety of Product offerings Weaknesses With Hidden Charges INDIRECT COMPETITOR Business Name M. Lhuillier Products and Services Money Changer Insurance Plans Kwarta Padala KP To-Go Telco Loading M Lhuillier Food Products Current Market B and C Number of years in business 34 years Tagline Ang Tulay ng Pilipino Sales and Marketing Strategies Television Commercials News Papers and Magazine Articles Strengths Business Stability Known to the market Variety of product offerings Weaknesses Lower transactions High Expenses INDIRECT COMPETITOR Business Name Eastwest Bank Products and Services Savings Credit cards Personnal Loan E-Banking Investments Loans (Auto,House etc. ) Foreign Exchange Current Market A and B Number of years in business 19 years Tagline Your Dream, Our Focus Sales and Marketing Strategies Television Commercial Strengths Established already Online banking facilities Weaknesses Does not offer wide variety of products High interest rate INDIRECT COMPETITOR Business Name UCPB Products and Services Savings Online Banking UCPB Connect Bills Payment Credit card Mobile ATM Van Loans Foreign Exchange Fund Transfers OFW Remittance Current Market A and B Number of years in business 50 years Tagline A Passion for Customer Satisfaction Lots of requirements needed High interest rate Possible loan Declined Sales and Marketing Strategies Television Commercials Strengths Established already Well known Business Weaknesses Not locally known High interest rates INDIRECT COMPETITOR Business Name BDO Products and Services e-Banking accounts Trust and Investments Loans Credit/debit cards Remittance Services Insurance Current Market A and B Number of years in business 45 years Tagline We Find Ways Sales and Marketing Strategies Television commercials Newspaper and magazine articles Strengths Incorporate with SM Well Known Business Locally Known Weaknesses Possible denied loans High Interest Rate Lots of Requirements when availing loans 3. 6 SWOT MIX Strengths Weaknesses Location of the Pawnshop Efficient effective Services â€Å"Smile† attitude of the employees in serving the customers. Services expansion based on the customer demands Lower interest rates High appraisal rates No hidden Charges Business is new in the market It has limited promotions Unknown to possible consumers Poor security of the location Opportunities Threats The location is highly visited High traffic of potential target market Competitors within the area Some of the customers prefer to borrow money from relatives. CHAPTER 4 BUSINESS VIABILITY 4. 1 MARKETING ASPECT MARKET DESCRIPTION Our Proposed project is an establishment that provides credit for small borrowers in substitute to other financial institution. Our pawnshop gives our customer satisfaction to obtain their financial needs by means of lending and also provide them quality and best service. Pawnshop provides additional source of credit especially for small borrowers left unanswered by banks and other financial institution. The emphasis has been on providing credit for individuals who are in urgent need of money and for ordinary customers. In terms of serving financial needs to the people, pawnshop is much different from the bank or any entity that provides loan or credit. The big difference is that, in banks, the transactions involve weeks and even months and volume of paper requirements to meet. One can also get credit from loan sharks (â€Å"5’6†). The difference though, is the interest and terms and conditions of the payment As we conduct study about the operation of our proposed project, pawnshop mostly found near the market place, residential and commercial establishments. PRODUCT/SERVICE OFFERINGS SERVICE NAME DESCRIPTION Pawning the core service e of DJN Pawnshop The proposed business offers short-term loans to clients with jewelries (precious stones and metals), watch, appliances, electronic gadgets, musical instruments, and other objects of resalable value as collaterals. Offers high appraisal rates and guarantees the safety of the item. Clients may partially pay the principal loan to extend the contract. Clients can also renew their loans 30% 60% Appraisal rate 4% Interest rate E-Load Convenient way to reload for prepaid internet and mobile phone users subscribed to major telecommunication networks. as per customer’s need Foreign Exchange (Money Changer) Quick conversion of international currencies to Philippine peso with hassle. Offers a competitive foreign exchange rates. Foreign currency rate based. TAG LINE â€Å"Ayos alahas mo rito†¦Ã¢â‚¬  The proposed business used the tag-line â€Å" Ayos Alahas mo rito† The tag-line signifies the quality of service that DJN Pawnshop is offering. It make sure the maintenance of the item’s quality. It also check the of the jewelries with an Electronic Tester to prevent scratch on the items. All items accepted are secured inside a vault and are very well taken care of. DEMAND AND SUPPLY ANALYSIS DEMAND Total Population 4,210 Potential demand 74% Total Demand 3,115 Supply Sarmiento Pawnshop 10 MegaTrade Pawnshop 15 Cebuana Lhuillier 20 M Lhuillier 20 Total 65 Demand Supply Gap Total Demand 3,115 Less: Total Supply 65 Demand supply gap 3,050 Less: Conservative Rate (20%) 610 Conservative demand