Attempts at

SOCIAL ENTERPRISE
 Attempts at
SOCIAL
ENTERPRISE
ISBN 978-621-95727-0-5

Published by:
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 Preface 4

THE BIG SHIFT

I. Creating Our Space 8
A. Why Social Enterprise? 10
B. Inclusive Growth through Strengthening of SE Competitiveness 12
C. Executing the Strategy 15
D. Measuring SE impact 21
E. SE Strategy: Taking Stock of the First 5 Years 23

II. Building the Ecosystem 26

TABLE
A. Lesson 1: Appropriate Financing 28
B. Lesson 2: Capacity and Structure 32
C. Lesson 3: Industry Networking 37
D. Lesson 4: Technology Efficiency 43

OF
E. Lesson 5: Market Competitiveness 46

III. Developing the Support Systems 52

A. Looking for the Right Talents 54

CONTENTS
B. Financing the Strategy 56
C. Embedding Risk Management 58

IV. Quick Facts & Figures, 2011-2015 60

V. The Next Cycle: Scaling-up!
62

REVISITING OUR FIRST SE COMMUNITIES

I. The 10 Social Enterprises, Their Projects 71
and the Outcomes
II. Conclusion and Recommendations 99
III. References 110
 Attempts at Social Enterprise

Preface

A
ttempts At Social Enterprise, a two-in-one Board of Trustees and executive officers as well as unfamiliar and often untested territories. And finally, Archbishop Ledesma. And the internal team of PEF
book of the Peace and Equity Foundation the proponents of these 10 projects. Addendums we needed to efficiently intertwine the various who prepared the case studies and provided the
(PEF), narrates the foundation’s strategic may have to be made in the future to accommodate networks of peoples and organizations as well as necessary materials for this publication.
shift toward building and scaling up social possible comments from pertinent parties. appropriately select needed goods and services
enterprises (SEs) a decade after its founding in from a complex gamut of options. For the impact study, I would like to thank our
2001. Since its founding, PEF has proven itself to be advisers for sharing their expertise in designing
a competent, dynamic, proactive and steadfast Social entrepreneurship synthesizes the business and conducting this kind of study: Dr. Emmanuel
The first part of the book, The Big Shift, recounts steward in managing its endowment fund for model’s primary motivation of profit and the de Dios, Dr. Jeff Ducanes, Dr. Butch Lanzona, Dr.
how and why PEF built a social enterprise poverty alleviation through SE development, basic social mission of civil society toward inclusive and Lorelei Mendoza, Dr. Mary Racelis and Mr. Danilo
ecosystem during the crucial five-year period from social services, and culturally inclusive and sensitive sustainable development. To this, we could add Songco.
2011 to 2015. Each stage and each component of development. another bottom line, and that is, environmental
social entrepreneurship was thoroughly described protection and conservation. The alleviation of I would also like to acknowledge the following
and scrutinized by PEF officers, advisers and Our former chair, Archbishop Antonio Ledesma, communities require economic development and people and organizations for their invaluable
partners. explains that this focus on SE enables PEF and its the resiliency against the vulnerabilities of poverty, support and cooperation in making this book
partners to uplift the bottom poor by engaging on one hand, and of disasters and climate change possible: Antique Development Foundation
The second part is the condensed version of An households, organizations and communities in impacts, on the other. Inc. (ADFI), Dancalan Ilog Waterworks and
Integrated Analysis of the Ten Social Enterprise long-lasting and sustainable economic activities. Agro Industrial Multi-purpose Cooperative
Midterm/Endline Impact Assessment Studies. Taking stock of the first five years of the decade, The impact study which was done by third party (DIWAGRIMPCO), INSOL Development Foundation
This study covers the nature and rationale of the we can conclude that SEs, through improved evaluators (PEF and its partners being the first (INSOL), Laua-an Multipurpose Cooperative
10 SE projects, how PEF support was utilized, production and marketing processes, and access to two parties) is a testimony of the foundation’s (LMPC), Magpet Agro-Industrial Resources
the interventions made, the project context, and public services, improve the lives of households and commitment to transparency, accountability and Cooperative (MAGIRCO), Multi-Sectoral Alliance
the envisaged transformation in households communities. good governance. As I stated during our 15th for Development-Negros (MUAD), Nagkakaisang
and communities. The comparative analyses of foundation anniversary, “PEF is a private initiative Tribu ng Palawan (NATRIPAL), Philippine Agrarian
the baseline and midterm conditions of SEs, the Our Executive Director Bob Calingo argues that for the public good. Despite being a private Reform Foundation for National Development
proponents, the households, and the community at altering the foundation’s development strategy organization, it must not be exempt from the (PARFUND), Southern Partners and Fair Trade
large quantitatively and qualitatively measure the is a game changer requiring the retooling of scrutiny of the public eye. The accountability and Center Inc. (SPFTC), and SUBASTA Integrated
impact of our efforts. our fundamentals, including program focus and transparency that we demand of our public officials Farmers Multi-Purpose Cooperative (SUBASTA).
priorities, design and implementation of support are principles that we ourselves must protect and
While the first part of the book was an undertaking packages, human resources, and measuring cherish—and more importantly, practice. PEF is May this book contribute to our continuing
mostly of people within the foundation, the second impacts. not a public office but our foundation is a matter of education as development players and social
part was conducted by external experts whose public trust.” entrepreneurs.
qualifications assured an objective assessment of First, we had to create our niche, since we were
PEF’s programs and projects. However, it must be relatively new in SE and SE itself is something This book would have not been possible without My gratitude to all.
noted that this condensed version is a preliminary new in the Philippines. Then we had to build the contributions of the authors. For Attempts at
draft based on the abovementioned study without an SE ecosystem conducive for the growth and Social Enterprise, I would like to acknowledge MR. BENJAMIN D. ABADIANO
the final validation and clarification of the PEF success of enterprises; SEs needed to take root in Joey Bermudez, Bob Calingo, Jing Karaos, and PEF Chair

4 5
The Big Shift
 Attempts at Social Enterprise

I. Creating Our Space

Introduction

S
ocial enterprise (SE) integrates profit, the PEF is strong in social development but weak on
main motivation of traditional business, social enterprise. This results to uncertainty as
with the social mission of sustainable social risks are given more focus than economic
and inclusive development and of the equitable ones. SEs work within the free market economy,
utilization of natural resources and the benefits and they must compete with mainstream
generated while minimizing ecological impacts. businesses to survive. In “SE-tizing” grants
platforms, PEF realized that not everything
Founded in 2001, the Peace and Equity is scalable and its investments must generate
Foundation (PEF) promotes SEs to uplift poor real and maximum impact in transforming
communities especially in the countryside; thus, lives. Furthermore, diversifying investments and
the eventual focus on C5: cacao, cane sugar, revenue generation outside the trust fund must be
coffee, coconut and climate smart agriculture. explored.

A decade later, it is still a relatively new SE PEF has conducted three baseline studies to
player. 2011 to 2015 was an opportunity to evaluate its programs and projects. These are
build on the social enterprise ecology through essential in planning the foundation’s future
capacity building, appropriate technology, directions. One challenge is to engender reliable
innovative marketing and customized financing. and measurable indicators for creating livelihood
opportunities and minimizing vulnerabilities of
The foundation altered its development strategies. the poor.
Closer scrutiny of the proposals and their
proponents; assessing the appropriateness Five years is not sufficient for a meaningful
of structures, policies and processes of SE learning curve. Skill levels and experience are
governance; addressing internal inadequacies; correlated, and the rise in one results to the
sound planning and proactive management— rise of the other. PEF has learned from both its
all these anticipate and minimize risks, build successes and failures. The groundwork has been
strategic partnerships, select and support laid for the next stage of scaling up SEs.
projects with clearer focus, and ensure that SEs
themselves and the PEF itself are sustainable.

9
 I. Creating Our Space Attempts at Social Enterprise

Why Social Enterprise?

