Marie Lisa Dacanay President, Institute for Social Entrepreneurship in Asia PRESENT Multisectoral Forum Series Launch; June 29, 2012 Institute for Social Entrepreneurship in Asia

 PRESENT as A spiration  The PRESENT B ill  The PRESENT C oalition  C onvergence for PRESENT ABC of P overty Re duction through S ocial Ent repreneurship

PRESENT as ASPIRATION

“Social entrepreneurship entails innovations designed to explicitly improve societal well-being, housed within entrepreneurial organizations, which initiate, guide or contribute to change in society” (Perrini, 2006)

US: ◦ economic downturn in 70s and 80s  huge cutbacks of federal funding to NGOs Europe: ◦ crisis of welfare states in 80s  retreat from public services + phenomenon of structural unemployment  WISE Countries in the South/Philippines: ◦ continuing crisis of development in 90s: massive poverty and inequality  SE-PPS: Social Enterprises with the Poor as Primary Stakeholders Social Entrepreneurship: GLOBAL PHENOMENON: RESPONSE TO CRISIS

Social Enterprise with the Poor as Primary Stakeholders (SE-PPS): social mission- driven wealth creating organizations Private enterpriseSocial enterprise Stockholders/ proprietors: owners of capital Primary stakeholders/ beneficiaries Poor /Marginalized sectors: engaged as suppliers, workers, clients and/or owners; partners in poverty reduction Single bottom line: profit Primary objectives Double or triple bottom line: poverty reduction, (social), environmental; financial sustainability as supportive objective Accumulative: enrich individual owners of capital oftentimes with negative social and environmental costs Enterprise philosophy Distributive: positive benefits accrue to society specially among broad segments of poor

Sustainable agriculture & fair trade Annual Revenue: PhP202.8 M Age: 21 years 820 sugar farmers in Negros 3,493 banana growers nationwide

School chair production + Age: 15 yrs Annual Revenue: PhP48 M 1,250 Persons with Disability (PWD) 15 primary coops nationwide

Financial & social protection services Age: 17 yrs Annual Revenue: PhP101.4 M 35,040 mostly entrepreneurial poor in the Visayas Farmers, construction/ domestic/migrant workers in Lamac

AS INNOVATIVE CHANGE AGENTS  provide the poor a combination of transactional and transformational services: ‘ Poverty as deprivation of basic capabilities ’ ( Sen,1999; 2009) not just low income  positively contribute to creation of economic and social value: much of value created not recognized by mainstream market economy  use combination of principles as actors in economic development: market, redistribution reciprocity, solidarity, sustainability Social Enterprises with the Poor as Primary Stakeholders (SE-PPS)

 Single social enterprise interventions  limited in terms of impact and sustainability  Importance of interventions at the level of economic subsectors  network of related actors and enterprises performing various functions in competing value chains; may be identified by major raw material source, finished product or final service provided PRESENT: Developing SE-PPS as Partners of Poor in Strategic Economic Subsectors

 Strategic Economic Subsectors ◦ have a potential for growth ◦ large numbers of the poor are players or could become players  Examples of strategic economic subsectors where SE-PPS are already playing key roles: coco coir, muscovado sugar, organic rice, essential oils, bamboo, educational toys, school chairs, brewed coffee PRESENT: Developing SE-PPS as Partners of Poor in Strategic Economic Subsectors

 Engaged in the extraction of fiber & peat from coconut husks, and the processing of fiber into high quality stitched & woven coir products for sale in the Philippines and abroad.  Organized to link input providers, small producers & processors, with traders & distributors of various coir products, and to coordinate the activities of the former in order to meet the requirements of final users. Coconut husks Coco fiber & cocopeat Coir ropes & mats Geonets, plant liners, trays, etc. Final sale Traders direct buyers Husk collectors Rural workers Rural coops Plant workers Twining agents Weavers & Edgers Associat’ns Plant workers Pilipinas Ecofiber: Social Enterprise Value Chain Intervention in Coco Coir Subsector

◦ Aspiration of SE-PPS to scale up impact through innovative partnerships with government Poverty Reduction through Social Entrepreneurship (PRESENT)

THE PRESENT B ILL Partnership with Congress to institutionalize Poverty Reduction Through Social Entrepreneurship

 Objective : ◦ Provide a nurturing environment for the development and growth of social enterprises as major vehicles for poverty reduction  Enacts: ◦ planning and implementation of a National Poverty Reduction Through Social Entrepreneurship (PRESENT) Program ◦ led by a Commission on Social Enterprises under the Office of the President PRESENT Bill: Main Features

 National PRESENT Program : ◦ Development of strategic economic subsectors with potentials for growth and where the poor are concentrated or could be major players ◦ Benefits to the poor: increased incomes and capability to improve their means of living   as workers, suppliers, clients and/or owners of SEs in strategic economic subsectors   as partners in economic and social development ◦ Overall Outcome : substantive poverty reduction PRESENT Bill: Main Features

 Provision of accessible non-collateralized loans thru special credit windows with a Guarantee Fund Pool  Comprehensive insurance system to reduce vulnerability to climate change/calamities  Resources for comprehensive capacity development for SEs and poor as partners PRESENT Bill: Support Programs for SE-PPS