supply gap 2440 Desired Market Percentage 1% Target Market per day 24 MARKETING PROGRAM (4P’s) PRODUCT/SERVICE Pawning is the main service offering of the business. Pawnshop refers to a person or entity engaged in the business of lending money on personal property delivered as security for loans and shall be synonymous, and may be used interchangeably, with pawnbroker or pawn brokerage. DJN Pawnshop also has additional services such as e-load and foreign exchange. E-load is a way to reload for prepaid internet and mobile phone users subscribed to major telecommunication networks. While, foreign exchange is the exchange of one currency for another, or the conversion of one currency into another currency. PRICE The proponents decided to offer a 60% appraisal rate on the market value of the collateral items of the costumers. DJN pawnshop charges 4% interest rate per month, holds the items for 30 days and has a 90 days grace period. The pawnshop also gives a P5 service change on every pawning transaction. All unclaimed items will be subject for auction and 25% mark-up of the value of the items pawned will be applied. PLACE DJN Pawnshop will be located at Roman cor. Soler St. , Binondo, Manila since our target market is the sales personnel, vendors and residents within the area. It is very accessible for the clients of DJN Pawnshop to visit the store whenever they will obtain a loan, and exchange for foreign currencies, since it is located beside 999 Mall and 168 Shopping Mall. PROMOTIONS Before the start of the operation of the pawnshop, an advertising campaign will be addressed and put into action. Signage should be placed within the areas around the Barangay wherein it is visible to every person who pass by. Printed materials should be disseminated showing the pawnshop’s service offerings. PROMOTION STRATEGIES PROMOTION BUDGET PROMOTION SCHEDULE 1. Promotional Flyers This will be the main marketing tool that will be utilized by the business. P 250 P 150 P 150 P 150 P 150 P 150 A week before the grand opening. December (500 pcs) Days after the grand opening January (300 pcs) Valentine’s Season February (300 pcs) Graduation Season March – April (300 pcs) School Opening/Wedding Season May – June (300 pcs) Christmas Season November – January (600 pcs) 2. Tarpaulins This will be posted especially during special occasions. P 250 P 250 P 250 P 250 Grand Opening (January) Graduation Month (March – April) School Opening (May – June) Christmas Season (December January) 3. Freebies This will be mainly given to every customers. P 600 P 500 P 500 P 600 P 500 Grand Opening (January) School Opening (June) T-shirts for the first 5 customers. Umbrella for the next 10 customers. Ball pens for the following 10 customers. Valentine’s Season, Graduation Season and Christmas Season T-shirts for the first 5 customers. Ball pens for the next 10 customers. 4. Social Networking Site Advertisement through Social Networking Sites like Facebook. This will be updated from time to time especially during occasions. Free The whole business operations 6. Privilege Card This is made to provide points for the customers that they can use as load payment upon redemption. Each card is worth P 50. P 5,000 Always available (100 pcs per year) Equivalent to P____ 7. Valentine’s Discount in Auction 10% Valentine’s Season (10% discount on the second item when the two items are bought by a single customer) PROJECTED SALES The projected sales of DJN Pawnshop is estimated as equal to the population multiplied by the target market and the percentage of the respondents who are willing to try newly-opened pawnshop within the area. 5*. 7*. 6*2 4. 2 MANAGEMENT ASPECT FORM OF BUSINESS ORGANIZATION The proposed business will be in the form of partnership to be owned by Deanna Jane A. Avila and Joanne Nathalie M. Cube. Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. It consists of two or more partners. A partnership with more than P3,000 capital must register with the Securities and Exchange Commission (SEC). CAPITALIZATION The business partners of DJN Pawnshop agreed to contribute Php750,000 each in equal terms and condition to be used in all operational expenses incurred. PARTNERS: Avila, Deanna Jane A. Php 350,000. 00 Cube, Joanne Nathalie M. Php 350,000 ORGANIZATIONAL STRUCTURE OWNERS (MANAGERS/APPRAISERS) CLERK SECURITY GUARD SECURITY GUARD JOB DESCRIPTION AND JOB SPECIFICATION Job Title: General Managers/ Appraisers Job Specification: Candidate must possess at least a Bachelor/College degree in Finance, Accountancy, Banking, Economics, Business studies or equivalent. Knowledgeable in business operations specifically in pawning. Has excellent communication skills and must be a computer literate. Has strong leadership Has at least one year experience of being a manager. Job Description: Plans, organizes, coordinates and controls all activities of the business in order to achieve the overall established objectives and targets. Presides on managing the entire transactions of the pawnshop. Deposits daily collection to the bank. Responsible for appraising all items/valuables that are brought in the pawnshop to be pawned. Job Title: Clerk Job Specification: Candidate must possess at least a