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THE FEASIBILITY OF CONSTRUCTING A THREE-STOREY

COMMERCIAL AND DORMITORY BUILDING AT THE
EASTERN VISAYAS STATE UNIVERSITY

Dr. Dioscoro Y. Mancao, Jr.

Dr. Manuel L. Pacaña
Arch. Severino Nalda
Prof. Imelda Abenio
Engr. Ramon Lim
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INTRODUCTION

The Eastern Visayas State University (EVSU) is one of the premiere technological

schools in the Eastern Visayas region. With a curricular offering of more then sixty

courses, it is the most diversified university in the region as far as course offerings are

concerned. The student population of the EVSU Main Campus alone is close to ten

thousand, easily making it the biggest university in Region VIII in terms of student base.

Complementing the EVSU main campus are its five satellite campuses, namely, EVSU

Tanauan, EVSU Burauen, EVSU Dulag, EVSU Carigara, and EVSU Ormoc. The recent

integration of the Ormoc City School of Arts and Trade (OCSAT) with a student base of

over two thousand into the EVSU Educational System as EVSU Ormoc further

strengthened the geographical presence and influence of the school.

The Eastern Visayas State University has an enviable position of literally lying at

the heart of Tacloban City. It is situated at a location that may well be the “University

Belt” version of the city, and is just about a five minutes ride to the commercial district of

Tacloban. The other schools located within the vicinity are the Leyte Normal University

(Population = 6524 students), Leyte National High School (Population = 9837 students),

Leyte Colleges (Population = 2512 students), St. Scholastica’s College of Health

Sciences (Population = 3,569 students), Liceo Del Verbo (Population = 1085) and Holy

Infant College (Population = 3192 students). On top these, the gargantuan Leyte

Grandstand, which has hosted several significant regional and national sports events, sits

right across the Eastern Visayas State University and is just a stone’s throw away from

the proposed project.

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EVSU has always aimed to provide quality education and to produce quality

graduates over the years. In consonance with this, it has continuously strived to comply

with the Commission on Higher Education’s (CHED’s) requirements along its faculty,

curriculum, facilities and equipments and library holdings. Over the years, there has been

an incessant upgrading of the faculty through its faculty development program. The

curriculum of the various courses across the different colleges was recently enriched to

ensure that the EVSU graduates would possess the essential knowledge and skills

necessary for them to compete in a global environment. The school has also purchased

several sophisticated and expensive apparatus and equipment (i.e., Theodolites for civil

engineering and geodetic engineering students, Hydraulic Bench for civil, electrical and

mechanical engineering students, Engine Room Simulator for the Marine Engineering

students, Robotics equipments for the Electronics and Communications Engineering

students, numerous computers, to name a few) over the past semesters with the end view

of modernizing its facilities. On top of these, EVSU is in a midst of undergoing a

physical metamorphosis as the Administration, with its ever dynamic, energetic, proactive

and venerable President, Dr. Catalino B. Beltran, at its helm, undertakes its ambitious

Five Year Physical Facilities Development Plan.

All these, notwithstanding, the Eastern Visayas State University will always fall

short of one AACCUP requirement for a university and that is providing a dormitory for

its students. The researchers conducted the study to determine the feasibility of

constructing a Three Storey Commercial and Dormitory Building at the EVSU main

campus not only to satisfy the AACCUP requirement but also to increase the income of
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the school to address the declining maintenance and other operating expenses (MOOE)

allocation from the National Government.

In the proposed study, EVSU will construct the Commercial and Dormitory

building at the idle lot beside the Executive House and currently occupied by the old

Supply Office. It is bounded by the Ninoy Aquino Avenue in front and Sta. Cruz Street at

the back. The building will be built either thru a bank loan scheme, a Build-Operate-

Transfer scheme or thru the income derived from the university.

Statement of the Problem

The study aimed to determine the feasibility of constructing a Three Storey

Commercial and Dormitory Building at the EVSU main campus in terms of:

1. Technical Feasibility

2. Management Feasibility

3. Market Feasibility

4. Socio Economic Acceptability

5. Financial Feasibility

Importance of the Study

The proposed project is for all intents and purposes, a service oriented endeavor

and an income generating undertaking of the University. As such, the study will give

immense benefits to the following:

Eastern Visayas State University. As a university, the school needs a dormitory

to comply with one of the physical facilities accreditation requirement for a Level 3

institute. The commercial and dormitory project will not only enhance the image and
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prestige of the school, the undertaking will also be a service oriented and an income

generating venture of the university.

School Administrators. The project is envisioned to be a self liquidating venture.

Once the capital investment is fully recovered, the project can be a source of funds for the

school to finance future projects of the school. This project, which may well be the

“Mother of all Income Generating Projects” of EVSU, will be a big boost to its cash flow

position especially during these times when all state universities and colleges are

receiving lesser and lesser allocations for their maintenance and other operating expenses

(MOOE) from the National Government.

EVSU Students. The project will provide the students of the school a residential

hall that is spacious, comfortable, safe, accessible and conducive to learning.

Parents of EVSU students. The parents of the students will also stand to gain

from the undertaking because they will not have to look far for the living quarters of their

children. They will also have the feeling of relief knowing that their children are in the

good hands of the EVSU administration.

EVSU Hotel and Restaurant Technology students. The Hotel and Restaurant

Technology students of the College of Technology also stand to benefit from the

construction of the building as it will serve as a training venue for them.

Students and Employees from other institutions. While the dormitory will

primarily cater to the EVSU students, it will also accept students from other schools and

employees from other agencies if there are still some vacancies.

Government. The national government and the local government will gain from

the project because they will be able to derive taxes from the enterprise.
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General Public. The proposed project will also be advantageous to the public in

general, especially those living within the immediate vicinity of the project, because they

will not have to go far to shop around for their needs. Added to this, the project will

undeniably provide goods and complimentary services to the nearby populace aside from

increasing the real estate values of their properties.

Scope and Limitation of the Study

The study, “The Feasibility of Constructing a Three-Storey Commercial and

Dormitory Building at the Eastern Visayas State University”, was conducted from May,

2008 to May, 2009. The study primarily dealt on the feasibility of the construction of a

three-storey Commercial and Dormitory building at the lot where the old Supply Office is

located in terms of the technical, management, market and financial feasibility of the

project and its socio-economic acceptability to the stakeholders.

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PROJECT SUMMARY

Name of Project: EVSU Commercial and Dormitory Building

Project Location:

The proposed three storey project shall be constructed at the idle lot beside the

Executive House and currently occupied by the old Supply Office. It is bounded by the

Ninoy Aquino Avenue in front and the Sta. Cruz Street at the back.

Project Description:

The EVSU Commercial and Dormitory Building comprises of a commercial

center and function room at the ground floor, a dormitory at the second and third floors,

and a utility area the roof deck. A cafeteria will be provided on the second floor to cater

to the dormitory residents. A Presidential Cottage will be constructed besides the

building.

The project will be constructed either through a bank loan scheme, a Build-

Operate-Transfer scheme or through the income derived from the university. In the bank

loan scheme, EVSU will secure a loan from one of the banks or financial institutions. In

the Build-Operate-Transfer scheme, EVSU will lease for a certain amount the said lot.

The Lessor, at his expense, will be allowed to construct the commercial and dormitory

center using the school’s specifications, derive income from the operation of the center

and turn over the facility to the school upon the expiration of the lease contract. Under

this scheme, it is envisioned that the school will derive lease rental income from one of

its idle properties and ultimately acquire possession of the building at the end of the lease

period. Finally, in the last scheme, the building will be constructed with the use of the

university’s income.
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Project Proponents:

The researchers of the study are the following: Dr. Dioscoro Y. Mancao, Jr.,

faculty of the Civil Engineering Department; Dr. Manuel L. Pacana, Vice President,

Office of the Research, Planning and Extension Services (ORPES); Arch. Severino Nalda

of the Physical Plant and Infrastructure Development Office (PPIDO); Prof. Imelda

Abenio, Head of the Extension Services Department; Engr. Ramon Lim, Director of the

Income Generating Projects, and Ms. Nenita R. Singzon and Fe L. Zabala, who served as

enumerators of the study.

