The number, which is more than half of the total government count of poor Filipinos in 2012, could double if government lends a hand in promoting social enterprise, said Marie Lisa Dacanay, president of the Institute for Social Entrepreneurship in Asia.
The study, called “Poverty Reduction and Women Economic Leadership: Roles, Potentials and Challenges of Social Enterprises in Developing Countries in Asia,” covered Bangladesh, Indonesia, and the Philippines and was presented at the 1st Social Enterprise Advocacy and Leveraging Conference in Asia on November 25 to 27.
“Social enterprise should be a complimentary poverty-reduction strategy of the government,” Dacanay told Rappler on Thursday, November 27.
Social enterprises are businesses of traditional capitalism models but with solutions that seek to address long-term goals such as poverty.
In the Philippines, social enterprises can be classified as cooperatives, microfinance institutions, (MFIs), fair trade organizations, trading development organizations, and new-generation enterprises.
MFIs alone made the highest impact in reaching poor Filipinos, according to the study, with more than 90% of contribution among other social enterprises.
As of December 2013, the study cited that MFIs had 23,672 cooperatives, with a total combined assets at P266.80 million ($5.94 million*). Cooperative members were at least 12.6 million, although not all of the members can be considered “of the poor” and “serving the poor.”
Out of the 12.6 million members, about 2.5 million Filipinos are clients of non-governmental organization-linked MFIs.
“Microfinance therefore plays a significant role in providing business,” the study said.
The Philippines does not have an official count of social enterprises though, but researchers estimate at least 30,000 institutions have been providing programs and services in the country.
Government support not enough
Government statistics said there were 4.2 million of poor Filipinos in 2012, an increase from 3.8 million 2006.
The Asian Development Bank explained such was caused by a dearth of poverty reduction measures and insufficient job generation.
To address this pressing concern, the country needs to enhance its public-private partnerships (PPP), develop capital markets, and boost access to finance, said ADB Philippines country director Richard Bolt.
At present, government’s role in social enterprises is manifested through the Department and Trade and Industry, People’s Credit and Finance Corporation, Land Bank of the Philippines, and the Development Bank of the Philippines.
Other state-sponsored microfinancing programs also include the Livelihood Credit Assistance Program and the SME (small and medium enterprise) Unified Lending Opportunities for National Growth program.
But government efforts to support social entrepreneurship are not enough, Dacanay said.
At Thursday’s social enterprise conference here, stakeholders from different Asian countries urged lawmakers to pass bills supporting the industry which are pending in the Senate and Congress.
Two versions of the “Poverty Reduction through Social Entrepreneurship” bill aims to provide a backbone for institutions that are engaged with such business practice.
The bills are inspired by South Korea’s Social Enterprise Promotion Act which was put to law in 2007. (READ: Developing social enterprise: Lessons from Korea)
Current government regulations, such as taxing small cooperatives while giving tax holidays to big-ticket investments, do not jive well with the country’s bid to take the poor out from their predicament, Dacanay said.