 Mainstream SE content in formal educational system  Proactive SE market development program promoting principles of fair trade  R&D on strategic economic subsectors ; appropriate technologies ; and innovations to democratize access of poor to quality basic social services  Recognition and support for LGUs in developing social enterprises PRESENT Bill: Support Programs for SE-PPS

 Preferential treatment in government procurement including coverage of performance bonds  Tax exemptions and tax breaks for SE-PPS and social investors  Cash incentives (i.e. at least 25% of minimum wage for social enterprises employing PWDs) PRESENT Bill: Incentives for SE-PPS

◦ PRESENT Bill as a codification of agenda for change to assist poor overcome poverty resulting from state and market failures thru their effective participation in SE-PPS ◦ PRESENT Bill as codification of incentives and support for SE-PPS as major partners of government in poverty reduction PRESENT Bill Initiative: Strategic Rationale

THE PRESENT C OALITION Microcosm, Voice and Action Network of Emerging SE Sector

 Co-Convenors: FSSI & Ateneo Sch of Gov’t  Members of Steering Committee include ◦ PhilSEN ◦ WFTO-Asia/Philippines ◦ INAFI-Philippines ◦ Eagle’s Wings Dev’t Foundation ◦ Bote Central/ Philippine Coffee Alliance ◦ Pilipinas Ecofiber Corporation ◦ Hapinoy/MVI ◦ Foundation for TheseAbled ◦ PRRM ◦ ISEA PRESENT Coalition: main actors

 Basis of Unity: o Push for the enactment and implementation of the PRESENT Bill o Undertake a nationwide education campaign on SE as vehicles for poverty reduction o Develop standards and benchmarks for self- regulation and development of sector PRESENT Coalition: initiative to unite what was once a fragmented sector

 Informed estimate of Philippine SE sector : +/- 30,000  Various Actors: ◦ Fair Trade Organizations (crafts, agri-business, processed food) ◦ CSO-initiated SEs serving various segments of the poor (agri-based processing; trading and marketing in upland, lowland, coastal communities; important players in sustainable agriculture and forestry- related enterprises) ◦ Cooperatives (agriculture/agri-business; savings and credit; social services) ◦ Faith-based organizations espousing a solidarity economy ◦ Social welfare-oriented enterprises serving disadvantaged groups (PWDs, women and children) ◦ Micro Finance Institutions ◦ SEs initiated by young professionals (fashion, processed food, services to micro-enterprises) ◦ SMEs with double or triple bottom line ◦ Management and consulting services for SEs/micro-enterprises ◦ SE Service, Resource and Advocacy Institutions/Networks PRESENT Coalition: Microcosm, Voice and Action Network of Emerging SE Sector

Convergence for PRESENT Possible Action Points with National Government Agencies (NGAs)

 Undertake a comprehensive study to define the most strategic economic subsectors to undertake PRESENT programs. (NEDA)  Undertake a national profiling of the social enterprise sector to better ground government-social enterprise convergence initiatives. (NAPC) Possible Action Points with NGAs: Invest in strategic PRESENT research

 Explore the reconfiguration of existing resources or develop new programs with ODA donors to ◦ Undertake initiatives to address bottlenecks negatively affecting social enterprise growth ◦ Evolve structures and systems that would inform the IRR (Implementing Rules and Regulations) of the PRESENT Bill Possible Action Points with NGAs: Begin the paradigm shift towards PRESENT

 Develop social enterprise-government convergence initiatives ◦ As part of the socio-economic component of government’s thrust in 609 poorest municipalities identified by NAPC ◦ As a key component of priority industries for national convergence identified by DTI ◦ To strengthen/ enhance the thrust of DA in organic/ sustainable agriculture  coco coir; organic rice; muscovado; coffee; school chairs; educational toys; bamboo Possible Action Points with NGAs: Evolve best practices in PRESENT

 Establish a planning, monitoring, evaluation body and system to evolve effective, transparent, corruption-free public procurement schemes and mechanisms involving SEPPS ◦ coco coir, organic fertilizer, community-based processing equipment for coffee, educational toys, school chairs  In cooperation with bank and non-bank-financial institutions, pilot risk-based lending with a Guarantee Fund Pool for SEPPS  Pilot the development of insurance schemes to address the vulnerability of SEPPS and the poor to natural disasters and climate change Possible Action Points with NGAs: Pursue PRESENT innovations

 Set up a pilot Social Enterprise Development Fund to support capability building of social enterprises  Evolve a market development program promoting the principles of fair trade in partnership with SEPPS  Pilot social enterprise-based social protection schemes and the efficient/ effective delivery of quality basic social services in preparation for a post-CCT scenario  Explore appropriate tax incentives for SEPPS Possible Action Points with NGAs: Pursue PRESENT innovations

STRONG, PROACTIVE & INNOVATIVE SE SECTOR with a SIGNIFICANT CITIZEN BASE + GOVERNMENT PLAYING DEVELOPMENTAL ROLE thru SUCCESSFUL CONVERGENCE EFFORTS + RELEVANT SUPPORT from SOCIAL INVESTORS  SE-PPS as MAJORITY OF VIBRANT SME SECTOR in the COUNTRY  SUBSTANTIVE POVERTY REDUCTION Concluding Remarks: PRESENT COALITION’s ASPIRATION