Bachelor/College degree of any course. Must have at least two (2) years experience in Pawnshop or related business. Must not be engaged directly or indirectly in any activity similar to the business of the Pawnshop. Must not be convicted of any administrative, civil, or criminal case involving moral turpitude. Gross negligence or grave misconduct in the performance of his/her duties. Must be of good character. Must not have been convicted of any administrative, civil, or criminal case involving financial and/or property accountabilities at the time of his/her appointment. Job Description: Personnel who receive all the items and record the daily transactions of the pawnshop. Job Title: Security Guard Job Specification: Must not be engaged directly or indirectly in any activity similar to the business of the Pawnshop. Must not be convicted of any administrative, civil, or criminal case involving moral turpitude. Gross negligence or grave misconduct in the performance of his/her duties. Must be of good character. Must not have been convicted of any administrative, civil, or criminal case involving financial and/or property accountabilities at the time of his/her appointment. Job Description: Responsible for securing the area of operation during daytime as well as the customers of our pawnshop. COMPENSATION AND BENEFITS Compensation DJN Pawnshop will pay at least a minimum wage rate for its full time employees. According to the National Wages and Productivity of Commission, the minimum wage rate in National Capital Region (NCR) for non-agriculture as of July 2012 will be P419-P456, effective November 2012. Furthermore, under Section 22 of RA 9504, known as National Internal Revenue Code Of 1987 states that minimum wage earners shall be exempt from the payment of income tax on their taxable income: Provided, further, that the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax. Regularization of employees and further increase in salary will be evaluated according to the performance evaluation made by the Managers. Wages will be distributed every 15th and 30th day of the month in the form of pay slips. Benefits Under Philippine Labor Code, there are three mandatory benefits that should be given to the employees of DJN Pawnshop. 1. SSS (Social Security System) The Social Security System in the Philippines (Republic Act No. 8282 also known as Act of 1991) is aimed at providing protection for the SSS member against socially recognized hazard conditions, such as sickness, disability, maternity, old age and death, or other such contingencies not stated but resulted in loss of income or results to a financial burden. The employee and his/her employer(s) are to contribute for the social security benefits of the said employee in accordance to a given schedule by the Philippine Social Security System. Monthly employee contribution depends on the employees actual monthly salary. 2. MEDICAL INSURANCE The employee and his/her employer(s) are to contribute for the medical insurance of the said employee in accordance to the Republic Act 7835 on Medicare Program which is administered by the Philippine Health Insurance Corporation (PhilHealth). Monthly employee contribution depends on the employee’s actual monthly salary. The contribution schedule is provided by Phil. Health Insurance. 3. PAG-IBIG (CONTRIBUTION TO HOME DEVELOPMENT AND MUTUAL FUND (HDMF)) The employer(s) is(are) required to contribute per month not less than P100. 00 to the employee’s Home Development and Mutual Fund. In accordance to the periodic remittance schedule provided by HDMF, the employer(s) will remit this contribution, in addition to that of the employee’s, which is to be deducted from his/her payroll. 4. 13th Month Pay As provided by the Presidential Decree No. 851, the employee shall receive a bonus salary equivalent to one (1) month, regardless of the nature of his/her Employment, not later than December 24 of every year. 5. OVERTIME PAY Under Article 87, work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Computation Overtime on Ordinary Day Work on special or holiday 6. HOLIDAY PAY When the employee is required to work on legal declared holidays or special days, pawnshop needs to pay the employee twice as his/her daily salary. 7. RETIREMENT PAY If the company has employees who have reached the age of 60 years or more but not beyond 65 years old, the company needs to pay them retirement. The minimum retirement pay is one-half (1/2) month salary for every year of service. A fraction of at least six (6) months is considered as one whole year. 15 days salary based on the latest salary rate; Cash equivalent of 5 days of service incentive leave; One-twelfth (1/12) of the 13th month pay. 8. SERVICE INCENTIVE LEAVES It is in Article 95 Book III, Chapter 3 of the Labor Code of the Philippines that covers the employee’s benefit for Service Incentive Leaves, an employee who has rendered at least one year of service is entitled to a yearly five days service incentive leave with pay. 9. Meal and Rest Periods The employee is provided a one (1) hour employee benefit for regular meals, when working on an eight-hour stretch. Employees are also provided adequate rest periods in the afternoon for thirty (30