Archbishop Antonio J. Ledesma, SJ DD
PEF Chair, 2008 to 2014 | From an interview, 08 February 2013

T
he decision of the Peace and Equity PEF also funded non-social enterprise projects,
Foundation (PEF) to shift toward a social such as shelter construction in Cagayan de Oro
enterprise strategy is primarily rooted in as part of the foundation’s mandate to help those
sustainability as a concept and as a practice. in emergency situations. Part of our resources
In our first 10 years, many of the PEF-funded should be set aside for emergency and relief, and
projects proved to be unsustainable. Social for advocating issues such as asset reform and
enterprise (SE) takes into consideration the community organizing. The main proportion of
elements of sustainability and viability in every PEF funds should be allocated to social enterprise
aspect and level of the enterprise but there should be a smaller but significant
amount set aside for these other concerns. We
The shift not only enables PEF and its partners to should strike a good balance in terms of our
uplift the bottom poor. It spurs people, households priorities.
and communities to engage in long-lasting
economic activities. Social enterprise is not strictly Social enterprise is one way to generate jobs
a business model. Employment generation, profit at the local level. One example is a community
sharing, more equitable distribution of resources, group that produces buri hats as a handicraft
market linkages, and the like are part of the SE industry. These hats are woven by women in their
mission. In SE, there is horizontal and vertical homes. The marketing of the hats is centralized.
integration. Thus, any number of women can participate as
production is home-based and there is a ready
PEF empowers small entrepreneurs, jump starts buyer.
small businesses, and gathers small producers Social enterprise tries to transform the members In some cases, people involved in social
to market their products. Everyone benefits since In my talks and visits to the people we are of that enterprise not in terms of an employer- enterprise need to have some form of charism.
SE has a multiplier effect. For example, a bakery helping to start social enterprises, I have realized employee relationship, but in terms of collective When I say charism, I mean that not everyone is
project PEF supported employed as many as 30 that a social enterprise cannot be based on discernment and companionship. It is more like born to run or to lead the social enterprise. This is
people working in shifts. Aside from generating ready or set formula. SE also has to deal with a cooperative in that sense although not quite not to say that not everyone can go into SE. We
income, the project hired as many people as human factors. You need leadership, you need exactly. This is where there can be plenty of need leaders, people with charism, to initiate and
possible. discipline, you need preparation, and you also flexibility and experimentation. shepherd, and to catalyze a multiplier effect in
need outside help. every SE endeavor.

10 11
 I. Creating Our Space Attempts at Social Enterprise

Inclusive Growth
small farmers because these banks are unfamiliar
with the risks. The same banks that said this
exactly 30 years ago are still saying this today.

through Strengthening And so it goes that those who help empower the
various participants in the value chain end up

of SE Competitiveness
empowering the most powerful.

If inclusive growth is about enabling the poor to

Joey A. Bermudez
Adviser, PEF Finance & Investment Committee | Social Enterprise Conference, 14 November 2014 grab their just share of value, we must engage
the entire ecosystem that feeds the pockets of
the poor. It is amazing that while microfinance

I
institutions lend to the entrepreneurial poor, they
am social entrepreneur. Like-minded colleagues What is just? Just is that which is commensurate
totally ignore the borrowing requirements of the
helped me organize a non-bank financial to a person’s contribution to the value creation
consuming poor. My company’s involvement in
institution that now lends very aggressively to process. Let me be more specific. When a
the financing of blue-collar workers is an offshoot
the so-called “unbankable.” These are segments worker contributes 10 percent of the input into
of this realization.
of the population that mainstream financial the value chain and receives only five percent behaviors. Why should they? What is wrong with
institutions avoid with a passion. Our companies of the reward from the value chain, the growth achieving progressively higher returns on a high-
We saw that microfinance institutions in Metro
operate in the Philippines and in Canada where achieved is unjust. When I talk about inputs, I’m risk investment so that profits can be plowed back
Manila were adequately covering the micro-
hundreds of thousands of Filipinos work and live. not just talking about money or person hours. into the production of social goods?
entrepreneurs yet no financial institution was
I’m talking about risks, opportunity costs, and the addressing the consumer finance requirements
In our journey toward sustainability, we have had engagement of the human psyche. An enterprise must decide whether it is an
of the poor -- the very same guys who actually
to pay our dues. We have gamely swallowed our enterprise or not. The fact that a social enterprise
patronize the products and services of micro-
fair share of loan losses. These losses have a way In the situation I just described, some obviously produces social goods does not detract from
entrepreneurs. Who else but the minimum wage
of shrinking one’s wallet, and more important, get more than their just share of the economic its inherent character as an enterprise. And
earners would buy the merchandise of ambulant
one’s confidence. But we have survived, and we output. This is called “elite capture” -- a the seeming dynamic tension between profit
vendors as well as small carinderias or enroll
have continued to grow, and we’ve stayed on phenomenon not exclusive to the Philippines but maximization and social entrepreneurship is
their children in start-up neighborhood schools?
because we obstinately believe that the modus particularly true of societies that believe value rooted in the confused notion of double or triple
Give the minimum wage earner significant
vivendi for engaging the unbankable sector in chains should be left unregulated. In reality, these bottom-line.
purchasing power and you will see a palpable
profitable and sustainable enterprises ought to be value chains, by default, are regulated by the
rise in the sales volumes of micro-entrepreneurs.
found and propagated. most powerful players in the chain. A business that looks at profit as anti-society is
We can romanticize social enterprises all we in serious trouble. The notion of double or triple
We’ve stayed on because society demands Traditional financing institutions gravitate toward bottom-line is true only in the short run. In the
want. But the fact remains that they are high-risk.
nothing less of social entrepreneurs. Inclusive the large borrowers and have no patience to deal long run, the interest of society and the interest of
If they are high-risk, they must be allowed to use
growth happens only when each participant in with the administrative nightmare of dealing with enterprises must converge. In other words, there
all the means to deal with the risks they face.
the value chain gets his or her just share of the small-ticket risks. Over the last several decades, is only one bottom-line in the long run.
There is nothing more foolish than demanding
value created in the chain. I have heard banks say that they cannot lend to
that social enterprises avoid profit-maximizing

12 13
 I. Creating Our Space Attempts at Social Enterprise

Executing the Strategy

An environment that allows a healthy amount of
risk-taking and an enlightened notion of reward
and punishment will promote entrepreneurship. Roberto “Bobby” Calingo
A performance management system that Executive Director
measures results not by quarters or years
but by the progress made in the attainment

P
of the corporate mission will promote social
eace and Equity Foundation (PEF) is a In 2009, we took a long, hard look at our impact
entrepreneurship. No social enterprise can be
social enterprise organization. Our aim— on poor communities. We found significant,
a company enamored with fancy accounting
to borrow from former chair, Archbishop measurable impact on quality of life in projects
standards that obsessively measure business
Antonio Ledesma—is to give households a steady that had economic enterprise or business
success through year-on-year profit growth.
foothold on sustained livelihoods and incomes programs such as lending, marketing, or trading.
Short-term profit performance has absolutely
through social enterprises. What is a social The consequence was a decision to favor social
nothing to do with the attainment of a company’s
enterprise? It is a real-world business that, in enterprises.
mission.
order to have social benefits, also needs to make
money. Altering our development strategy was a game
Social enterprises have enough creativity and
changer. We faced the unfamiliar practice of
How can government provide an environment risk appetite to drive themselves to generate
In truth, we are latecomers. The Filipino social using the power of business to bring about social
that enhances the competitiveness of social competitiveness and sustainability. Left alone they
enterprise sector began taking shape toward the and environmental change. It meant retooling
enterprises? I would like the social enterprise will survive. They will grow. They will flourish.
end of the 1990s. PEF essentially stayed on the our fundamentals: the focus of our assistance
community to look at regulators straight in Society has a way of rewarding the producers of
sidelines of that sector during its first ten years. and prioritization of beneficiaries, the design
the eye and say, please, stay out of my eye. social goods in the long run.
For once, government must stop acting like a
compliance officer and start behaving like a Of course, social enterprises can use some help.
coach. The answer to a growing social enterprise But it must be the right kind of help. Not the kind
sector is not to formulate a set of rules that inhibit that just messes up the rules of engagement in
the sector. a playing field that they have painfully worked
hard to master. In the course of achieving
That social enterprises exist is testimony to the competitiveness, social enterprises can create
failure of public institutions to lead the production inclusive growth by promoting ecosystems not
of social goods. Government must stand behind, dependent on unjust value chains.
not in front of, social enterprises; to either
cushion their setbacks in the face of formidable
risks or push them into momentum as they crank
their engines.

