In celebration of Indigenous People’s Month, Xavier Batch’83 Armed Forces of the Philippines and Wong Chu King Foundation jointly conducted a medical missions for more than 500 indigenous people, consisting mostly of aetas, at the St. Francis Learning Center in Nibangon, Mangan Vaca Subic, Zambales.
In coordination with World Vision Philippine (WVP), the Wong Chu King Foundation (WCKF) and its volunteer visited its sponsored child (name withheld) in Lupang Pangako, Iba, Zambales. The now 2nd year High School student’s primary and secondary education is supported by the WCKF. She belongs to an indigenous community in Iba and her parent’s meager earning are not enough to support her studies.
Embattled cigarette maker Mighty Corporation and its officials asked the Department of Justice (DOJ) on Thursday to dismiss the P26.93-billion tax evasion complaint against them by the Bureau of Internal Revenue (BIR) over alleged use of fake tax stamps.
Mighty Corporation Vice President for External Affairs and Assistant Corporate Secretary Alex Wongchuking attended the preliminary investigation hearing, where he filed his counter affidavit with the DOJ panel of prosecutors.
Other respondents Mighty President and former Armed Forces Deputy Chief of Staff Edilberto Adan, Executive Vice President and retired Judge Oscar Barrientos and Treasurer Ernesto Victa also submitted their written defense to the charges.
The complaint arose from raid on Mighty’s warehouses in San Ildefonso, Bulacan on March 24 which yielded billions of pesos worth of cigarettes with fake stamps.
“Basically the search that was done was illegal. There was no legal justification for it. The evidence that was obtained is doubtful,” said Abraham Espejo, legal counsel for Wongchuking after the hearing, which was off limits to media.
“If the evidence is obtained illegally, it’s inadmissible (in court). Not only is the evidence inadmissible, it’s also questionable,” he added.
Mighty officials also urged the DOJ to consolidate the three tax evasion cases since they stemmed from the same allegation about the use of fake tax stamps on its cigarette products.
The DOJ had already finished hearing the P9.56-billion tax complaint in relation to the raid on four warehouses in San Isidro, Pampanga.
The company is also facing a P1.39-billion tax complaint stemming from the government raid on the company’s warehouse in Barangay Lagao, General Santos City on March 24.
The third complaint brings to P37.884 billion its alleged tax dues to the government. —KG, GMA News
A LAWYER of embattled local cigarette firm Mighty Corp. maintained his clients’ innocence in the P26.93-billion tax-evasion complaint before state prosecutors on Thursday.
Officials of Mighty Corp. facing P9.56-billion tax evasion charges have sought the dismissal of the case filed against them by the Bureau of Internal Revenue (BIR) at the Department of Justice (DoJ).
Their plea is contained in a 106-page counter-affidavit submitted before the DoJ.
Mighty’s executive vice president, retired judge Oscar Barrientos, vice president for external affairs and assistant corporate secretary, Alexander Wongchuking, and treasurer, Ernesto Victa, said there is no probable cause for charges of tax evasion to be filed against them.
“No probable cause exists to indict us for violations of NIRC (National Internal Revenue Code). Assuming there is probable cause for our indictment (which is denied), no grounds exist or allegations made to hold us criminally liable as corporate officers under Section 253 of the NIRC for acts which are yet to be verified and confirmed after appropriate inspection has been completed,” they maintained.
The case stemmed from the alleged failure of Mighty Corp. to pay excise taxes as supposedly discovered by the BIR and Bureau of Customs (BoC) in raids conducted on Mighty’s four warehouses in Pampanga in March.
In its complaint, the BIR accused Mighty of using fake tax stamps in its cigarette packs.
The respondents also asserted that there is no basis for the allegations of the BIR that 87.5 percent of the more than 33 million cigarette packs bore fake tax stamps because only 1 percent of the total master boxes in their warehouses in San Simon, Pampanga was inspected.
“So, any extrapolation made on the character and valuation of those goods violate Supreme Court’s 2016 decision in Pacquiao vs CTA and related cases where factual allegations regarding tax assessments must be presented on existing verifiable facts, not speculation,” the Mighty officials said.
They also lamented the alleged lack or prior tax assessment for supposed tax deficiency before the charges were filed by the BIR.