Project’s Objectives:

The proposed Commercial and Dormitory facility will serve the following

functions:

1. To provide a dormitory primarily for EVSU students living outside Tacloban City;

2. To generate income for the Eastern Visayas State University;

3. To comply with a CHED requirement that a university should provide a dormitory

for its clients;

4. To cater to non-EVSU students, guests, travelers, transients and other visitors who

would like to use the facility;

5. To offer commercial spaces at the ground floor for prospective investors;

6. To provide a function room at the ground floor for seminars, workshops and other

related activities;

7. To serve as a training venue for students taking up Hotel and Restaurant

Technology (HRT) courses; and

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8. To provide a convenient, opportune and relaxing cottage for the President of the

University and school guests.

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TECHNICAL STUDY

The project involves the construction of a commercial and dormitory three-storey

building along Ninoy Aqunio Avenue, Quarry district, Tacloban City. It will be

constructed at the vacant lot occupied by the old Supply Office and situated beside the

Executive House. The Technical study in essence will center on the existing utilities,

present land use, access roads and streets, the site development plan, the building and its

facilities, the floor plans, the elevation plans, functional design requirements, activity and

user identification, area facility indices and the building space program.

Existing Utilities

Power Supply.

There are a number of existing utilities that the school can take advantage of. The

Eastern Visayas State University gets it power from the Leyte Electric Cooperative II or

LEYECO II that comes from the PNOC geothermal power plant located in Tongonan,

Ormoc City. The said power plant is the second largest geothermal power plant in the

world. LEYECO II provides the institution with a steady and stable source of power

supply. EVSU also has its standby generator located beside the ME/EE Laboratory

should there be power outages. The proposed project will make use of the existing power

supply. Another standby generator for exclusive use of the proposed project will be made

available for the dormitory residents and the commercial space clients.

Transportation System

As mentioned earlier, the Eastern Visayas State University has an enviable

position of literally lying at the heart of Tacloban City, being a few minutes drive from

the city’s commercial district. It is situated at a location that may well be the “University
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Belt” version of the city. Against such a very lucrative and desirable backdrop, it is

little wonder why the public transport system in the vicinity is very well developed.

Public utility vehicles such as jeeps, multicabs and tricycles abound and provide a

reliable transport service to the schools’ students and personnel. Moreover, the symbiotic

relationship between the two entities ensures the continuous flow of such a service.

Communication System

The communication system in the Quarry district is very well developed, given

the commercial nature of the area. The Eastern Visayas Telephone Company

(EVTELCO) of the Lopez Group of Companies, SMART, GLOBE and Talk and Text are

the major communication service providers not only in the vicinity by the whole of

Region 8 as well.

Internet Service Providers

EVTELCO, SMART and GLOBE offer the all-important internet service in the

locale. The proposed project will avail of the available communications services.

Water Supply

The potable water of the Eastern Visayas State University is provided by the

Leyte Metropolitan Water District (LMWD). Unfortunately, because of the higher

elevation of some of the buildings located inside the campus and the great number of

LMWD concessionaires, water supply is at times inadequate. This is especially true

during the dry seasons. To address this concern, the EVSU administration has constructed

cisterns and purchased pumps to service the problematic areas with inadequate supply of

water.
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Because the project will be situated at the old Supply Office, which is deemed at a

lower elevation than the other EVSU buildings, LMWD will be able to supply more than

adequate supply of potable water. A pump, however, will be required to raise the water

from the ground floor to the second floor, third floor and the roof deck. A stainless steel

water tank will be placed at the roof deck to serve as a virtual reservoir.

Waste Water Disposal

To avoid water contamination and other health related problems, the commercial

and dormitory building will be provided with a drainage canal that will freely flow to the

city’s existing waste water system in the area with the Mangonbangon river as the

ultimate destination.

Solid Waste Disposal

The existing garbage disposal unit under the maintenance of the local government

unit and the school administration will collect solid waste materials. There will be proper

segregation of solid waste and dormitory dwellers will be taught to implement the three

R’s (Reduce, Re-use and Recycle) in minimizing waste. Both a waste materials recovery

facility and solid waste bins will be provided at the site. A suitable septic tank, with its

digestive and leaching chambers, will also be constructed.

Present Land Use

The old Supply Office currently occupies the proposed site of the project. The

structure is deteriorating and it will be demolished to give way for the construction of the

three-storey commercial and dormitory building.

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Access roads and streets

The roads and streets that will provide access to the project site are the Ninoy

Aquino Avenue in front, the Santa Cruz Street at the back and the Salazar Street on the

side. The proponents of the research are also proposing a drive thru road that will connect

both Ninoy Aquino Avenue and Santa Cruz Street to afford greater accessibility to the

project. There will be a standard parking lot in front of the ground floor which will house

the commercial stalls of the building.

Because of the project’s proximity to the downtown district of Tacloban City and

because it is in the so called “University Belt” district of the city, it is considered to be

very accessible to the project’s prospective clients (i.e., students, travelers, visitors,

customers etc.) making the project a very viable and feasible proposition.

Environmental Quality

Though the site is surrounded by a number of access roads, the level of noise

coming from the vehicles passing along the access roads is minimal compared to the

hotels and other related establishments in the downtown area. The site has more space

that can be planted with buffer strips and other shrubs to minimize the degree of noise,

smoke and other factors, which may adversely affect the health and convenience of the

clients. A very thorough and elaborate landscaping of the location is in the offing to

enhance further the ambiance of the site.

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Preliminary Plans

The Preliminary Plans will include the following:

1. Preliminary Plans for Building Structures. This includes, among others, the floor

plans for the Ground Floor, Second Floor, Third Floor and Roof Deck, the

different elevations of the building and the plans for the commercial spaces,

dormitory, restaurant, and function rooms. (Refer to the annexes - Architectural

Program)

2. Spatial Plans. These provide schedules showing the spaces provided for the

various types of rooms. (Refer to the annexes – Architectural program)

3. Site Development Plan. This provides the portion of the lot that is utilized for the

Three storey commercial and dormitory building. The plan shows the site grading,

the access road, landscaping and vehicle parking. (Refer to Architectural Plans)

4. Preliminary Plans for Utilities. These plans include plans for the plumbing,

electrical and sewage disposal facilities. (Refer to the Architectural Program)

5. Construction Resources and Availability. The manpower requirements which

include skilled and unskilled workers and supervisory personnel and the

availability of these resources are discussed here.

6. Cost Estimates. The Cost Estimates is discussed in detail in the financial

feasibility.
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MANAGEMENT STUDY

The Management Study discusses the personnel management, organizational

structure, the functions and qualifications of the personnel, and the dormitory and

commercial space management either thru a Build-Operate-Transfer scheme, a bank loan

scheme, or thru the income derived from the school scheme.

Build-Operate-Transfer (BOT) Scheme

Under the BOT scheme, the Eastern Visayas State University will lease for a

certain amount the said vacant lot where the old Supply Office is located. The Lessor, at

his expense, will be allowed to construct the commercial and dormitory center using the

school’s specifications, derive income from the operation of the center and turn over the

facility to the school upon the expiration of the lease contract. Under this scheme, it is

envisioned that the school will derive lease rental income from one of its idle properties

and ultimately acquire possession of the building at the end of the lease period.

Consequently, in the BOT set-up, the EVSU administration does not need to

manage the facility. The Lessor will manage and run all the operations in the project. The

Lessor will also be responsible for securing the commercial space and he may have to

provide security guards if there is a need to do so. EVSU, however, will require the

Lessor to issue a number of post dated crossed checks representing lease rental payments

for the entire duration of the lease period before it will sign the Lease Contract with the

Lessor. The EVSU Cashier will then deposit these crossed checks, which are payable to

EVSU, when they fall due.

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The BOT scheme is the least risky among the three schemes because there is no

capital investment on the part of the school that is required. EVSU will not need to hire

personnel to operate the facility because it is the responsibility of the Lessor.

Nonetheless, the school will only derive a limited fixed income from the leased property.

The EVSU administration should also see to it that the Lessor will strictly follow the

plans and specifications of the building so that the building will be structurally safe.