14 15
 I. Creating Our Space Attempts at Social Enterprise

and delivery of support to partners, measurement coconut, cane sugar, cacao, coffee, and what commercial because they placed significantly Our staff members also lacked preparation.
of impact, and even the skills of the people we we call ‘climate-smart’ agriculture practices. The higher value on social objectives. While we recruited new staff members, we
hired. focus on these five commodities stemmed from tended to hire development workers with some
an evaluation, midway through our SE strategy, We did have partner NGOs willing to go into livelihood knowledge but not much enterprise
The period 2011-2015 saw PEF investing P572 that agri-business was the most effective model commercial activities. However, some of them experience. The trouble was that we could not
million in 179 social enterprise projects with to push economic development in rural areas. had internal systems unsuitable for running an find suitable people “off-the-shelf”. We spotted
a direct impact on about 111,000 households We see these five commodities as flagship enterprise. We still had to provide so many some people from the commercial banking
all over the country. Beyond the numbers, what commodities with the highest potential and PEF inputs in certain areas like policy-setting and sector but we could not afford their asking
have we learned in promoting, managing, and channeled about P70 million into 26 C5 projects. even staffing. salaries. Moreover, they did not have the right
growing social enterprises? social orientation so they would not have stayed
PREPAREDNESS Other NGO partners had adequate internal long with us anyway. We had to train our staff
FOCUS How PREPARED were we to build viable social systems already—especially the co-operatives— members from scratch. We had to convert
When we decided to move into social enterprise, enterprises? For our partners, the question really but many of them were not very efficient people who were socially motivated and inject
we had little—if any—social enterprise was whether they could go into commercial- since some of their production processes in them economic advocacy and skills. It has not
experience. For the most part, our experience level activities, bearing in mind that a livelihood were subsidized. They had little exposure to a been easy teaching our people how to manage
was in assisting the social development and project was not the same as a commercial commercial market; they were not prepared to businesses.
advocacy projects of our partner organizations. project. A commercial project needed to factor use scaling up and market competitiveness as
There was some experience in giving grant in quality, volume, price, and delivery. primary drivers of the enterprise. Essentially, we had to fix the inadequacies in our
assistance to livelihood projects. Some of these internal systems. What we did was to retain our
projects went into cost recovery and marketing The market also could be unforgiving. When Internally, PEF also began to rethink its mission grants-based platform but to “SE-tize” it. We
of products and services to sustain operations; the market learned that a product was from as a development support organization. For migrated our grants-based system—tweaked it a
however, the overriding mandate was to support a nongovernment organization or nonprofit, the first 10 years, it was primarily a grant- bit—and used it to build social enterprises.
a social vision. There really was no emphasis on it might give that NGO’s product or service a making organization, with most assistance
enterprise development but on promoting social try. However, should the product be faulty, the allocated to advocacy. There were livelihood PEF AND PARTNER RISK
advocacies. delivery poor, or the price too high, the market and microfinance projects but these were not PEF’s history and past experience made it strong
likely would not make a repeat purchase. the kinds of projects that could become social as a social development organization but weak
Although PEF assisted several livelihood enterprises. Our emphasis on grants meant that a as a builder of social enterprises. We performed
projects nationwide in the past, none of them Many NGOs were either unprepared for this significant proportion of our investments were not poorly when doing economic assessments. Our
were conceived as enterprises that could drive kind of market environment or unwilling to recoverable. economic projects became high-risk endeavors
growth and progress in a particular industry or adjust to it. Frequently, it was a question of because we saw only the social risks.
community. They were mainly small economic mindset. These NGOs considered advocacy There also were weaknesses in PEF’s own internal
activities like relending and small marketing. work as primary and could not identify or relate systems, specifically, in the way we developed As a result, we failed to put in proper measures
with doing business and making money. In projects, pinpointed problems, and spotted to mitigate possible business risks. In some
FOCUS is the first important issue in our move those instances when they did sell something, opportunities. None of these were suited to cases, our financial exposure to projects
to social enterprise. We focus on rural areas, it was only to help them sustain and grow their building businesses. escalated significantly because we did not spot
that is to say, in agriculture. We sharpen the advocacy. This difference in mindset made a problem in the partner’s assessment of the
focus further on five commodities (C5), namely, it difficult to encourage these NGOs to go

16 17
 I. Creating Our Space Attempts at Social Enterprise

enterprise. Either the enterprise started losing For example, there is an incentive policy to
money or its costs escalated, making it difficult help grow social enterprise projects. However,
for the partner to repay the money we put in. We once a project becomes a business entity, it
were forced to infuse additional funds to avoid begins to encounter a multitude of regulations
collapse. and requirements. NGOs that are still ”testing
the waters” of social entrepreneurship find
It is paramount that we improve our ability to themselves forced to “swim” economic regime
anticipate and plan for business RISKS in our waters even though they are not yet ready.
assisted social enterprises.
STANDARDS
SUPPORT SYSTEMS Another issue concerns standards, especially
We had to develop the support system for our for food products. There is a need for our
partner NGOs largely from outside. We had partners to be registered with the Food and Drug
to commission external consultants to craft and Administration (FDA) since they mostly make
deliver the training we provided to partners food and health products.
because we did not have the in-house capacity.
Both the regulatory environment and the
The problem with consultants is that, for the most standards affect the competitiveness of social
part, they are not practitioners. Our support enterprises. An ideal situation would be
systems still need the services of mentors who along the lines of the United Kingdom’s social
actually are involved in developing or running investment tax relief, which allows people to
businesses, but it has been hard for us to tap deduct 30 percent of the cost of their investment
these people. This is because our networks in social enterprises from their income tax
generally are social networks and not enterprise liability. In Malaysia the government has have started entering the domestic market. The our baseline study to determine whether social
networks. allocated the equivalent of US$5 million to boost only commodity protected in this country is rice. enterprises really benefitted communities and
the number of social enterprises to 1,000 by Filipino social enterprises still cannot compete households.
This explains why our support systems remain 2018 from around 100.1 with their ASEAN counterparts exporting similar
relatively insufficient. products like chocolates, coffee, sugar, and many We are among the first NGOs in the country that
ASEAN INTEGRATION more. invested substantially in research to measure our
REGULATORY ENVIRONMENT We have been slow in addressing drawbacks efficiency and impact. From this research, we
An important issue is the regulatory environment in regulations and standards affecting social MILESTONES learned that our targeting is correct in terms of
for social enterprise. We have many laws enterprises. In the meantime, ASEAN’s Common The period 2011-2015 was a learning period beneficiaries and areas. We also found a need
that promote enterprises in rural areas but the Effective Preferential Tariff scheme went into effect both for PEF and its partners. We paid a high to improve the way we developed enterprises,
policies are not aligned and—at times—even in 2010. With the dismantling of tariffs, many price for this learning phase not just in terms particularly in the amount of support we gave
contradictory. lower-cost products from our ASEAN neighbors of the money invested in projects but also in and the timeliness of the support.

1 Zweynert, A. (2016, 15 September). Exclusive: Fears for social entrepreneurs in Britain as Brexit looms large.
Reuters. Retrieved from http://www.reuters.com.

18 19
 I. Creating Our Space Attempts at Social Enterprise

Measuring SE Impact
We learned to focus our assistance, in contrast to acknowledged as among the few successful cases
our previous practice of investing in everything. of block farming in the sugar industry. In the
To be sure, we will continue helping livelihood areas where we succeeded, we expanded the Anna Marie A. Karaos, PhD
projects and non-economic activities—advocacy, farm area. We now have a template for scaling Trustee, 2011-2016
shelter, and basic services such as water and up social enterprises both in coconut and sugar
lighting—but we will manage them more cane. This is why the next five years will be

I
sustainably. The returns in such projects are focused on scaling.
n its 2011-2015 Strategic Plan, the Peace
low; it is enough for us to recover the capital.
and Equity Foundation (PEF) sought to craft a
Remember that the benchmarks for such projects We also are improving our support systems,
monitoring and evaluation system that would
are very different from those of economic including the recruitment of field workers. We
measure the attainment of its objectives based on
projects. now hire people from development banks who
a clear set of impact and outcome indicators. My
know the work that we do. We are deepening
fellow trustees and I have long sought answers
Of the five agricultural commodities we our workforce bench.
to some very critical questions that would have a
prioritized (C5), only cane sugar and coconut
bearing on how we chart PEF’s future directions.
have gained traction largely because they are Our due diligence process has been modified.
Among the most important questions we asked
“stand-alone” commodities. The others like cacao Side by side with our strength in social
were:
and coffee need to be intercropped with coconut. development, we enhanced our capabilities in
enterprise development, a move endorsed by
• For every peso PEF invested, how much
I should explain that our early strategy was to the PEF Board and the general assembly. This
did household income increase? Was there
develop stand-alone commodities. That was not is a big step because we now have economic
evidence that PEF should continue supporting
feasible and, in that respect, we did not help in benchmarks for developing economic programs.
social enterprises (SEs)? IMPACT STUDIES
the growth of the cacao and coffee industries. Currently, we focus on a few enterprise sectors
• What were the instances wherein households We have endeavored to conduct impact-oriented
The problem of these industries is that there is for scaling up and we no longer try to scale up
and SEs grew together? Or left each other studies, in particular baseline studies, for the past
very little planting going on. In the Philippines, everything. Not everything is scalable.
behind? Was there any distribution of value? years. The studies were intended as our first steps
the amount of hectares planted to coffee and
• How many households were reached? How in conducting an “outcome evaluation” that can
cacao is dwindling. Instead, for these crops, we We should have done this during the 2011-2015
many moved out of poverty? How much was be completed after the maturity of our projects.
supported buying and value-adding enterprises, period but we did not have the social enterprise
the increase in their incomes? So far, we have done three baseline studies, the
which admittedly was not strategic. Although experience back then. Now, we do and we have
first in 2012 involving 3,000 households, and
we were helping the planters, we were not a fairly good idea of the next steps to take to
It was clear to us that the answers to these the second in 2014 covering 1,500 households.
addressing the root cause of the industry’s grow our strategy.
questions must be based on reliable data which A mid-term study on the first batch consisting
problem: the lack of hectarage.
can be obtained through impact studies. Without of 2507 households was conducted in 2015
these studies, any answers would remain only to monitor and measure changes, if any, in the
Our focus on coconut and cane sugar has
speculative. Our personal observations may be respondent households’ quality of life.
resulted in some headway in sugar. We are
useful but I liken these to a few pieces of a jigsaw
doing block farming in what is generally
puzzle, they cannot paint an entire picture of the All the impact-oriented studies used control and
real scenario of our SE programs. experimental groups as part of the methodology.

