poverty reduction

Senate Bill No. 349: Inclusive Business Promotion Act

In the recently concluded Asia-Pacific Economic Cooperation or APEC Summit held in the Manila, we had the first ever high-level discussion on Inclusive Business, which promoted the idea of companies taking part in development, not just through philanthropy but also through their products and supply chains.

Under this inclusive business umbrella are social enterprises as well as large corporations that utilize their products, services, or even their supply chains to help poor communities create a sustainable industry and become financially successful.

This concept of business taking part in nation-building and social development is finally catching on and all over the world, allies in the fight against poverty have found an effective weapon – conscientious entrepreneurship – to beat poverty and create prosperity.

There is no better time than now to establish policies in support of this movement.

“Inclusive Business (IB),” as defined in this measure, refers to “a business approach that provides decent work and economic opportunities or relevant and affordable goods or services for poor and low income and/or marginalized sectors of society by making them part of the organization’s core operations as producers, consumers, workers, owners or business partners, directly contributing to improved living standards, poverty reduction and systemic inclusion in a manner that is sustainable, in scale or scalable, and replicable.”

The Inclusive Business Bill provides for the establishment of a national strategy for the promotion of Inclusive Businesses to be implemented by a new office, the Inclusive Business Center. The bill also provides policies for IB accreditation, and providing support and incentives for IBs and their community partners, including social enterprises.

A key strategy for providing sustainable livelihood and reducing poverty, especially in the countryside, is by integrating poor communities as suppliers of goods and/or services in the value chain of large businesses.

Inclusive Business companies can serve to link poor communities to more viable markets, enhancing economic opportunities and sources of income, and enabling them level up from subsistence livelihood.

Let us enjoin the private sector to take part in the creating shared prosperity in our nation.

In view of the foregoing, that passage of this bill is earnestly sought.  

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PH social enterprise covers 2.5M poor Filipinos – study

MANILA, Philippines – Social enterprises in the Philippines have covered at least 2.5 million people living below the poverty line, according to a study commissioned by Oxfam.

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.

Source: Rappler.com

Social enterprises: Vehicles for poverty reduction and inclusive growth

One out of four Filipinos continue to live below the poverty line. The Philippines will not be able to achieve by 2015 its commitment to cut in half those who are living on USD1.25/day or the threshold of absolute poverty.

Such bleak picture from the Philippine government’s own assessment of the country’s development performance is in sharp contrast to the glowing figures of economic growth over the past 6 years. If we add the glowing figures about the increase in assets of the richest Filipinos, one could easily make the conclusion that our country’s economic growth has not been inclusive.

The Philippines is not the only country that is not going to reach its development target of cutting in half their population living below the poverty line. But despite this, the UN High Level Panel of Eminent Persons that was commissioned to study and recommend the world’s post-2015 development goals has made a call for new global partnerships to transform economies, eliminate poverty and achieve gender equality by 2030.

It is in this context that social entrepreneurship is being proposed and explored as a strategy by the First Social Enterprise Advocacy and Leveraging Conference in Asia (SEAL-Asia).

Social entrepreneurship is all about innovative and sustainable solutions to social problems. And in the context of poverty and inequality, social enterprises with the poor as primary stakeholders or SEPPS have emerged as innovative responses to these problems.

These social enterprises engage the poor not only as workers, suppliers and clients but also as partners in their development. At their best and over time, the poor are enabled to become pro-active stakeholders in value chains and economic subsectors; co-owners, managers and decision makers of their own social enterprises; as well as empowered citizens in their communities and society at large.

SEPPS in the Philippines include social mission-driven microfinance institutions like the Center for Agriculture and Rural Development Mutually Reinforcing Institutions (CARD MRI); social cooperatives and their federations like the Omaganhan Farmers Agrarian Reform Cooperative and the National Federation of Cooperatives of Persons with Disability; fair trade organizations serving small farmers like Bote Central and Alter Trade Foundation Inc; trading development organizations serving marginalized producers like Pilipinas Ecofiber Corporation and Rural Reconstruction Trade; and new generation social enterprises like Human Nature and Hapinoy.

External challenges

A survey involving a sample of 32 SEPPS in the Philippines, conducted as part of a multi-country study by ISEA and Oxfam to be shared during SEAL-Asia, shows great potential for this sector to play a key role in addressing poverty and inequality in the next decade. The combined reach of these 32 SEPPS alone reached 2.5 million poor. If we assume that each poor family reached had 2 members, this figure represents about 30% of the estimated number of poor families in 2012.

The same study cited the many external challenges faced by SEPPS: extreme weather disturbances; government policies negatively affecting social enterprises; inaccessible or inappropriate government programs; corruption in government regulatory bodies; changing market environments and trade liberalization; inadequacy of programs supporting social enterprise development; and industry and market practices negatively affecting social enterprises.

These challenges are the main drivers why SEPPS and their support institutions in the Philippines have come together to set up two major platforms. One is the Reconstruction Initiative through Social Enterprise (RISE) to make social entrepreneurship a major strategy for building back better in Yolanda affected provinces. The other is the Poverty Reduction through Social Entrepreneurship (PRESENT) Coalition, which is pushing for the enactment of a PRESENT law.

An important recommendation emanating from the Oxfam-ISEA study is informative: “…government and business institutions need to be willing to change the policies and practices that have not worked in favor of the poor, and undertake strategic innovations to support the scaling up of SEPPS.”

A strategic innovation toward this direction is the passage and implementation of the PRESENT bill being championed by Sen. Bam Aquino and Congressmen Teddy Baguilat/Cresente Paez in both houses of Congress.

Source:  Rappler.com

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