Bank Loan Scheme and Income from the School Scheme

The management aspects of the dormitory and the commercial space under the

Bank Loan Scheme and the Income from the School Scheme will be the same because

the school itself that will run and manage the facility under the two formats.

Personnel Management

The personnel management talks about the organizational structure of the

commercial space and dormitory, personnel requirement, functions and qualifications,

and hiring and tenure of employment.

Organizational Structure

The study, “The Feasibility of Constructing a Three-Storey Commercial and

Dormitory Building at the Eastern Visayas State University”, is fundamentally a service-

oriented and income generating project of the university. It will be operated by the EVSU

administration with personnel being part of the EVSU system.

Figure 1 presents the organizational structure of the commercial space and

dormitory.
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EVSU PRESIDENT

INCOME GENERATING PROJECTS

DIRECTOR

COMMERCIAL AND DORMITORY

SUPERVISOR

FRONT DESK CLERKS

SECURITY GUARDS UTILITY WORKERS HRT PRACTICUMERS

Figure 1. Organizational structure for the Commercial and Dormitory Project

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Personnel Requirement

The personnel requirement of the project is as follows:

1. Commercial Space and Dormitory Supervisor (1)

2. Front Office Clerk (2)

3. Security Guards (3)

4. Utility Workers (2)

5. EVSU Hotel and Restaurant Technology practicum students

Personnel Qualifications

Commercial Space and Dormitory Supervisor. (Designated EVSU faculty or

employee or a new hire) He/she must be a graduate of any four year course with at least

three years experience in managing a business. He/she must possess leadership skills and

good communication and interpersonal skills. He/she must be honest, hardworking and

willing to work at flexible time schedules. And at certain times, he/she may be required to

work beyond office hours. He/she must be self-driven, proactive, goal oriented and can

work with minimal supervision.

Front Desk Clerk. (Non-teaching personnel) He/she must be a graduate of any

four year course, preferably related. He/she must be between 20 to 26 years old. He/she

must be computer literate and must possess civil service eligibility. He/she must be

honest, hardworking and must possess good communication and interpersonal skills and

pleasing personality. He/she must be willing to work at either the day shift or the night

shift.
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Security Guard. (Security Agency/Contractual) He/she must be a college graduate

or a college level individual. He/she must be honest, hardworking, trustworthy and

obedient. He/she must be willing to work in three different work shifts.

Utility Worker. (Agency/Contractual) He must be at least a high school graduate.

He must be honest, hardworking, trustworthy and obedient. He must be willing to work at

different work shifts.

Duties and Responsibilities

Commercial Space and Dormitory Supervisor. He/she is in charge of the overall

supervision of the commercial space and the dormitory. He/she is responsible for

directing, controlling and supervising all activities to ensure the smooth operation of the

project. He/she sees to it that the Lessor(s) of the Commercial Space(s) strictly follow the

terms and conditions of the Lease Contract(s). He also attends to the needs of the

dormitory residents. He/she also supervises the Front Desk Clerks, the Security Guards,

the Utility Workers as well as the EVSU hotel and restaurant practicum students who are

assigned in the restaurant and the dormitory in coordination with the HRT faculty

handling the practicum students.

Front Office Clerk. He/she assists the Supervisor in the operation of the

dormitory. He/she receives and attends to the dormitory residents, facilitates room

reservation and does other clerical jobs. He/she also assists the Supervisor in

implementing the rules and regulations of the dormitory.

Security Guards. They provide security to the dormitory and its residents. They

watch over and protect the dormitory and its residents 24 hours a day. They also assist in
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implementing the rules and regulations of the dormitory. They see to it that the residents

and their visitors properly log in and log out.

Utility Workers. They are responsible for the cleanliness of the dormitory and its

vicinity. They may also perform other tasks that the Commercial and Dormitory

Supervisor and Front Desk Clerk assign to them.

Hiring and Tenure of Employment

The Human Resource Management Office will be in charge of hiring the

employees. The terms of employment will be based on the Civil Service Labor Law. It

has to be noted that in spite of the magnitude of the project, there will only be three new

EVSU employees that will be hired. They are the Dormitory and Commercial Space

Supervisor (i.e., if the President decides not to appoint anyone but to get a new hire) and

the two Front Desk Clerks. The guards and utility workers are contractual agency

workers. Of course, the staff will have the full compliment of a number of EVSU Hotel

and Restaurant Technology (HRT) practicum students who will assist them in the day to

day operations of the restaurant and the dormitory.

Commercial Space Management

The Commercial Space at the ground floor of the building will be leased to

interested parties in part or as a whole. The prospect to be able to lease a commercial

space will be on a first come, first served basis. An interested party who wants to lease

the commercial space either in part or as a whole will have to signify his intentions in

writing and submit his proposal to the EVSU administration. He may also be required to

show proof of his financial capacity to pay and provide information of his other

businesses.
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If the EVSU administration accepts his proposal, the interested party will be

required to issue a number of post dated crossed checks representing lease rental

payments for the entire duration of the lease period before there will be any contract

signing between the EVSU administration and the interested party. The EVSU Cashier

will then deposit these crossed checks, which are payable to EVSU, when they fall due.

Once the Lease Contract has been signed, the interested party, who will now be

referred to as the Lessor, will have to abide by the terms and conditions stipulated in the

Contract. The EVSU administration reserves the right to rescind and cancel the Lease

Contract if the Lessor violates any of the provisions set therein.

Dormitory Cafeteria Management

The management of the dormitory cafeteria will be done by a canteen

concessionaire who will be chosen by a specially formed EVSU administration and

faculty committee from among the number of prospective applicants who will be required

to submit their respective bids to operate the dormitory canteen. Initially, this EVSU

cafeteria committee will peg the cafeteria space rental at ten thousand pesos per month.

The prospective concessionaire who will submit the best offer will have the right to

operate the canteen for a period of three years.

Dormitory Management for Residents

The three-storey EVSU Commercial and Dormitory project is both an income

generating and service oriented venture of the University. As such, the dormitory will

cater primarily to the EVSU students who hail from towns and municipalities outside of

Tacloban City. The prospect or opportunity to become a dormitory resident will be on a

first come, first served basis. However, if there will still be vacant bed spaces after the
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start of classes every semester, the EVSU administration reserves the right to accept

students from other schools and employees from the private or public sectors and even

transients to maximize the utilization and earning potential of its facility.

For new EVSU residents, they have to fill up some pro forma forms that will be

signed by different designated signatories for approval. They will have to present proof

that they are really bona fide EVSU students (i.e., presenting their current enrolment

forms, student identification cards, etc.) and they are of good moral character before their

applications will be processed. The Certificate of Good Moral Character will be issued by

the Head of the Department where the student is currently enrolled. Upon approval, they

will pay their dormitory fees equivalent to a one month deposit and one month advance

bed space rental to the Cashier and proceed to the Accounting Department for proper

recording of payment. Afterwards, they will proceed to the office of the Front Desk Clerk

for their room assignments and the schedule of their orientation.

For old EVSU dormitory residents, they have to pay a reservation fee at the end of

every semester which corresponds to a one-month advance bed space rental. The said

amount is non-refundable and non-transferable in the event that the residents decide not

to continue their stay in the dormitory the following semester regardless of the reason.

For non-EVSU students, they also have to show proof that they are bona fide

students of another school and they are of good moral character before their applications

will be processed. They will undergo the same process the new EVSU residents will go

through (i.e., paying a one month deposit and one month advance bed space rental, etc.).

They will, however, be charged higher fees than their EVSU counterparts. The monthly
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dormitory fee for the EVSU student is P1000.00 per person while the monthly dormitory

fee for non-EVSU student is P1200.00 per person.

For employees who want to avail of the dormitory services, they have to present

their employee identification cards and other credentials. The employees will sign an

agreement to allow EVSU to conduct background check on them if the administration

believes that it is necessary to do so. They will undertake the same process the new

EVSU residents will go through before they will be allowed in the dormitory.

Nevertheless, like the non-EVSU students, they will be charged higher fees than their

EVSU counterparts. The dormitory monthly fees of employees will be P1500.00 per

person.