20 21
 I. Creating Our Space Attempts at Social Enterprise

SE Strategy: Taking Stock

This was important to control for variables One good conclusion from the mid-term study is
affecting changes in sample selection and to that SEs contribute not only to income increases
account for changes at the household and but also to creating opportunities for raising
community levels that could not be attributed
to our SE efforts. We also did a baseline to
income or identifying other sources of income.
Another favorable conclusion is that SEs help of the First 5 Years
establish a profile of existing businesses at the to minimize the vulnerabilities of the poor. We Benjamin D. Abadiano
community level. need to further translate these conclusions into PEF Chair, 2014 to present
measurable indicators.
LEARNINGS

I
We at PEF can now reduce the number of The creation of opportunities and the n 2011, we were a new player in the field of
indicators to the most critical ones because of minimization of vulnerabilities are mutually social enterprise (SE). The big challenge for
our experience in conducting impact-oriented reinforcing concepts. Opportunities and the Peace and Equity Foundation (PEF) was
studies. With the Foundation’s first batch of vulnerabilities are inversely related. As the to find working SE models and replicate them.
SEs, we should be able to identify and present poor’s opportunities increase, their vulnerabilities We travelled the country in search of these
common factors that could make an SE either decrease. For example, opportunities open models and for partners that could propel the
fail or succeed. We should now be able to spot access to assets that are useful in times of crises SE agenda. We saw promise in nine projects
signals or red flags that can tell whether a social and disasters. PEF should investigate ways to and invested in them. This became our “unang
enterprise will experience problems later, and incorporate these concepts and findings into its taya” (initial gamble) to the idea itself and to the
have inkling on the nature of these challenges. performance indicators. enterprises that needed support.

Social enterprises have their own business cycles. There are rich data for providing indicators At the same time, we saw gaps in handling real
They have unique peak seasons in terms of of impact from PEF’s first five-year period as business concerns by our traditional partners who
income and benefits. One important lesson we a social enterprise organization. We need to ventured into SE. We recognized the importance
learned was that PEF has been trying to fit all the mine the data further so that we can gather of capacity building for sustaining the enterprise
enterprises into one business cycle when we did enough evidence on the impact of SEs on poor and surfaced the role of the private sector in
the baseline studies. A particular business cycle communities. tapping SEs for their supply chains. Hence, we ever, agriculture remained the best option. For
might not be applicable to all SEs. It is probable firmed up the enterprise ecosystem that partners PEF, five flagship commodities held the biggest
that PEF has not yet analyzed the data sufficiently We are trying to achieve scale to increase the could tap to grow their enterprises. These include potential. We channeled about P70 million
to understand the variations in the business cycles number of households impacted by our SE capacity development, networking, technology, to 26 projects on cacao, cane sugar, coffee,
of SEs. programs and projects. And when we say we marketing, and appropriate financing. Close coconut, and climate smart agriculture practices,
want to scale up, we want to see successful and to P572 million funded 179 projects to help otherwise known as “C5”. The models we have
It makes sense to compare beneficiaries with fully grown SEs making profound and positive enterprises navigate through quality control, developed aim to show impact in the lives of
non-beneficiaries so that we can identify changes differences on as many households in the value pricing, innovation, and competition. sugarcane farmers through block farming, and of
influenced by a social enterprise. However, in chain as possible. This is the reason why we coconut farmers through new product lines such
terms of measuring desired changes, we need to started the SE program in the first place, and the Midstream into the five-year strategy we paused as geo-nets for bio-engineering and village-level
narrow down indicators to a few strategic ones. vision of where we want to go. and reflected: What would truly hasten economic virgin coconut oil processing.
development in rural communities? More than

22 23
 I. Creating Our Space Attempts at Social Enterprise

coupled with the right scheme and the right Institute, and the Holdings Company will be the
instrument. Two, we realized governance affects underpinning pillar in this campaign. We will
the potential of an SE to scale up. Setting up the diversify our investments to generate sustainable
appropriate structure, policies, and processes revenues to support our programs over a long-
is necessary to strengthen the accountability of term horizon, and manage downturns. To rely
the partners in running the SE. And, three, we largely on the performance of our investments
discovered that SEs can create or expand both in stocks and bonds may prove riskier now
opportunities and risks for households as they since these are vulnerable to volatilities and
engage with the mainstream market. Stronger uncertainties.
support systems are needed to better monitor and
sustain benefits to the community. Following the election of a new Philippine
president, we anticipate that a new political
Clearly, these are on-the-ground realities that environment will impact on SEs at all levels.
continue to challenge us. How to effectively spot, The future holds opportunities; the economy
screen, and scale up social enterprises must be remains good as of this writing. Barring
sharpened in the way we develop projects. At the any major financial crisis, the country will
end of the day, we need to ask ourselves: How continue to reap positive returns. It is up to
do we know that we are getting there? When can us to translate these returns into programs
While testing models, setting up the ecosystem, Toward the end of the SE strategy in 2015, we we say that an SE is truly successful? that create an inclusive growth environment
and focusing the portfolio, we also invested revisited the first enterprises and households for the marginalized sectors, strengthen the
heavily on capacitating our partners to make included in a baseline survey we conducted Of course, a five-year span is too short a period entrepreneurial skills of our partners, and attract
them investor-ready and thrive in a very in 2012. What we found were better product for us to say that we have become SE experts. impact investors to our innovative projects.
competitive market. We structured capacity pricing, improved production processes, and In the next five years, we will sharpen our focus With the new management structure in place,
building into modules covering areas critical access to potable water—early signs that the to scale up SEs not only on C5, but also on a flexible cross-functional team is primed to
to the growth of an enterprise. Through the social enterprise generated additional income basic social services and Islamic financing. We cater to the evolving needs and challenges of our
Accelerating Capacities of Enterprises or ACE for workers and suppliers from the community. will reinforce and diversify our leverage with stakeholders.
Program, the partners were taught by experts Newly-acquired skills improved their confidence social investors to meet the increasing investment
and seasoned practitioners on growth planning, to new market opportunities. It is encouraging to requirements, level up the business management Our Foundation’s experience and lessons have
business management, and risk analysis. Eight know that this time, we hit the mark in targeting acumen of partners, and firm up our internal laid the groundwork for the next stage.
partners and 24 managers completed the the right poor households. systems, processes, and competencies. The potentials of social enterprises remain
four-month course and acquired a combined exciting. Early indicators that social and
investment of P85 million after giving their What have we learned? Let me point to three We will enhance our pipeline development economic benefits, indeed, reach the poor are
“pitch” on the business plan to the PEF Program important insights. One, we found out that the process by tightening due diligence requirements inspiring. I am optimistic that the next round will
Committee. one-size-fits-all formula might not work as each to ensure that enterprise proposals pass the bring us closer to our mission of creating positive
SE is unique. Customized financing provides criteria that will lead to real impact investments. change in the lives of the communities we serve—
the right amount of investment at the right time, The alignment of the Foundation, the SE one scaled up social enterprise at a time.