The Mighty officials argued that “the stamp verification process using Mobile Verification Devices under Revenue Regulation No. (RR) 7-2014 and Revenue Memorandum Order No. (RMO) 33-2016 are either incomplete or unreliable and therefore, void for purposes of their use as evidence in any proceedings.”
They added that since the alleged smuggled or counterfeit cigarette were already seized and detained by the BOC, the body or object of the alleged crime does not exist.
Mighty Corp. shows its support for the local farmers up north.
In line with their recent expansion, Mighty developed various Corporate Social Responsibility projects to aid millions of people nationwide.
The company also hopes that the implementation of these projects will help the economy and the country grow.
CSR projects that were implemented in North Luzon:
- Increased tobacco purchase – Mighty Corp. substantially increased their tobacco purchase in order to raise the income of local farmers significantly. This will also help Mighty compete in the tobacco industry on an equal playing field.
- Supports the use of organic Pesticides – Mighty claimed that this move will help reduce the reliance of millions of local farmers on the use of chemical-based pesticides. Mighty said that this will not only help the environment, but will also help the farmers increase their income.
- Scholarship Grants for the farmers’ children – Honoring their patriarch’s memory, Mighty’s foundation granted scholarships and educational assistance to children of local tobacco farmers.
- Provided tobacco dust to Fish Pond owners – Mighty also helped local fish pond owners fight predators that infest their ponds. The company provided them with tobacco dust, a fish pond conditioner, to help decrease the number of predators in their ponds.
- Absorbed Low-grade leaves – Mighty also purchased low-grade leaves from local farmers at very good prices. This helped the local farmers increase their income while also assuring them that their crops have a place on the local market.
It was 70 years ago when Chinese migrant Wong Chu King and his partners Ong Lowa, Baa Dy, and Ong Pay set up La Campana Fabrica de Tabacos Inc., the country’s oldest tobacco manufacturing company.
La Campana, which had it first factory in Tayabas St. Manila, specialized in Philippine-style cigars known as cortos and regaliz. These two brands were made from a blend of dark, air-cured Philippine tobaccos sourced from Cagayan and Isabela provinces in Northern Philippines. A second factory was built in 1948 in Pasong Tamo, Makati, and in 1951, the company acquired the present site of its head office.
In 1963, Wong Chu King founded the Tobacco Industries of the Philippines (TIP) in a nine-hectare property in Baranggay Tikay, Malolos, Bulacan. In 1964, the company produced American blended cigarettes using the brand names Duke, Windsor, and Tricycle.
The 1965-1982 proved to be difficult years for the company but through the perseverance and ingenuity of its founder, Wong Chu King, it was able to reestablish itself and in 1985, Mighty Corp. was set up to produce American-blended Virginia cigarettes. La Campana, meanwhile, cornered the native cigarettes industry by buying in 1993 the trademarks from Alhambra Industries, its main competitor that produced La Dicha, Rosalina, and Malaya.
In 2001, the company entered into a cigarette-manufacturing agreement with Sterling Tobacco to produce the latter’s brands.
Mighty Corp. then established its own filter rod production in 2001, built up its American blended filtered cigarettes, acquired its first Protos machine to boost production in 2003, modernized and upgraded its entire Lamina and Stem lines in 2005; and purchases its first GD packing machine in 2007.
Today, Mighty Corporation boasts of a fully integrated production and packing facility in Malolos, Bulacan.
Wong Chu King remained active in the management and day-to-day operations of Mighty Corp. until he passed away in August 1987, but the company remained in able hands. Mighty is now chaired by his widow, Nelia Wongchuking (the children sit in the board), while the firm is run by Edilberto Adan, president and chief executive officer, and retired Judge Oscar Barrientos who sits as executive vice president.
Congratulations and here is to many more decades and generations of business success.
When local cigarette maker La Campana, which later became Mighty Corp., now turning 70 this 20th day of the month and remarkably going strong, responded to allegations regarding its business practices, it did not only answer its rivals’ odious and malicious allegations point-by-point, but also rightfully played the nationalist card.