The dormitory will also accept transients when there are vacancies. The rate will

be set at P100.00 per day per person. The school will be the one to provide beddings for

the transient resident.

Rules and Regulations for Dormitory Residents

The following are some of the house rules and regulations of the residents in the

dormitory:

1. All dormitory residents are required to pay their dormitory fees at the EVSU

cashier on the first week of every month.

2. All dormitory student residents are required to give photocopies of their class

schedules to the Front Desk Clerk at the start of each semester.

3. All dormitory residents are to coordinate with the Front Desk Clerk with regards

to their room and bed space assignments.

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4. All dormitory residents are required to sleep on their assigned beds and are not

allowed to exchange beds with other occupants.

5. All dormitory residents are required to log in and log out at the Front Desk Office

whenever they enter or leave the dormitory.

6. All dormitory residents are to present their Dormitory IDs at the Front Desk

Office whenever they log in or log out of the dormitory.

7. All dormitory residents are required to be inside the dormitory before curfew

hours. The curfew hour during school days is 10:00 pm while the curfew hour

during weekends is 11:00 pm.

8. All residents are to inform the Front Desk Clerk if they plan not to sleep in the

dormitory on a particular day. They are also to tell the Front Desk Clerk where

they plan to sleep on that given day.

9. All dormitory residents are not allowed to let somebody else (friends, relatives

and the like) sleep in their beds when they plan not to sleep in the dormitory on a

particular day.

10. All residents are to entertain their visitors only at the visitor’s lounge. No visitors

are allowed to enter the resident’s bedroom. No visitors are allowed inside the

dormitory after the curfew hour.

11. All dormitory residents are required to inform the Front Desk Clerk if they are

sick or if they have any for of ailment so that the Front Desk Clerk can make

arrangements the EVSU physician to prevent a possible outbreak of the disease.

12. All lights and faucets should be turned off when not in use.
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13. All dormitory residents are required to declare all electrical devices that they

intend to bring inside the facility. They will be charged an additional fee for every

device that they will bring inside the dormitory.

14. All dormitory residents are not allowed to bring in television sets in the

bedrooms.. A television set will be provided at the Visitor’s Lounge area on each

floor of the dormitory.

15. All residents are required to wash their laundry at the laundry area.

16. All dormitory residents are prohibited from hanging their laundry inside their

rooms. The utility area at the roof deck will serve as the laundry drying area for

all the dormitory residents.

17. All residents are required to observe silence at any time of the day as some of the

students may be studying.

18. All residents are to respect the personal belongings of his room mates. A

dormitory resident will be dismissed from the dormitory if he/she is found

stealing the belongings of another resident.

19. All residents will are responsible for making their rooms clean.

20. All dormitory residents are to throw their garbage inside the garbage cans. They

are also required to practice waste disposal segregation.

21. Cooking one’s own meal is strictly prohibited inside the dormitory.

22. The dormitory residents are prohibited from smoking and drinking alcoholic

beverages within the dormitory premises.

23. The dormitory residents are prohibited from using banned and illegal substances

inside the dormitory.

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24. The dormitory residents are prohibited from fighting inside the dormitory.

25. Gambling and other games of chance are strictly forbidden inside the dormitory.

A dormitory resident can be dismissed from the dormitory if he/she continually or

intentionally disobeys the rules and regulations set by the EVSU administration. He/she

can also be dismissed outright if he/she commits a very serious infraction like

insubordination, actions resulting to damage to life or property, and so on. Once a

dormitory resident has been dismissed for cause by the EVSU administration, he/she will

no longer be allowed to make use of the facility again.

 27

MARKET STUDY

The Market Study focuses on the supply and demand analysis for the commercial

space at the ground floor, and the dormitory at the second and third floors. The Market

Study for the Build-Operate-Transfer (BOT) scheme, the Bank Loan scheme and the

Income Generated from the School scheme will fundamentally be the same because the

proposed project will cater to the same target market regardless of the means by which

the building will be financed.

Demand and Supply Analysis for the Dormitory

Assumptions for Market Study

The following assumptions are made for the Market Study of the dormitory:

1. It is assumed that only three (3) percent of the EVSU students will avail of the

dormitory services;

2. It is assumed that only one (1) percent of the non EVSU students from the nearby

schools will avail of the dormitory services; and

3. The building plans and specifications is presumed to be followed strictly (i.e., the

dormitory will have a total of 200 beds).

These very conservative assumptions are made to ensure that the study will obtain a very

realistic demand and supply figure for the facility.

The proponents of the study believe that there will be a demand for an EVSU

dormitory facility because of the following reasons: 1.) Although the dormitory rental is

about P200.00 higher than some of the boarding houses in Tacloban city, it is new, safe,

spacious, and conducive to learning; 2.) Since the commercial and dormitory building is

made of concrete and is virtually isolated from the congested Quarry district, it is not a
 28

fire hazard structure; 3.) It is conveniently located just across the university thus the

dormitory residents can save on their transportation expense. The savings that they will

be make by just merely walking to school may perhaps even be more than P200.00; 4) It

is provided with a dormitory supervisor, front desk clerks, security guards and utility

workers who will look after the safely and welfare of the dormitory residents; 5.) It has a

standby generator; and 6.) Some of the more financially well-off EVSU students will be

more than willing to pay a small premium on their lodging expense in exchange for the

amenities that the EVSU dormitory will offer.

Market Demand Analysis for Dormitory

Table I discloses the enrolment of EVSU students and the percentage growth from

School Year 2000-2001 to School Year 2008.2009.

 29

TABLE I

ENROLMENT OF EVSU STUDENTS FROM

SY 2000-2001 TO SY 2008-2009

School Year Enrolment Increase/Decrease Percentage

in enrolment Growth
2000-2001 6345
2001-2002 6774 +429 +6.76
2002-2003 7240 +466 +6.88
2003-2004 8384 +1144 +15.80
2004-2005 8817 +433 +5.16
2005-2006 8992 +175 +1.98
2006-2007 9052 +60 +0.67
2007-2008 9121 +69 +0.76
2008-2009 9273 +152 +1.67
Average Growth over Past 9 Years = +5.39%
Average Growth over Past 4 Years = +1.27%

As reflected in Table II, the enrolment of EVSU has grown from 6345 students to

9273 students from SY 2000-2001 to SY 2008-2009. This represents an average growth

of +5.39 percent over the past 9 years. The highest increase in the enrolment figures

occurred during the School Year 2003-2004 when the EVSU student population increased

by 1144 students, or a 15.80 percent increase in growth. The huge increase in the

enrolment figure was mainly brought about by then former President Bonifacio

Villanueva’s plan to increase the number of sections in each department of every college.

It is worthy to note, however, that the average growth of the enrolment at EVSU

over the past four years has considerably slowed down to a measly +1.27 percent. In

hindsight the EVSU student population actually increased by 2928 students over the past

nine years. But it only managed increased by 456 students over the last 4 years. The slow

pace in growth during this period has been attributed primarily to the lack of classrooms
 30

and the ever-dwindling Maintenance and Other Operating Expenses (MOOE) budget the

establishment receives from the National Government.

Table II divulges the enrolment of the other schools near the Eastern Visayas State

University for the School Year 2008 to 2009.

TABLE II

ENROLMENT OF OTHER SCHOOLS NEAR EVSU

FOR SY 2008-2009

Name of School Student Enrolment

1. Leyte Normal University 6524
2. Leyte National High School 9837
3. Leyte Colleges 2512
4. St. Scholastica’s College of Health Sciences 3569
5. Liceo Del Virbo University 1085
6. Holy Infant College 3192
TOTAL 26,719

Employing the assumptions made at the start of the Market Study, the market

demand for the dormitory is

9,273 EVSU students x .03 = 278 EVSU students

26,279 non EVSU students x .01 = 263 non EVSU students

TOTAL = 541 students.

Market Supply Analysis of Dormitory

Assuming that the building plans and specifications will strictly be implemented,

there will be a total of 200 beds in the dormitory. Since it is projected that a total of 541

EVSU and non EVSU students who will avail of the services of the facility, the demand

for the dormitory far outnumbers the supply. And, if the student population in the
 31

abovementioned schools is projected to grow by a conservative one (1) percent a year,

this will further increase the gap between the market demand and market supply for the

dormitory service.