24 25
 Attempts at Social Enterprise

II. Building The Ecosystem

Introduction

F
or the Peace and Equity Foundation (PEF) weaknesses of these organizations. Furthermore,
to effectively support social enterprises it harnesses opportunities while minimizing risks
(SEs), it must have a basket of goods to and threats.
offer partners and communities. One of the most
important lessons learned in its two decades Social enterprise has a short history in this
of existence is that a one-size fits all formula is country and when PEF started out in 2001, it
bound to fail. had to do its own mapping of the SE ecosystem.
The dearth of models and best practices meant
Each stage and each component of social that PEF had to be hands-on as it learned from
entrepreneurship must take into consideration experience. There were hits and misses but the
the physical, and the socio-economic-cultural- foundation benefitted as its knowledge base is
political characteristics of the targeted enlarged, and its learning curve progressing in
geographic area, as well as the governance an upward trend. Despite much progress made,
structure, systems and processes of the PEF must work with other groups and individuals
proponent. Financing, capacity building, since some interventions may not be within the
networking, technology, marketing and other domain of the foundation’s core competencies.
interventions must be specifically designed and
implemented, factoring in complex internal and PEF has forged strong and strategic partnerships
external variables at play. for SE programs and projects. Non-profit entities
account for more than half of that partnership.
SE projects gestate in partnership with Engagements aside from civil society, especially
organizations or networks of organizations with national government agencies and local
that, in turn, are within the bigger external government units, result to synergy and the
environment. Strategic focus of interventions efficient utilization of shared resources.
brings out the strengths, and tempers the

27
 Attempts at Social Enterprise

Every Peso
Wisely Lent and Spent
Multi Sectoral Alliance for Development – Negros

F
or small Filipino farmers, access to financing In years of taking calculated risks, PEF realized
is almost always non-existent because that appropriate financing for agricultural SEs
Lesson #1: they are viewed by traditional creditors requires a big investment—it has to be adequate,
as high-risk. Sadly, even cooperatives, which otherwise it would fail. Aside from being
Appropriate are supposed to carry less risk as they are
organized, have limited access to affordable
sufficient, funding should be timely. The release
of funds must be done before the planting season
Financing financing sources. The Peace and Equity
Foundation (PEF) heavily invests in agricultural
for soil preparation and other pre-planting
activities. It is also unwise to ask farmers to
social enterprises (SEs) as they can bring about pay for loans before the harvest because most
meaningful improvements in the lives of the rural would not be able to pay to and end up unjustly

C
ustomized financing provides the right financing scheme and instrument to ensure that poor. penalized.
funds—whether grants or loans—are both sufficient as well as given and collected at the
right time. It is suited to the needs and nature of the partners and household/community
participants and factors in external variables. Small farmers in Negros organized themselves into
working clusters to access financing, harness shared resources, effectively capacitate themselves,
and tap markets. This strategy maximized production and yielded more profits. In thinking outside
the box, they aggregated themselves into blocks.

28 29
 II. Building The Ecosystem: Appropriate Financing Attempts at Social Enterprise

Sugarcane is a priority crop of PEF and bulk Each farmer-participant enrolls two to three
of the projects are in the Negros Island. In hectares of farmland to the cooperative. When
2015, PEF allocated P13 million for cane the total number of hectares reaches 55, a block
sugar, representing 27 percent of C5 grants.2 farm is started. Each block farm, with 20 to
In partnership with the Multi-Sectoral Alliance 26 participants, signs an agreement with the
for Development-Negros (MUAD), PEF cooperative to manage the land for three years.
organized four farmer organizations that
adopted Diversified Block Farming (DBF) The loan allocation and drawdown scheme are
practices: Crossing Ibos Farmers’ Cooperative, based on the sugarcane crop production cycle;
Dancalan Ilog Waterworks and Agro-Industrial thus, enabling farmers to meet their obligations,
Multipurpose Cooperative, Sampak Small avoid loan penalties, and tap financing that
Farmers Association, and Tabugon Livestock otherwise would not be available for them.  With
and Poultry Raisers Association. Each group financing schemes suitable to sugarcane farmers,
received approximately P6 million pesos worth production techniques can be significantly
of assistance in the form of loans, grants and improved in both the immediate and long terms.
credit line. The fund covers four block farms
totaling 220 hectares and involving 108 farmers. In the beginning, farmers’ organizations met
It aims to achieve improvements in four areas: difficulties and delays in loan disbursements
professionalized farm management, diversified due to their limited capacity to comply with
skills enhancement, integrated farming, and financial and narrative reports and other PEF
asset creation.  The grant portion of the fund is requirements. MUAD individually coached the
used for coaching and mentoring on enterprise farmers on how to prepare these reports. This
management, financial literacy, and technology also capacitates them so that they can do their What went wrong? One major factor is pole phenomenon in Negros drastically resulted to
demonstration on model farms. reports independently in the future. This proved vaulting, or trading of sugar cane outside the lower than expected yields.
to be a time-consuming process, given that the usual farmer-cooperative contracts. In hindsight,
By organizing small farmers into blocks, reports are technical in nature. farmer groups attributed this problem as an With the project still underway and despite
economies of scale will reduce production costs, internal weakness that could have been avoided the setbacks, PEF hopes to achieve gradual
increase production yield, and achieve better Only one of the four block farms generated during the selection of farmers to be included but sustained improvements in the areas
efficiencies. However, a sizable amount of positive results and could receive another funding in each block. The farmer’s commitment and previously identified—institutional support, client
investment is needed to move sugar cane SEs on their growth plan in 2015. The other three financial position must be carefully evaluated development, asset creation, and technology
to a viable scale of 75 tons per hectare. These were tasked to prepare a remedial plan to to minimize the tendency to pole vault. Another demonstration. In social enterprise, patience
resources should be enough to cover human, complete the cropping cycle. factor is the unavailability of labor and is a virtue; stumbling blocks must be properly
technological, and business investments. hauling trucks during planting and harvesting addressed and in doing so, something negative
season. Also, the effects of the El Niño weather positively contributes to the learning process.

2 C5 stands for PEF’s four priority crops—coconut, cane sugar, cacao and coffee as well as climate smart agriculture.
In 2015, PEF spent 46 million pesos for C5 compared to 26 million pesos for non-C5 projects.

30 31
 Attempts at Social Enterprise

Preparing for Growth

Greenlife Coconut Products Philippines Inc.

E
ven social enterprises (SEs) that show great raw VCO processing plant at a low setup cost of
growth potential fail to make the most P650,000, which includes the housing structure
of existing market opportunities because and equipment. The raw VCO processed at this
of their limited capacity to expand. This is plant becomes a standardized and high-value
particularly true for SEs in the agriculture sector. coconut product.
Lesson # 2:

Capacity Green Life Coconut Products Philippines Inc.

started as a sole proprietorship in Quezon
Green Life is working with the Peace and Equity
Foundation (PEF) on a project to improve the

and Structure Province in 2001, and was incorporated in

2014. It is pursuing an expansion program
quality of VCO processing by building the
capacity of six village VCO processors as
backstopped by a capacity building program to their supply base. These processors directly
develop competencies within the organization or indirectly employ about 120 workers from

E
ffective governance enhances the potential of a social enterprise (SE) to scale up as and among the farmers that it works within coconut farming communities. The business
appropriate structures, policies and processes capacitate and strengthen partners in running villages. By enhancing the skills and knowledge model recognizes that family incomes will
SEs. With local and global markets in mind, a business entity’s first move was quality control of coconut farmers and virgin coconut oil (VCO) increase with value adding rather than just selling
at its very source—the farming villages that harvest coconuts and process raw virgin coconut oil processors, Green Life prepares them to tap the whole coconuts.
(VCO). Only when a reliable supply of standardized high quality processed VCO is assured can domestic and global markets.
a successful marketing plan be implemented. No amount of marketing can sustainably sell an Green Life took a loan to help them improve
inferior product. The consumer is the final arbiter of a product’s quality, or the lack of it. Based in Tayabas, Quezon, Green Life produces VCO processing, comply with standards, and
an array of coconut-based products, including secure certifications as producers of fair trade
Also profiled in this section is a health company that services poor communities while keeping coco sugar, coco vinegar, VCO soap, coco jam, and organic goods. Under the program, Green
itself financially afloat. Faced with dwindling donations, a non-profit organization transformed one and other coconut-based specialty products, as Life will purchase the entire output of VCO
of its programs into an income generating corporation that proved to be more sustainable in the well as furniture made from coconut wood. These village processors that will go through organic
long run. A mobile clinic reaches out to poor communities where residents pay minimal fees in VCO products have a diverse variety of health, certification. With this, coconut farmers are
installment for affordable and quality health care packages. Furthermore, the mobility of health medicinal, and culinary uses. Green Life sources encouraged to upgrade their standards, get hold
facilities ensures access to health care as beneficiaries need not spend time and money to go to most of its raw VCO from village-level processors of a stable market, and command higher prices.
the clinic as the clinic goes to them. in nearby communities. To ensure a constant This, in turn makes a more vibrant local economy
supply of raw VCO, it partnered with micro- and creates new and better opportunities for the
entrepreneurs to establish a community-based communities involved.