Why not? It’s the only Filipino-owned cigarette company in the Philippines with no foreign partners, no expensive expat workers in its factories and offices, and pride itself as the firm with no outward remittances of income to pay royalties, existing much longer than most of the top local and multinational tobacco firms operating in the country.
As Irving Berlin once said, “A Filipino who truly possesses a nationalist bent follows the country’s laws and performs his/her duties and responsibilities as a decent citizen, like paying the correct taxes.”
It is also truly a Filipino boon if the company plays fair, creates jobs and generates activities that yield multiplier effects on the economy, and gives the government its rightful due.
Its giant multinational rivals often asked: Is Mighty not an illicit trader or tax evader?
Well, the burden of proof is on those who accused and spite it, not the other way around. To date, none of its detractors has filed a case against Mighty. Neither has the government charged or imposed a fine on it.
Indeed, Mighty’s official multibillion-peso tax records are verifiable with the Bureau of Internal Revenue and the Bureau of Customs.
Mighty traces its beginning to La Campana Fabrica de Tabacos Inc., which was established by Wong Chu King and his partners Ong Lowa, Baa Dy and Ong Pay, as World War II approached to an end in 1945.
Undeterred by the devastation of war, they built their first factory that year on Tayabas Street, Manila, and produced native cigarettes. La Campana then specialized in Philippine-style cigars, known as matamis and regaliz. These two brands were made from a blend of dark, air-cured Philippine tobaccos sourced from Cagayan and Isabela provinces in Northern Philippines.
In 1948 they established their second factory in Pasong Tamo, Makati. Acquisition began on 1951 of the present site of the company head office at 39 Sultana Street, Makati, Rizal, which is now 9110 Sultana Street, Olympia, Makati City.
In 1963 Wong Chu King founded the Tobacco Industries of the Philippines and, in 1995, transferred its manufacturing operation in a 9-hectare property in Baranggay Tikay, Malolos, Bulacan, as the high “labor-cost” in Makati City continued to increase.
The years 1965 to 1982 were, however, difficult for the company but, through the perseverance and ingenuity of Wong Chu King, it was able to reestablish its niche. In 1985 Mighty was set up to produce low-priced, aromatic and smooth-blend brands. La Campana, meanwhile, expanded and cornered the native tobacco industry by buying the trademarks from Alhambra Industries, its main competitor that produced La Dicha, Rosalina and Malaya.
Between 2001 and 2007, the company expanded with the creation of its own filter-rod production; the building of its American blended filtered cigarettes; the acquisition of its first Protos machine to boost production; the modernization and upgrading of its entire Lamina and Stem lines; the purchase of its first modern GD packing machine that turn the firm into a fully integrated production facility in its Bulacan complex; and the first company that set up closed-circuit television cameras to closely monitor its operations in compliance with the Bureau of Internal Revenue requirements.
WongChuKing remained active in the management and day-to-day operations of the company until his death in August 1987. The board of trustees is now headed by his widow, Nelia D. Wongchuking, a philanthropist, who sits as chairman of the board, together with their children Helen Wongchuking-Chua, Marietta Wongchuking-Co Chien, Alexander D. Wongchuking. Edilberto Adan, a retired lieutenant general of the Armed Forces of the Philippines, is the president, while retired regional trial court Judge Oscar P. Barrientos sits as the executive vice president.
Economy of scales
Mighty produces 12 brands, competing in both high- and low-end variants against its multinational and monopolist rivals.
If its rivals often wondered how it can sell its products cheaply, it’s because of its excellent practice in the economy of scales, which means, among other microeconomic variables, the reduction in the per-unit cost of production as the volume of production increases.
Corporate social responsibility
Mighty maintains its own CSR program anchored on charity and cultural work mainly through the Wong Chu King Foundation that is managed by the children, their relatives and volunteers. Lately, it granted 200 scholarships to the country’s deserving dependents and beneficiaries of the tobacco growers.
The foundation works closely with religious, educational and non-governmental organizations, and has donated immensely to restore historical churches and those that were damaged by the recent typhoons.
In essence, Mighty proudly represents itself as a nationalist beacon of hope for others competing in modern business environment largely dominated by monopolists and other foreign economic interests.
The steep increase in excise taxes for tobacco products produced a dramatic reconfiguration of the market. Where once a multinational corporation enjoyed near-monopoly dominance of the market, a Filipino company has now eked out major market share.