Market Demand and Supply for the Commercial Space

The proposed three storey Commercial and Dormitory building will be situated at

the vacant lot where the old Supply Office stands. The target market for the Commercial

Space will primarily be the students and employees of the Eastern Visayas State

University. It will also cater to the students and employees of the nearby schools (i.e.,

Leyte National High School, Leyte Normal University, Leyte Colleges, St. Scholastica’s

College of Health Sciences, Liceo Del Verbo University, City Central Primary School and

Holy Infant College) and the people residing in the Quarry District.

Again, the proponents of the study believe that there will be a great demand for

the commercial space because: 1.) The commercial and dormitory edifice is located at the

“University Belt” version of Tacloban City. There are a total of 35,552 students

distributed in the seven schools located in this so-called “University Belt” district. This

does not even include the employees of the said schools who number by the hundreds.

The EVSU Main Campus alone employs more than 300 personnel while Leyte Normal

University employs more than 200 workers; 2.) The commercial space rental of only

P300.00 per square meter is very reasonable. A number of commercial establishments in

the Quarry district where EVSU is located are paying their 15 to 20 square meter

commercial space between P10,000.00 to P15,000.00 a month depending upon their

proximity to EVSU and the other schools. All things considered, the P300.00 per square

meter rate will be a very attractive proposition to many businessmen; 3.) The 312.6
 32

square meter commercial space can be rented in part or as a whole; and 4.) Some

commercial establishments, notably fastfood chains, commercial banks, etc, have a

minimum space requirement for them to consider any site. Fastfood chains, for instance,

require that the commercial space should be at least 300 square meters for them to

consider the location. This puts the EVSU commercial space at a distinct advantage

because there are only a handful of establishments in the vicinity of the proposed project

which can comply with such a stringent space requirement.

SOCIO-ECONOMIC ACCEPTABILITY

The study used the descriptive method of research to determine the socio-

economic acceptability of the project. This research method was deemed to be the most

appropriate f the study as it is designed to estimate the extent to which different variables

are related to one another in the population of interest.

Research Design

This method ascertains the condition obtaining in the locale of the study. It looked

into the socio-economic acceptability of the project in terms of the following: 1.) The

need to construct a three-storey commercial and dormitory building in the EVSU Main

Campus; 2.) The plan to use the idle Old Supply Office lot as the site for the proposed
 33

three-storey commercial and dormitory building; 3.) The need to provide commercial

facilities, dormitory facilities, function room facilities and other related services in the

commercial and dormitory building; 4.) The plan to locate the commercial facilities on

the first floor of the building; 5.) The plan to locate the dormitory facilities on the second

and third floors of the building; 6.) The plan to provide convention facilities, guest

rooms, executive suites and other related services on the roof deck of the said building;

7.) The benefits that project will provide to the EVSU community (administrators,

faculty, non-teaching personnel, students and nearby residents); 8.) The financial gains

that the project will provide for EVSU; and 9.) The project will be a venue for training

Hotel and Restaurant practicum students aside from providing possible employment to

EVSU graduates.

Frequency counts, percentages and weighted means were the major statistical

tools used in the study.

Research Respondents

The respondents of the study were EVSU BS in Business Administration (BSBA),

BS in Mechanical Engineering (BSME), BS in Industrial Engineering (BSIE), BS

Statistics, AB in Economics, BS in Information Technology, BS in Education (BSED),

BS in Accountancy (BSA), BS in Geodetic Engineering (BSGE), BS in Civil Engineering

(BSCE) and ISLS students who were enrolled during the First Semester of School Year

2007 – 2008. Aside from the EVSU student respondents, the study also included EVSU

faculty and administration personnel and private individuals as its respondents.

A total of 479 students, 28 faculty and administration personnel and 108 private

individuals were identified as respondents in the study. Since there were 9121 students
 34

and 612 EVSU employees during the SY 2007-2008 period, the sample sizes represent

five percent of the student population and 4.5 percent of the EVSU employee population.

Research Instruments

A questionnaire was prepared by the researchers to gather the desired data. The

first part of the instrument contained the items on the personal data such as name, age,

gender, stakeholder grouping (administrator, faculty, non-teaching staff, student or private

individual), course and year level. The second part of the questionnaire included

information on the socio-economic acceptability of the project.

Data Gathering Procedure

Permission from the President of the Eastern Visayas State University was

obtained by the researchers before the administration of the final copy of the survey

questionnaire on the socio-economic acceptability of the construction of the three-storey

commercial and dormitory building. The researchers sought the assistance of the

employees and student assistants of the Office of the Research, Planning and Extension

Services (ORPES) to help them in administering and retrieval of the questionnaires. The

researchers, however, personally explained the items of the questionnaire and more

specifically how to accomplish it properly and correctly to the assistant researchers

before they were allowed to go to the field.

Method of Analysis

The data collected was organized and subjected to different statistical treatments

in order to answer the socio-economic acceptability of the proposed project. To have a

better understanding on the statistical treatment that was used, the following discussion

on the methods of data scoring was made.

 35

Data Scoring. In order to quantify the data collected, the following scoring with

their corresponding adjectival description or interpretation were adapted. All raw scores

were transformed into the scaling of 1, 2, 3, 4 and 5. The said scale had a standard

description in the study. The arbitrary choices of the weights were patterned from

previous studies. The following are the arbitrary assigned weights for the purpose of

quantifying the data:

Socio-economic acceptability of the project Weight

4.51 – 5.0 (Strongly Agree) 5

3.51 – 4.5 (Agree) 4

2.51 – 3.5 (Undecided) 3

1.51 – 2.5 (Disagree) 2

1.0 – 1.5 (Strongly Disagree) 1

The data gathered in this study were scored, tallied, tabulated into frequency

counts in accordance with the answers to the specific problems formulated.

Statistical Treatment. To present the socio-economic acceptability of the

proposed venture, frequency counts, percentages and weighted means were used using

the formula hereunder.

P (%) = Frequency x 100 x 100

Total no. of cases

Weighted means = Summation [ F5W5 + F4W4……+ F1W1]

N

Where: P = percentage

F = frequency

W = weight
 36

N = total number of cases

Profile of the Respondents. The respondents of the study included the different

stakeholders of the university because they will be the ones who will be directly affected

by the proposed project. The profile of the respondents was based on whether they were

students, faculty and non teaching personnel or private individuals. The private

individuals included as respondents are some of the private individuals living in the

vicinity of the Eastern Visayas State University.

Table III divulges the profile of the respondents in terms of their classification and

size.

TABLE III

Profile of the Respondents

Stakeholder Group Frequency Percent

Students 496 78.5
Teaching and Non teaching 28 4.4
personnel
Private Individuals 108 17.1
TOTAL 632 100.0

A perusal of Table III reveals that out of a total of 632 respondents, the students

accounted for 78.5 percent, the faculty and administrative personnel accounted for 4.4

percent and private individuals accounted for the remaining 17.1 percent.

Socio-Economic Acceptability. Tables IV, V, VI and VII disclose the

acceptability of the project to the different stakeholders of EVSU. The socio-economic

 37

acceptability was in terms of the need to put up a commercial and dormitory facility at

the Main Campus and the supposed benefits the project will provide to its stakeholders.

Table IV exposes the socio-economic acceptability of the project in so far as the

EVSU students were concerned.