32 33
 II. Building The Ecosystem: Capacity and Structure Attempts at Social Enterprise

Propelling an NGO’s Transition

to a Business Company
HealthDev Integrative Clinics, Inc.

H
ealthcare in the Philippines has been HDI staff members were given separation
criticized for being both unaffordable pay and were asked to reapply to HDIC,
for and inaccessible to the poor. This undergoing the usual screening process within
is exacerbated by the little trust that Filipinos a probationary period. HDI provided a seed
have of existing healthcare services. Fortunately, capital of half a million pesos and donated all
organizations like HealthDev Integrative Clinics, existing clinic equipment and fixtures to HDIC.
Inc. (HDIC) are helping address these problems.
As a former NGO that transitioned its vital
HDIC started as a program of the HealthDev program into an independent business entity,
Institute (HDI), a non-stock, non-profit HDIC could comply with all government
organization, before it became a stand-alone requirements. The management focused on
clinic in 2007. The Medical-Dental Clinic and installing internal systems including periodical
Laboratory are the primary components of reviews to ensure the new company’s
the Health Service Provision Program (HSP) sustainability.
of the Institute.4 Located at the campus of
As part of the project, Green Life assists farmers Indeed, Green Life is true to its vision of being “ Ateneo de Manila University (ADMU), it HDIC caters to two market segments—ABC (high
in the management of their farms by setting up a leading producer of high value and high provides comprehensive alternative health care and middle income groups) and DE (low income
a recording system of maps, diaries, seeding quality coconut products in a natural way that program that is safe, effective, research-based, group) through the campus-based ADMU clinic
and harvests; and pest management. These help will create jobs for the farmers and help the personalized and systematic.5 and the mobile clinic, respectively. Both clinics
identify areas where farmers need sustainable development of the coconut industry.”3 are interdependent in sustaining the social and
interventions and planting practices to increase This is a good case study of a health-oriented economic value of the services HDIC provides.
coconut harvest yields. NGO faced with dwindling resources from
donors and funders, and the shift of its health The clinic offers medical (family medicine,
program as a separate business corporation to specialty care, physical therapy, acupuncture,
sustain its mission and operations. comprehensive dental services, etc.), laboratory
and diagnostic services. Clienteles include

3 https://www.greenlifecocoph.com/our-story 4 http://www.healthdevclinics.com/about-us
5 Ibid.

34 35
 II. Building The Ecosystem: Capacity and Structure

come in. The Peace and Equity Foundation (PEF)

provided a loan to help improve the service
capacity of the new mobile clinic. This was used
to purchase its first automated equipment in the
laboratory.

HealthDev With the mobile clinic, HDIC is able to reach

Mobile Clinic
out poor communities needing quality healthcare
services through tailor-fit packages and payment
mechanisms based on their financial capacity.
And unlike in the case of the ADMU clinic,
patients need not travel as the clinic goes to
them.
Lesson # 3:
The increase in demand for the services in both
clinics raises the problem of an inadequate
Industry Network
students and employees (and their beneficiaries) number of health professionals. HDIC also
of ADMU, NGOs, and other affiliated recognizes the difficulty in maintaining

N
organizations. Payments are received around low service/package fees given the rise in etworking with other development players from civil society, business, grants agencies,
60 days or less depending on the package and maintenance costs of equipment and supplies. local and national government, among others, is crucial in leveraging for financial resources
scheme. and services. An innovative climate-smart agricultural technology using ducks to naturally
Nonetheless, the HealthDev business model control pests in rice fields while aerating and fertilizing them at the same time has gained traction
The mobile clinic applies a different approach. is proven to work; they restructured from as it spread from one province to an entire region and even outside. More importantly, the practice
HDIC partnered with the Kasagana Ka a foundation to a business entity, rebuilt has converted many disciples from among local and national government, civil society, and
Development Center, Inc. (KDCI), a social their capacity, complied with government funding agencies. The great interest it generated resulted to a multiplier effect as the project is
development NGO that seeks to create vibrant requirements, tested the market, and offered replicated manyfold given the multiplicity of funding resources.
economic and social infrastructures in urban poor packaged services that respond to their clientele.
communities,6 to identify qualified beneficiaries A small producer of coconut husk fiber needed to acquire the technology to rubberize coconut
including employees of small and medium scale To date, the clinics have provided health husks as this value-added product was in high demand for the manufacture of mattresses,
industries. With the K-Kalusugan program, services to 14,820 client beneficiaries and their insulation and furniture padding. Government agencies helped secure funding to farmers
HDIC visits KCDI branches and offers healthcare dependents. HDIC is still learning, checking and producing coconut husks, and facilitated an exchange deal with a foreign company to supply
packages that community members pay in studying their market to find out what they need rubberization equipment at a bargain price in exchange for supplying the finished product. This
installment. KDCI pays half of the total amount of and how to deliver the necessary corresponding small enterprise now earns more than P12 million pesos annually and benefits more than 6,000
availed services to HDIC and settles the other 50 services. Indeed, HDIC lives up to its motto of marginalized farmers. Different stakeholders have been aggregated to leverage financing. As an
percent within the next 30 days after payments “helping people, enriching lives”. adage goes, the opposite of not working is networking.

6 http://www.kasagana-ka.org/

36 37
 II. Building The Ecosystem: Industry Network Attempts at Social Enterprise

Unang Taya,
Taking Risks on SE Ideas
Philippine Agrarian Reform Foundation for National Development Inc.
LG U

A
grarian Reform Beneficiaries (ARBs) must increase production yield without requiring
be able to yield full productivity of their expensive inputs.
acquired lands under the Comprehensive
Agrarian Reform Program (CARP). The CARAGA The IRDFS technology was developed in Japan
Region 13 7 is a rice producing area compelling in the late 1980s by Takao Furuno. It is a
ARBs in this region to yield substantial increases strategy used by Japanese farmers to attain
in rice production. rice sufficiency by using ducks and altering the
conventional way of rice farming. Ducks are
The Philippine Agrarian Reform Foundation for used in fertilization, cultivation, and pest and
National Development Inc. (PARFUND) is a social weed control; thus, stimulating the rice plant to
enterprise that envisions a community where produce more. This technology was transferred to
farmers and farm workers can enhance quality of PARFUND through Jose Apollo Pacamalan who
life with land they truly own by supporting their was trained in the Philippines, Japan and South
initiatives for resource tenure, productivity and Korea. intervention results to a 15 percent decrease in Crucial to the implementation of the project,
rural democratization.8 input cost that translates to a 30 percent increase PARFUND propagated a province-wide
How does duck-farming aid in rice production? in farmers’ annual gross incomes, and up to 15 implementation of the IRDFS through partnerships
In assisting ARBs in rice production, PARFUND Around 150 21-day old ducklings per hectare percent average net income per farmer. with local government units (LGUs), donors,
focused in improving rice yield via technology of rice land is released in a newly planted rice and media. Group of farmers were trained and
transfer, trainings, and seminars. field. Ducks then eat the weeds, snails, insects As a promoter of climate-smart agriculture, landlords were convinced to change their ways
and pests in the rice paddies. Subsequently, as Peace and Equity Foundation (PEF) extended of traditional rice farming and adopt IRDFS.
PARFUND introduced the Integrated Rice Duck ducks roam around probing the paddies, their a P6.7 million loan to PARFUND to aid in the
Farming System (IRDFS) that incorporates duck webbed feet stir up the soil and water, resulting establishment of a duck center to address the Following the partnership between PEF and
raising as a crucial element in rice farming. to land stimulation and aeration. Ducks wastes shortage of ducklings. For a five-year period PARFUND, and a subsequent front-page
It uses ancient agro-ecological principles to also become natural organic fertilizers. This (2012-2016), the project aimed to cover news article in the Philippine Daily Inquirer
the duckling requirement of 1,800 hectares (June 24, 2013), PARFUND’s IRDFS triggered
of lands for 1,800 IRDFS farmers-adapters massive interest in the rice-duck technology
with corresponding technical, financial, and among farmers, LGUs in Mindanao, and
7 The Caraga Region (Region XIII) in northeastern Mindanao includes the five provinces of Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del marketing support of around P2.16 million. other international agencies. Funding for the
Sur and Dinagat Islands; and the six cities of Butuan, Cabadbaran, Surigao, Tandag, Bislig and Bayugan.
8 https://www.facebook.com/pg/PARFUNDInc/about/?ref=page_internal

38 39
 II. Building The Ecosystem: Industry Network Attempts at Social Enterprise