Philip Morris-Fortune Tobacco enjoyed almost complete dominance of the local cigarette market before the imposition of more punitive “sin taxes.” In a matter of only a few years, local player Mighty Corp. has taken a significant market share by catering to lower-priced products.
Few might have heard of Mighty until recently. The fact is, the company is probably the oldest Filipino cigarette manufacturer.
Mighty traces its roots to La Campana Fabrica de Tobacos, Inc. This company was founded in 1945 by a highly entrepreneurial immigrant named Wong Chu King and several partners. The company celebrates its 70th anniversary this month, basking in the success of its strategy to win market share.
From its first factory located along Tayabas St. in Manila, La Campana produced native cigarettes as well as locally popular cortos and regaliz cigars. A second factory was built in 1948 along Pasong Tamo, Makati. In 1951, the company acquired the land along Sultana St. in Makati that now serves as the headquarters of Mighty Corporation.
In 1963, Wong Chu King founded Tobacco Industries of the Philippines (TIP) with a modern cigarette factory located in Malolos, Bulacan. From that sprawling nine-hectare factory, the company produced American-blended cigarettes using the brand names Duke, Windsor and Tricycle.
The company went through a difficult period from 1965 to 1982. The unsinkable Wong Chu King persevered, however. By 1985, the company reestablished itself as Mighty Corp., acquiring the trademarks of its rival Alhambra Industries in 1993. This enabled the company to corner the native cigarette market.
Higher labor costs in Makati forced the company to consolidate all its manufacturing at the Malolos plant. In 2001, the company entered into a cigarette manufacturing agreement with Sterling Tobacco, producing blended cigarettes using the latter’s brand names.
Between 2001 and 2007, Mighty invested in modern plants and state-of-the-art packaging facilities. This enabled Mighty to achieve a fully integrated production and packing line. This acquisition of modern manufacturing technologies prepared the company to compete head-to-head with the once dominant player in the Philippine cigarette market.
A superior marketing strategy, expanding market share in the lower-priced segments and moving up to the higher-priced segments enabled Mighty to take advantage of otherwise hostile conditions under the new “sin tax” regime. They caught the competition by surprise, to say the least.
Wong Chu King passed away in 1987, but not without establishing a corporate culture that valued long-term relationships. He left behind a legacy of corporate philanthropy that his successors sustain. Recently, Mighty put out an add celebrating the achievement of scholars supported by the company’s foundation.
The founder’s widow, Nelia D. Wongchuking now chairs Mighty’s board.
Agents of the National Bureau of Investigation (NBI) have arrested two suspects for supplying fake Mighty Corp cigarettes to a sari-sari store in Bocaue, Bulacan.
The suspects, Guillermo B. Ediesca and Jonathan E. Jimenez, were arrested for selling counterfeit Mighty Full Flavor and Menthol 100’s soft pack variants on a complaint filed by Mighty Corp., a Filipino-owned cigarette manufacturer.
Among the discrepancies confirmed by Mighty were the cigarette quality and the print packaging such as misspelling of the word “Manufactured” to “Manufacture” and the absence of a manufacturing code on the packs, among others.
Retired Judge Oscar P. Barrientos, Mighty Executive Vice President, said the fake cigarettes seized in Bulacan also alarmingly contained counterfeit BIR tax stamps.
Mighty has launched a relentless campaign against unscrupulous traders faking their brands and using bogus stamps in coordination with the NBI and the Bureau of Internal Revenue.
Last April 26, NBI-Bulacan District Office (BULDO) agents led by AIC Arnel Dalumpines conducted a buy-bust operation in a sari-sari store regularly supplied by the suspects in Bocaue, Bulacan.
Ediesca and Jimenez were immediately arrested by NBI agents after receiving marked money for their delivery of eleven rims of fake Mighty cigarettes.
The NBI filed charges against the two for violating Republic Act 8293 or the Trademark Infringement and Unfair Competition Law before the Provincial Prosecutors’ Office in Malolos, Bulacan.
Earlier, the NBI also arrested three suspects for selling several cartons of fake Mighty cigarettes of the same variants in Cebu City.