TABLE IV

SOCIO ECONOMIC ACCEPTABILITY OF THE PROJECT

TO THE STUDENTS

Mean Interpretation
1. Do you agree that there is a need to construct a 3.94 Agree
three-storey commercial and dormitory building in
the EVSU main campus?
2. If you agree, are you amenable to use the Old 3.55 Agree
Supply Office lot as the site for the proposed three-
storey commercial and dormitory building?
3. Do you agree that there is a need to provide 3.83 Agree
commercial facilities, dormitory facilities,
convention room facilities, hostel facilities,
executive suites and other related services in the
commercial and dormitory building?
4. Are you amenable to locate the commercial 3.70 Agree
facilities on the ground floor of the said building?
5. Are you amenable to situate the dormitory 3.72 Agree
facility on the second and third floor of the said
building?
6. Are you amenable to place function room 3.43 Undecided
facilities, guest rooms and other related services at
the roof deck of the said building?
 38

7. Do you agree that the construction of the 3.88 Agree

commercial and dormitory building will be
beneficial to the EVSU Community
(administrators, faculty, non-teaching personnel,
students and nearby residents0?
8. Do you agree that the proposed project will 3.81 Agree
provide income to EVSU?
9. Do you agree the project will provide possible 3.92 Agree
on-the-job training and employment opportunities
to the EVSU students?
Grand Mean 3.75 Agree

A close scrutiny of Table IV shows that the student respondents agreed that there

is a need to construct a three-storey commercial and dormitory building at the EVSU

main campus. They were amenable to the plan to construct the said building at the vacant

lot where the old Supply Office is located. It was alright for them to situate the

commercial center on the ground floor area and the dormitory on the second and third

floors of the edifice. They also deemed that the project will be beneficial to them and the

other stakeholders of the school and it will provide on-the-job training and possible

employment opportunities to the EVSU students. Finally, the student respondents

concurred that the project will afford income to the University. The major implications of

these findings show that the clients of the institution, the students, agree that the proposed

undertaking will benefit them and is socio-economically acceptable as far as they are

concerned.

The next table, Table V, divulges the socio-economic acceptability of the project

in so far as the school administrators and faculty respondents of EVSU were concerned.
 39

As disclosed in Table V, the EVSU administration and faculty respondents agreed

that there is a need to construct a commercial and dormitory edifice. They were amenable

to the idea of situating the structure at the vacant lot where the old Supply Office

currently stands. They strongly agreed on the suggestion to provide commercial facilities,

dormitory facilities, function room facilities, hostel facilities, and other related services in

the commercial and dormitory building. They consented to locate the commercial space

at the ground floor and the dormitory at the second and third floors of the structure. They

strongly agreed that the proposed venture will benefit the EVSU community and will

provide on-the-job training and employment opportunities to the EVSU HRM practicum

students. Lastly, the EVSU administration and faculty supported the idea that said facility

will provide income to the establishment.

TABLE V

SOCIO ECONOMIC ACCEPTABILITY OF THE PROJECT

TO THE TEACHING AND NON-TEACHING PERSONNEL

Mean Interpretation
1. Do you agree that there is a need to construct a 4.39 Agree
three-storey commercial and dormitory building in
the EVSU main campus?
2. If you agree, are you amenable to use the Old 4.25 Agree
Supply Office lot as the site for the proposed three-
storey commercial and dormitory building?
3. Do you agree that there is a need to provide 4.86 Strongly Agree
commercial facilities, dormitory facilities,
convention room facilities, hostel facilities,
executive suites and other related services in the
commercial and dormitory building?
4. Are you amenable to locate the commercial 4.21 Agree
facilities on the ground floor of the said building?
5. Are you amenable to situate the dormitory 4.11 Agree
facility on the second and third floor of the said
building?
6. Are you amenable to place function room 4.07 Agree
 40

facilities, guest rooms and other related services at

the roof deck of the said building?
7. Do you agree that the construction of the 4.51 Strongly Agree
commercial and dormitory building will be
beneficial to the EVSU Community
(administrators, faculty, non-teaching personnel,
students and nearby residents0?
8. Do you agree that the proposed project will 4.46 Agree
provide income to EVSU?
9. Do you agree the project will provide possible 4.54 Strongly Agree
on-the-job training and employment opportunities
to the EVSU students?
Grand Mean 4.38 Agree

It is worthy to note that that the grand mean for the socio-economic acceptability

aspect in so far as the EVSU personnel are concerned is a high 4.38. Surprisingly, this is a

lot higher than the grand mean of 3.75 of the students, suggesting that they are more

convinced of the benefits and gains that the project will offer to the stakeholders than the

students.

The views of the private individual respondents on the socio-economic

acceptability of the proposed endeavor are shown in Table VI.

As manifested in Table VI, the private individual respondents agreed on the need

to construct a three-storey commercial and dormitory building at the old Supply Office.

They also approved of the plan to put the commercial space area at the ground floor and

the dormitory on the second and third floors. And like their student and EVSU personnel

counterparts, the private individual respondents endorsed the plan because it will be

beneficial to all of EVSU’s stakeholders aside from providing income to the learning

institution. Finally, they concurred that the venture will provide precious training to the

Hotel and Restaurant practicum students.

 41

TABLE VI

SOCIO ECONOMIC ACCEPTABILITY OF THE PROJECT

TO PRIVATE INDIVIDUALS

Mean Interpretation
1. Do you agree that there is a need to construct a 4.24 Agree
three-storey commercial and dormitory building in
the EVSU main campus?
2. If you agree, are you amenable to use the Old 3.94 Agree
Supply Office lot as the site for the proposed three-
storey commercial and dormitory building?
3. Do you agree that there is a need to provide 4.01 Agree
commercial facilities, dormitory facilities,
convention room facilities, hostel facilities,
executive suites and other related services in the
commercial and dormitory building?
4. Are you amenable to locate the commercial 3.95 Agree
facilities on the ground floor of the said building?
5. Are you amenable to situate the dormitory 3.89 Agree
facility on the second and third floor of the said
building?
6. Are you amenable to place function room 3.92 Agree
facilities, guest rooms and other related services at
the roof deck of the said building?
7. Do you agree that the construction of the 4.20 Agree
commercial and dormitory building will be
beneficial to the EVSU Community
(administrators, faculty, non-teaching personnel,
 42

students and nearby residents0?

8. Do you agree that the proposed project will 4.12 Agree
provide income to EVSU?
9. Do you agree the project will provide possible 4.23 Agree
on-the-job training and employment opportunities
to the EVSU students?
Grand Mean 4.06 Agree

The data in relation to the socio-economic acceptability of the project to all the

stakeholders is depicted in Table VII.

TABLE VII

SOCIO ECONOMIC ACCEPTABILITY OF THE PROJECT

TO ALL STAKEHOLDERS

Mean Interpretation
1. Do you agree that there is a need to construct a 4.01 Agree
three-storey commercial and dormitory building in
the EVSU main campus?
2. If you agree, are you amenable to use the Old 3.65 Agree
Supply Office lot as the site for the proposed three-
storey commercial and dormitory building?
3. Do you agree that there is a need to provide 3.91 Agree
commercial facilities, dormitory facilities,
convention room facilities, hostel facilities,
executive suites and other related services in the
commercial and dormitory building?
4. Are you amenable to locate the commercial 3.77 Agree
facilities on the ground floor of the said building?
5. Are you amenable to situate the dormitory 3.77 Agree
facility on the second and third floor of the said
building?
6. Are you amenable to place convention room 3.54 Agree
facilities, guest rooms and other related services at
the roof deck of the said building?
7. Do you agree that the construction of the 3.96 Agree
commercial and dormitory building will be
beneficial to the EVSU Community
(administrators, faculty, non-teaching personnel,
students and nearby residents0?
 43

8. Do you agree that the proposed project will 3.89 Agree

provide income to EVSU?
9. Do you agree the project will provide possible 4.00 Agree
on-the-job training and employment opportunities
to the EVSU students?
Grand Mean 3.83 Agree

The table shows that the stakeholders agreed to the proposal to construct a three-

storey commercial and dormitory building. The Table also suggests that the stakeholders

were amenable to the idea of choosing the site where the old Supply Office is situated as

the location of the proposed project. They saw a need to provide commercial facilities,

dormitory facilities, convention room facilities, hostel facilities, and other related services

in the commercial and dormitory building The table also indicates that they also approved

of the plan to put the commercial space area at the ground floor, the dormitory at the

second and third floors and function room facilities, guest rooms and related facilities at

roof deck of the said structure. All the stakeholders agreed that the proposed venture will

benefit them aside from generating income to the school. They supported the suggestion

that the project will offer invaluable training to the EVSU Hotel and Restaurant

Practicum students. In a capsule, the proposed plan to construct a three-storey

commercial and dormitory building at the EVSU Main Campus is socially acceptable to

all the stakeholders concerned.