Leveraging Partners
for Growth
Juboken Technologies

F
inancing social enterprises (SEs) is often car seat insulation, and padding for furniture
difficult because they are considered upholstery. However, Juboken could not afford to
high-risk investments. To overcome this import the rubberizing equipment.
financing obstacle, a Bicol-based SE, Juboken
Technologies, leveraged its production knowhow Juboken solved this problem with help from the
and pool of local partners to sustain and grow its Department of Trade and Industry (DTI), which
technology flowed continuously. A German that IRDFS will lead them to greener and more business. negotiated a deal with a Chinese company.
doctors’ organization provided P8.67 million environmentally sound provinces. The Chinese company would sell to Juboken
grant to use IRDFS in controlling the spread Juboken processes coconut husks sourced from rubberizing equipment at a bargain price in
of schistosomiasis (a snail-caused disease). To date, PARFUND’s IRDFS model has opened local farmers into coconut fiber, an effective exchange for a constant supply of rubberized
Interchurch Organization for Development several development opportunities in the material for controlling soil erosion. Through its coconut fiber from Juboken.
Cooperation (ICCO) gave a grant of P8.37 CARAGA region including climate change bioengineering arm, Juboken pioneered the use
million to upscale the organic rice/duck industry adaptation, organic farming promotion, and of coco fiber nets or coconets in slope protection, Juboken started by building a steady network
in a value chain approach. Keidanren Nature the control of the spread of schistosomiasis. Its river and shoreline rehabilitation, and erosion of suppliers of coconut fiber. It worked with
Conservation Fund (KNCF) contributed a P1.66 benefits have trickled down to the penoy/balut control. It markets its products in the Philippines the Philippine Coconut Authority (PCA) and
million grant to expand IRDFS in the preservation (fertilized duck eggs) industry, and duck meat and other countries in Asia and Europe. the Department of Agriculture (DA) to help ten
of Lake Mainit’s ecological biodiversity. The production and processing. Juboken’s main competitors are coconut fiber farming cooperatives in Bicol produce coconut
Butuan LGU, Oiko Credit, Pres Climate Action producers from Sri Lanka and India, which offer fiber. The participating government agencies
Project (PCAP), and Philippine Tropical Forest PARFUND eventually became a corporation. much lower prices. brokered funding from the Spanish Government.
Conservation Fund (PTFCF) support the However, due to organizational issues, PARFUND Juboken would provide training as well as seed
technology with additional funding. ended project operations. To sustain the business, Juboken sought to capital to the cooperatives to run their production
diversify the uses of the coconut fiber it produced. facilities. However, the proposed no-collateral
In March 2014, the International Conference PARFUND’s IRDFS was proven to be an In other countries, coconut fiber is processed with government loan did not materialize due to the
on Rice Duck Farming took place in Bukidnon innovative and viable business model and a natural rubber latex. This rubberization process delay of acquisition of the rubberizing equipment
and was attended by both local and foreign successful case of technology transfer benefitting gives the coconut fiber resilience and ability to as it took time to raise the necessary funds.
farmers. Regional government officials pledged small farmers while promoting climate-smart and conform to a person’s body shape. The resulting Juboken could only support three of the ten
their support to the industry and expressed trust sustainable agriculture. product is used to produce bed mattresses,

40 41
 II. Building The Ecosystem: Industry Network

Lesson # 4:

Technology
Efficiency

T
cooperatives. The rest of the cooperatives had to such as DTI, DA and the Department of Public he proper combination of hard and soft technologies that are appropriate and customized,
temporarily halt the operation of their coconut Works and Highways (DPWH). These linkages cost-efficient, less polluting and more reliant on renewable energy makes social enterprises
fiber facilities. have given it access to a steady supply of raw more competitive. A small cooperative in Abra received foreign funding for the acquisition
materials. Juboken’s strength is in bringing of a mechanized muscovado processing facility in 2012 and after a few successful years, that very
Having acquired the rubberizing technology, together different stakeholders to leverage facility ceased operations. Organizational weaknesses, the absence of a second-tier leadership,
Juboken approached the Peace and Equity financing. These partnerships reduced Juboken’s the atavistic tendency of old habits that die hard, and inefficient technology were some problems
Foundation (PEF) to support the project. Based financial pressures, improved its cash flow, cited. PEF’s timely intervention of effective plant operations management, hiring the necessary
on Juboken’s projections, each participating and lessened its costs. Juboken succeeded expertise, and technological improvements and innovations reversed the decline and restored the
cooperative will realize gross revenues of in developing a community of weavers that facility’s sustainability and viability. In social enterprise, as in making muscovado making, the right
P180,000 a month. Of this amount, P10,000 provide opportunities for women to participate in mix matters.
will go to the coconut farmers producing the economic activities, a market for the technology,
husks. and in enlisting investors that believe in the
product.
Juboken has a thorough understanding of the
coconut industry and its associated technologies. Today, Juboken is a small-sized enterprise of 25
It has strong links with cooperatives as suppliers employees with yearly revenues exceeding P12
and the government for technology endorsement million that directly benefit some 6,000 families.

42 43
 II. Building The Ecosystem: Technology Efficiency Attempts at Social Enterprise

Learning by Doing
Kabinnulig Para ti Panagdur-as ti Abra, Inc.

T
he Peace and Equity Foundation (PEF) is a in 2012 was expected to raise the levels of
learning organization on social enterprise production as well as to increase the income of
(SE). And what better way to learn SE, the sugarcane farmers in Abra.11 This facility PEF’s assistance was sought in rehabilitating • The plant design and facilities are inefficient,
than by doing SE? This is the story of the first SE is the first mechanized muscovado plant in the the plant and in ensuring the sustainability of making the muscovado processing costly. But
venture directly managed by PEF. area. its operations. The Abra Techno-Demo Farm is it can be modified with the right amount of
the first SE managed by PEF. The Foundation investment.
In behalf of one of its members, the Cordillera Sugar is not a major crop in Abra, but took over plant management and operations, • KAPPIA needed to further strengthen their
Network of Development NGOs (CORDNET), muscovado processing remains to be an assigned technical staff (i.e. an engineer and organization and source more sugarcane
a self-sustaining, pro-active, culture sensitive and important economic activity in the province a food technologist), and put in technological before they can be able to run the business.
technologically-equipped network working in given the absence of milling stations. Interest in improvements. Rather than the usual operations,
partnership with other stakeholders to facilitate this commodity started in 2012 from the Abra PEF took this chance to modify muscovado sugar Despite these setbacks, achievements have been
the continuing development of the Cordillera provincial government’s One Town-One Product processing practices and to try stretching known made. PEF standardized muscovado processing,
region,9 sought PEF’s assistance in rehabilitating (OTOP) program. However, the local industry standards as a model building initiative. tested food safety measures, improved equipment
a muscovado sugar processing plant in Abra that appeared static with farmers inclined to do efficiency, documented a quality muscovado
has not been operational for months. backyard muscovado cooking and relying on A traditional muscovado processing plant usually sugar recipe that is clean and sediment-free,
local public markets to sell it. has a master cook who is acknowledged as the produced a cubic meter of vinegar, acquired
The Kabinnulig Para ti Panagdur-as ti Abra, one who knows the secret behind good quality halal certification, and trained in Good
Inc. (KAPPIA) is a people’s organization that Under Sr. Celerina Zabala’s leadership, KAPPIA’s muscovado. As PEF would soon find out, the Manufacturing Practices. PEF is now ready to
mobilizes small development-oriented groups enterprises performed well. The eventual absence secret recipe varies according to the master share the knowledge with other SEs.
adapting suitable livelihoods technologies, of Sr. Celerina left a leadership vacuum that cook’s tantya or estimate. The Foundation tried to
upholding cultural beliefs, and practicing fair functionally debilitated the organization. The document this in quantifiable terms as reflected in By July 2016, PEF could turn-over the
trade. muscovado processing plant, the largest asset of the manual. management of the plant back to KAPPIA.
the organization, faced the threat of being pulled PEF made a commitment with CORDNET and
With assistance from the Japanese Embassy, out by the Japanese Embassy. There is a valuable While PEF was looking at ways to make the KAPPIA that once they are ready to continue
KAPPIA was able to build a muscovado lesson here: organizational strength includes the muscovado processing plant more efficient, managing the plant, the Foundation was willing
processing facility and purchase the necessary presence of well-trained second-tier leaders that CORDNET was helping KAPPIA prepare for the to invest further in remodeling the organizational
equipment such as cane crusher and cane juice are ready to take-over at any given time. eventual transfer of plant operations. During structure toward production efficiency. This, in
filtering system.10 The operation of this facility the implementation stage, important discoveries turn, translates to more income for community
surfaced. They are, as follows: members.
9 http://cordnet.org/about/ • There is not enough sugar cane in Abra to be
10 http://www.ph.emb-japan.go.jp/pressandspeech/press/pressreleases/2012/46.htm sourced and efficiently processed in the plant.
11 Ibid.

