Kuala Lumpur, Malaysia—Despite the robust growth of the Philippines—averaging 6 percent over the last five years—poverty and inequality in Southeast Asia’s rising tiger still persist. This is referred to among policy planners as a “development paradox” that Asean business leaders want to address through the promotion of social enterprise.
More and more Filipinos suffer at the bottom of the economic pyramid—with poverty incidence among individuals in the Philippines rising to 25.8 percent, from 24.6 percent during the first half of the year, data from the National Economic and Development Authority showed.
This means one out of four Filipinos is still poor, despite the relatively rapid economic expansion the country enjoyed over the last five years.
“The Philippines is a country where you would see a development paradox. Our economy is growing robustly, but inequality and poverty continue to rise,” Marie Lisa M. Dacanay, founding president at the Institute for Social Entrepreneurship in Asia, said in a social entrepreneurship forum here on Saturday.
Given the recent poverty-related figures, the Philippines is fated to miss its target under the Millennium Development Goal of halving poverty incidence by 2015. With the strategy of eradicating poverty focused more on curbing corruption, promoting foreign direct investments (FDI) and the cosmetic impact of the Conditional-Cash Transfer (CCT) Program, the $285-billion economy stands a good chance of missing a second time its goal of eradicating poverty a decade-and-a-half from now. “The Sustainable Development Goals [SDGs] of the United Nations talks about poverty eradication, not just reduction; and without social enterprises, I believe the government will not be able to solve the problem of poverty,” she said. Manila is a signatory to the SDGs set by the UN.
“The strategy of development is flawed. If you listen to President Aquino’s announcements, his focus is on FDI, CCT, and anti corruption. It’s all great; but to solve poverty, you need to create wealth, and distribute it to the poor. The only way to do it is not to depend on corporations that only want to make profits, but to work with social enterprises that are willing to create wealth and distribute the wealth to the poor,” Dacanay said.
The concept of social entrepreneurship revolves around the idea of solving social problems by making money from selling goods and services in an open market. In return, the profit is reinvested in the community.
AirAsia bigwig Tony Fernandes described such entities as enterprises that promote sustainable development through businesses that emphasize the idea of helping build back communities. These businesses do not simply have a corporate social responsibility arm but have social duty as its core.
“Doing good is not just about writing a check but about people. It’s about using your assets to help communities around the world,” he said.
The chief executive of Thai conglomerate Premier Group of Companies, Vichien Phongsathorn, agreed, saying that solving the problem of poverty and inequality is not just a single individual’s obligation but is a group effort.
“When we talk about solving social issues, normally, we look at governments to do the job. We also look at the social factor or the non-governmental organizations to do the job. We all know that it’s not enough,” he said.
Indonesian conglomerate Sintesa Group top brass Shinta Kamdani echoed this sentiment, and urged fellow business executives to exert more effort in promoting social progress through entrepreneurship.
“We can’t wait for government to lead us. We have to make an effort,” she said. In the Asean, there are thousands of small and medium businesses that are considered social enterprises. In Manila there are about 15,000 of them championing the cause of inclusive growth.
Lost hope on Aquino admin
These enterprises are seen as the catalyst to eradicating poverty. But in the Philippines, these enterprises find it difficult to flourish without the help of a legislation that promotes such businesses. Lawmakers have received the proposal for such a piece of legislation enacted into law. However, years have passed since the private sector first advanced the proposal, and still it remains on square one.
“The bill is called poverty reduction through social entrepreneurship, which circles around the idea of allowing social enterprises to be major partners of business and government to solve the problems of poverty in the country. It is still pending in Congress,” Dacanay lamented.
She described the bill as having a “very strong distributive character.”
“We are hoping government will play a developmental role by supporting social enterprises. It includes procurement sections — aimed at giving social enterprises special rights to actually get the first option, if they have the products and the quality,” the professor explained. Under the bill, the state shall, likewise, provide technical and financial assistance, incentives and other services to enable social enterprises to develop into viable and vital antipoverty agents, and a strong social entrepreneurship movement that will be instrumental in reducing poverty in the country.
Dacanay seemed to have lost all hope to the present set of lawmakers, saying that her group will lobby for the proposal at the next batch of solons next year.
“We were hoping that it can become a priority bill in this administration, but it didn’t. So we’re hoping that in the next administration, it can be a priority bill,” she said. “I think it’s imperative for government to act. Legislative action is just one way, but we can also do executive action. So maybe we could explore that, and work with departments of government that may be open to bringing in social entrepreneurship in their programs.”