 44

FINANCIAL STUDY

The discussion of the Financial Study takes account of the total project cost, the

assumptions made in the conduct of the Financial Study, the sources of financing, the five

year projection of financial statements, the test of profitability and the test of capital

investment of the commercial space and dormitory operation.

Total Project Cost

The total cost of the project will be based on a per square meter of floor area

basis. The floor area of the each floor level is 430.6 square meters. Since there are three

floors, the total floor area of the commercial and dormitory building is 1291.8 square

meters. The actual construction cost of the building is pegged at P 18,000.00 per square

meter while another P 2,000.00 per square meter cost is added to account for the study

tables, chairs, beds, electric fans, air condition units, wooden cabinets and other furniture

and non furniture fixtures and appurtenances that may be needed in the actual operation

of the facility. The total project cost, inclusive of equipment, furniture and the like,

therefore will be

1291.8 square meters X P 20,000.00 per square meter = P 25,836,000.00.

 45

Assumptions on Financial Study

The following are the assumptions made by the researchers in the conduct of the

Financial Study of the project:

1. The project plan is assumed to be strictly followed. The ground floor

will contain a 312.6 square meter commercial space and a 118 square

meter function room. The second and third floors will contain a total of

200 beds. There will be a cafeteria at the second floor. The building will

be constructed in January, 2011 and will be completed on January,

2012;

2. The commercial space rental is assumed to be P 300.00 per square

meter and will increase five (5) percent every other year:

3. The entire commercial space is presumed to be rented for the whole

year every year during the five year period of the study;

4. The dormitory bed space monthly rental for EVSU students is assumed

to be P1000.00 and will increase five (5) percent every other year;

5. The dormitory bed space monthly rental for non EVSU students is

assumed to be P1200.00 and will increase five (5) percent every other

year;

6. The dormitory bed space monthly rental for private and government

employees is assumed to be P1500.00 and will increase five (5) percent

every other year;

 46

7. The transients will pay P100.00 per day of stay in the dormitory during

the first year of operation, P125.00 per day during the third year of

operation and P150.00 per day during the fifth year of operation;

8. The dormitory will be one hundred percent occupied only for ten

months, from the month of June to March, every year;

9. The dormitory is assumed to be ten percent occupied during the months

of April and May;

10. To simplify the computation for the dormitory income, it is assumed

that all the dormitory residents are EVSU students;

11. The rental for the 118 square meter function room is presumed to be

P1000.00 per day during the five year period;

12. The function room is presumed to be rented out only for three months

for the entire duration of the year every year;

13. The cafeteria rental at the second floor that will serve the dormitory

residents is assumed to be 10,000.00 amount;

14. The salaries of all the employees, regular and contractual, is assumed to

increase by five (5) percent every other year;

15. The commercial space and dormitory supervisor is assumed to be a new

hire. He/she is assumed to have a monthly salary of P 12,000.00;

16. The two front desk clerks are assumed to have a monthly salary of P

8,000.00 each;
 47

17. The commercial space and dormitory supervisor and the two front desk

clerks is assumed to enjoy the fringe benefits and additional

compensations of the non teaching employees of the University;

18. The three contractual security guards is assumed to have a daily wage

of P 200.00 each;

19. The two contractual utility workers is presumed to have a daily wage of

P 150.00 each;

20. The electric and water expense at the commercial space is assumed to

be shouldered by the Lessor;

21. The electric and water expense for the dormitory, function room and the

cafeteria is assumed to be P25, 000.00 a month. It is assumed to

increase by five (5) percent every other year;

22. The telephone expense is assumed to be P 900.00 a month. It is

assumed to increase by five (5) percent every other year;

23. The cable network expense is assumed to be P 350.00 a month. It is

assumed to increase by five (5) percent every other year;

24. Office supplies is assumed to be P 1000.00 per month and is assumed to

increase by five (5) percent every other year;

25. Diesel, oil and other expenses related to the operation and maintenance

of the standby generator is assumed to be P 1000.00 per month;

26. It is assumed that there will be no repair on the building and its

facilities during its first two years of operation. The repair expense on
 48

the building and its facilities is presumed to be P 50,000.00 a year and

will increase by five percent every other year;

27. The economic life of the building is assumed to be fifty years. It is

assumed at after 50 years, the building will have a ten percent scrap

book value;

28. The economic life of the furniture, fixtures and equipments is assumed

at 15 years with a zero book value after the said period; and

29. Depreciation expense is based on a straight line method of depreciation.

30. Interest expense assumed to be twelve (12) percent per annum or one

(1) percent a month.

Sources of Financing

The building will be built either thru a bank loan scheme, a Build-Operate-

Transfer scheme or thru the income derived from the university. For purposes of

convenience, the financial statement for a bank loan scheme will be the only one

presented in the study.

Financial Statements

The five year projection of the income statement and cash flow are presented in

Tables VIII and IX, respectively.

TABLE VIII
EVSU COMMERCIAL AND DORMITORY BUILDING
PROJECTED INCOME STATEMENT

Year Year Year Year Year

2012 2013 2014 2015 2016
Revenue
Dormitory Revenue 2,040,000 2,040,000 2,142,000 2,142,000 2,249,000
Commercial Space Rent 1,125,360 1,125,360 1,181,628 1,181,628 1,240,710
Canteen Rental 120,000 120,000 120,000 120,000 120,000
Function Room Rental 90,000 90,000 90,000 90,000 90,000
 49

Total 3,375,360 3,375,360 3,533,628 3,533,628 3,699,710

Revenue
Operational Expense
Light and Water 275,000 275,000 288,750 288,750 303,188
Telephone 10,800 10,800 11,340 11,340 11,907
Cable Utilities 4,200 4,200 4,410 4,410 4,631
Office Supplies 12,000 12,000 12,600 12,600 13,320
Repairs 0 0 50,000 50,000 52,500
Diesel, oil, etc (Gen Set) 10,000 10,000 10,000 10,000 10,000
Total Operational 303,000 303,000 368,100 368,100 386,546
Expense
Administrative Expense
Salaries and Wages 660,000 660,000 693,000 693,000 727,650
Telephone 900 900 945 945 993
Depreciation (Building) 418,544 418,544 418,544 418,544 418,544
Depreciation (Equip and 72,240 72,240 72,240 72,240 72,240
furniture)
Total Administrative 1,151,684 1,151,684 1,184,729 1,184,729 1,219,427
Expense
NET INCOME 1,920,676 1,920,676 1,980,799 1,980,799 2,093,737
BEFORE INTEREST
Interest Expense 258,350 258,350 258,350 258,350 258,350
NET INCOME 1,662,326 1,662,326 1,722,449 1,722,449 1,835,387
AFTER INTEREST
TABLE IX
EVSU COMMERCIAL AND DORMITORY BUILDING
PROJECTED CASH FLOW

Pre- Year Year Year Year Year

Operating 2012 2013 2014 2015 2016
Cash
Inflow
Equity 25,836,000 0 0 0 0 0

Income from 0 2,040,000 2,040,000 2,142,000 2,142,000 2,249,000

Dormitory
Income from 0 1,125,360 1,125,360 1,181,628 1,181,628 1,240,710
Com Space
Canteen rental 0 120,000 120,000 120,000 120,000 120,000
Revenue
Function 0 90,000 90,000 90,000 90,000 90,000
Room Revenue
Total Cash 25,836,000 3,375,360 3,375,360 3,533,628 3,533,628 3,699,710
Inflow
Cash
Outflow
Construction of 23,252,400 0 0 0 0 0
Building
Purchase of 2,580,600 0 0 0 0 0
equip etc..
Salaries and 0 660,000 660,000 693,000 693,000 727,650
Wages
Telephone 2,000 0 0 0 0 0
 50

Installation
Telephone 0 10,800 10,800 11,340 11,340 11,907
Utilities
Office 0 12,000 12,000 12,600 12,600 13,320
Supplies
Light and Water 0 275,000 275,000 288,750 288,750 303,188
Cable 1,000 0 0 0 0 0
Installation
Cable 0 4,200 4,200 4,410 4,410 4,631
Utilities
Repairs 0 0 0 50,000 50,000 52,500
Diesel, oil, etc. 0 10,000 10,000 10,000 10,000 10,000
Interest 0 258,350 258,350 258,350 258,350 258,350
Payments
Total Cash 25,836,000 1,221,350 1,221,350 1,319,450 1,319,450 1,372,546
Outflow
Net Cash 0 2,154,010 2,154,010 2,214,178 2,214,178 2,327,164

A perusal of Table VIII will show that the net income before interest payments for

the first five years of operation of the project are P 1,920,676 for the first year, P

1,920,676 for the second year, P 1,980,799 for the third year, P 1,980,799 for the fourth

year, and P 2,093,737 for the fifth year. With a monthly interest payment of P 258,350,

the net incomes after interest payments are made for the first five years of operation are P

1,662,326 for the first two years, P 1,722,449 for the third and fourth years and P

1,835,387 for the fifth year. The proposed project is expected to earn a net income of at

least1.6 million pesos a year, inclusive of depreciation and interest payment expenses, for

the first five years. It is not farfetched, therefore, to call the endeavor as “the mother of all

income generating projects” of the institute.

With regards to the cash flow of the project, Table IX illustrates that the project

will have a net cash of P 2,154,010 for the first year, P 2,154,010 for the second year, P

2,214,178 for the third year, P 2,214,178 for the fourth year and P 2,327,164 for the fifth
 51

year. Needless to say, this net cash flow will have a profound positive effect on the cash

flow position of the university.

Test of Profitability

Net Profit Margin

A five year projection of the net profit margin is illustrated in Table X.

TABLE X

FIVE YEAR PROJECTION OF NET PROFIT MARGIN

Year Year Year Year Year

2012 2013 2014 2015 2016
Net Income 1,662,326 1,662,326 1,722,449 1,722,449 1,835,387
After
Interest
Revenue 3,375,360 3,375,360 3,533,628 3,533,628 3,699,710
Net Profit 49.2% 49.2% 48.7% 48.7% 49.6%
Margin

As gleamed from Table X, the net profit margins for the five year duration hover

between forty eight to forty nine percent. This high net income to revenue ratio is

indicative of the profitability and viability of the undertaking.

Return on Investment

Table XI demonstrates the projection of the return on investment (ROI) of the

commercial space and dormitory project’s first five year period.

TABLE XI
 52

FIVE YEAR PROJECTION OF RETURN ON INVESTMENT

Year Year Year Year Year

2012 2013 2014 2015 2016
Net Income 1,662,326 1,662,326 1,722,449 1,722,449 1,835,387
After
Interest
Equity 25,836,000 27,498,326 29,220,775 30,943,224 32,778,611
ROI 6.4% 6.0% 5.9% 5.6% 5.6%

As manifested in Table XI, the return on investment of the project will be 6.4

percent for the first year, 6.0 percent for the second year, 5.9 percent for the third year,

5.6 percent for the fourth year and 5.6 percent for the fifth year. Generally, the results

depict that there is a substantial return on investment of the project’s first five years of

operation.

Test of Capital Investment

Payback Period

Table XII presents the total net income after interest amount from year 2012 to

year 2024

TABLE XII

TOTAL NET INCOME AFTER INTEREST

FROM 2012 TO 2024

Year Net Income After Interest

2012 1,662,326
2013 1,662,326
2014 1,722,449
2015 1,722,449
2016 1,835,387
2017 1,835,387
 53

2018 2,012,164
2019 2,012,164
2020 2,136,279
2021 2,136,279
2022 2,345,643
2023 2,345,643
2024 2,483,334
TOTAL 25,991,830

The table shows that the payback period for the proposed Commercial and

Dormitory three storey building is thirteen (13) years. Considering that the project’s

economic life is fifty years, the project is an acceptable and feasible investment.
 54

BIBLIOGRAPHY

Anano, Maria Laarni P. et al. “A Proposed LIT Executive and Common’s House.”
Unpublished Undergraduate Thesis. Leyte Institute of Technology, March, 2001.

Nical, Kenneth E. “A Proposed Student Dormitory for the Leyte Institute of Technology:
An Income Generating Project.” Unpublished Master’s Thesis. Leyte Institute of
Technology, March, 2003.
 55

APPENDIX A

TABLE XIII
EVSU COMMERCIAL AND DORMITORY BUILDING
PROJECTED INCOME STATEMENT (2017-2021)

Year Year Year Year Year

2017 2018 2019 2020 2021
Revenue
Dormitory Revenue 2,249,000 2,361,450 2,361,450 2,479,522 2,479,522
Commercial Space Rent 1,240,710 1,302,744 1,302,744 1,367,880 683,940
Canteen Rental 120,000 144,000 144,000 144,000 144,000
Function Room Rental 90,000 135,000 135,000 135,000 135,000
Total 3,699,710 3,943,194 3,943,194 4,126,402 4,126,402
Revenue
Operational Expense
Light and Water 303,188 318,347 318,347 334,264 334,264
Telephone 11,907 12502 12502 13127 13127
Cable Utilities 4,631 4862 4862 5105 5105
Office Supplies 13,320 13,986 13,986 14,685 14,685
Repairs 52,500 55,125 55,125 57,881 57,881
Diesel, oil, etc (Gen Set) 10,000 12,000 12,000 12600 12600
Total Operational 386,546 416,822 416,822 437,662 437,662
Expense
Administrative Expense
Salaries and Wages 727,650 764,032 764,032 802,233
Telephone 993 1,042 1,042 1094
Depreciation (Building) 418,544 418,544 418,544 418,544 418,544
Depreciation (Equip and 72,240 72,240 72,240 72,240 72,240
furniture)
Total Administrative 1,219,427 1,255,858 1,255,858 1,294,111 1,294,111
Expense
NET INCOME 2,093,737 2,270,514 2,270,514 2,394,629 2,394,629
BEFORE INTEREST
Interest Expense 258,350 258,350 258,350 258,350 258,350
NET INCOME 1,835,387 2,012,164 2,012,164 2,136,279 2,136,279
AFTER INTEREST
 56

APPENDIX B

TABLE XIV
EVSU COMMERCIAL AND DORMITORY BUILDING
PROJECTED INCOME STATEMENT (2022-2026)

Year Year Year Year Year

2022 2023 2024 2025 2026
Revenue
Dormitory Revenue 2,603,498 2,603,498 2,733,673 2,733,673 2,870,356
Commercial Space Rent 1,436,274 1,436,274 1,508,088 1,508,088 1,583,492
Canteen Rental 180,000 180,000 180,000 180,000 190,000
Function Room Rental 180,000 180,000 180,000 180,000 270,000
Total 4,399,772 4,399,772 4,601,761 4,601,761 4,913,848
Revenue
Operational Expense
Light and Water 350,977 350,977 368,525 368,525 386,951
Telephone 13,783 13,783 14,472 14,472 15,195
Cable Utilities 5,360 5,360 5,628 5,628 5,909
Office Supplies 15,608 15,608 16,388 16,388 17,207
Repairs 60,775 60,775 63,814 63,814 67,005
Diesel, oil, etc (Gen Set) 15,000 15,000 15,000 15,000 18,000
Total Operational 461,503 461,503 483,827 483,827 510,267
Expense
Administrative Expense
Salaries and Wages 842,344 842,344 884,461 884,461 928,684
Telephone 1,148 1,148 1,205 1,205 1,265
Depreciation (Building) 418,544 418,544 418,544 418,544 418,544
Depreciation (Equip and 72,240 72,240 72,240 72,240 72,240
furniture)
Total Administrative 1,334,276 1,334,276 1,376,450 1,376,450 1,420,733
Expense
NET INCOME 2,603,993 2,603,993 2,741,484 2,741,484 2,982,848
BEFORE INTEREST
Interest Expense 258,350 258,350 258,350 258,350 258,350
NET INCOME 2,345,643 2,345,643 2,483,134 2,483,134 2,724,498
AFTER INTEREST
57