44 45
 Attempts at Social Enterprise

Fostering Sunrise Industries

Global Organic and Wellness Corporation

T
he ability to identify gaps in and respond to and registered it the following year to increase
the market is key to any enterprise’s success. the bargaining power of farmers versus traders
Global Organic and Wellness Corporation who had access to the market and, therefore,
(GlowCorp)—a marketing company set up controlled commodity prices. GlowCorp provides
by eight farmer groups—leveraged the health a steady market for its farmer members,
Lesson # 5:
benefits of commodities grown in the Philippines increases market share for organic products, and

Market to become a social enterprise (SE) competing

successfully in the global market for organic
promotes fair trade practices.

Competitiveness products. As a marketing entity, it needs to keep

abreast with the market trends of its community
GlowCorp also provides technical assistance
in market matching, quality control, organic
produce and position the product well to ensure certification, and packaging. Profits are given
continuous growth. back to shareholder-producers through dividends

E
arly markers of impact suggest that social enterprises (SEs) can create and expand both and technical support.
opportunities and risks for farmers, small entrepreneurs and other stakeholders as they Muscovado sugar producers, organic rice
engage with mainstream markets. Stronger support systems are needed to better monitor growers, and NGOs founded GlowCorp in 2009
and sustain benefits to households and communities. A marketing venture set up by the farmers
themselves not only freed producers from the shackles of traders controlling the prices for their
commodities, it was also able to tap new and nontraditional markets, which would have not been
reached by the usual commercial traders.

A cooperative in Mindanao which started in 1989 with 54 thousand pesos now has an asset base
of almost a hundred million pesos. While supporting 2, 5000 families, it has become the largest
cooperative in its province, and a leading manufacturer and seller of banana chips in the country. It
is a success story and like other success stories, it is constantly faced with challenges and setbacks
both internal and external. Since an SE has no or little control of external threats, this SE invested
heavily in improving organizational management and in firming up its marketing strategies taking
into account the various economic, social and political variables that affect the domestic and
import markets.

46 47
 II. Building The Ecosystem: Market Competitiveness Attempts at Social Enterprise

Organic rice and muscovado sugar are sunrise GlowCorp’s products are sold in over 300 retail GlowCorp’s structure and presence all over secured a credit line of P6 million from the Peace
industries. The global appetite for organic food outlets in supermarkets, groceries, and malls the country are to its advantage. Since its and Equity Foundation (PEF). Its goal then was
and drinks was estimated at US$40 billion in in key cities of the Philippines. Its distribution incorporators are producers, it has ready access to realize sales of P50 million, which proved to
2014.12 GlowCorp seeks to take advantage network includes SM Supermalls, the country’s to the supply of these commodities at competitive be too ambitious. GlowCorp has since revised its
of this market opportunity by helping small largest chain with 58 shopping malls nationwide. prices. In 2014, GlowCorp supported 2,500 targets, taking into consideration its capabilities
farmers upscale their production to develop In addition, GlowCorp sells muscovado sugar farming households, which helped the company and limitations.
new and non-traditional markets. GlowCorp to South Korea and organic rice to Hong Kong. generate sales of P47 million and a gross income
posted steady increases in its organic rice and GlowCorp has participated in international trade of P7.6 million. This SE aims to expand its areas of operation
muscovado sugar sales, from P1.3 million in its fairs in Dubai, Hong Kong, and Germany. to cover 6,500 farming households and double
first year of operation to P32 million in 2013. It GlowCorp knows its market very well. Its sales from P62.5 million in 2015 to P122 million
took only three years for GlowCorp to become organic products are sold in high-end markets by 2018. GlowCorp’s target is to increase
profitable. like Rustan’s and Metro Gaisano. GlowCorp income by 25 percent yearly. It also aims to
regularly taps experts to maintain high standards increase its market share of natural and organic
for organic production and monitors supply products from one to five percent. GlowCorp
12 http://orgprints.org/29790/19/sahota-biofach-2016-Global-OFD.pdf sources to ensure organic standards are met. seeks to develop new, non-traditional markets
for natural and organic products. With the
One constraint for GlowCorp is some of its ASEAN Economic Community now a reality,
suppliers and shareholders do not have organic GlowCorp intends to link with regional networks
certification. GlowCorp is teaching them on to cooperate with farmers from other ASEAN
the importance of the certification process and countries.
introducing them to the practice of the Internal
Control System for Organic Certification. Glowcorp needs to beef up its value chain. In
GlowCorp is still in the process of completing its terms of supply, the focus must be on ensuring
certification. quality of produce and acquiring certifications.
On its operations, Glowcorp should address
Marketing expertise is essential. In its first year gaps in efficiency, organizational capacity,
of operations, GlowCorp had low sales, but and knowledge of its market while looking at
sales eventually picked up with the guidance of the possibility of shifting to a more stable niche
marketing experts. market.

Lack of sufficient financing to support its growth

plans remains a challenge. In 2013, GlowCorp

48 49
 II. Building The Ecosystem: Market Competitiveness Attempts at Social Enterprise

Anticipating Economic/ As a result, it cannot lower its production costs

sufficiently for it to obtain bigger margins.

Market Shocks There are a lot of banana chips producers in

Magpet Agro-Industrial Resources Cooperative the Philippines; and with MAGIRCO’s current
capacity, the cooperative must choose to develop
either selling first fry banana chips in China,
or focus supplying domestically with second fry

N
banana chips. The cooperative eventually chose
ew market opportunities are opening— MAGIRCO buys up to 40 metric tons of bananas
the first option. Since they are producing largely
from lifting trade barriers to online daily from the local community, which includes
unsweetened banana chips that are further
market platforms developed every day. some 1,600 indigenous Manobos tending over
processed by their clients, the product carries a
The market is dynamic, and social enterprises 500 hectares of ancestral lands. The cooperative
different name/packaging and MAGIRCO has
(SEs) must always look at possible risks, and provides local employment by hiring banana
limited interaction with the end-consumers. It will have to look into all aspects of its internal
examine new trends and insights. SEs must peelers and paying them P100 to P600 a day.
continuously discover potential markets, update Collected banana peels are returned to their operations to ensure that it is compliant with all
MAGIRCO later worked on expanding its government regulations. Financial diligence is a
products, and upgrade processes that pass suppliers to be used as organic fertilizer for their
operations and manufacture of sweetened must. Weak internal systems and controls already
international standards. With these in mind, banana farms.
banana chips (second fry), which enjoy larger have resulted in tax delinquencies of almost P11
Magpet Agro-Industrial Resources Cooperative
demand domestically and globally in about million due to unremitted value-added taxes.
(MAGIRCO) is on the right track. MAGIRCO acquired government accreditations
30 countries, including the United States and
and is the only Hazard Analysis and Critical
countries of the European Union. Statistics from During the project lifetime, political and trade
MAGIRCO, an SE based in North Cotabato, Control Point (HACCP)-certified processing
the Department of Trade and Industry (DTI) show relations of the Philippines and China soured.
was organized in 1989 to help farmers get plant of fried banana chips in North Cotabato.
that the export value of banana chips has been China stopped importing products from the
better prices for their agricultural produce. The HACCP certification is a seal of quality.
increasing by 15 percent every year since 2009. Philippines, including MAGIRCO’s banana chips.
The cooperative consolidated local farmers’ MAGIRCO also is compliant with standards
produce and negotiated with buyers for volume- set by the Bureau of Food and Drugs, and the This proved that establishing the market is not
Expansion calls for financing support to acquire enough, equally important is maintaining it. And
based incentives and competitive prices. The Environmental Management Bureau (EMB).
new facilities and equipment. With Peace and that the risks in trade relations between countries
cooperative began by trading in copra and
Equity Foundation (PEF), MAGIRCO looked into are getting more and more significant in the
rubber and eventually expanded to wholesale Notwithstanding these advantages, MAGIRCO
its production and inventory management, as success or failure of a business that exports.
trading and banana chips manufacturing. The constantly faces constant operational and
well as pricing. With the guidance of engineers,
cooperative is in an area with soil suitable for business challenges, especially in maintaining
it was recommended that MAGIRCO redesign By strengthening itself as a viable SE, and
agriculture and weather that is conducive to the price-quality-volume combination that would
processes and mechanize its operations to by knowing how to adapt to the exigencies
growing bananas. MAGIRCO uses cardava allow it to be most profitable. Lack of operating
optimize efficiency. MAGIRCO also needed to of a fickle and volatile market, MAGICRO is
bananas, a variety that does not need intensive capital has prevented it from operating at
increase its manpower count to more than 300 savoring the fruits of its labor and investments.
maintenance. To date, it has 342 members, and optimum production levels, with operations
people to meet production demands. Success tastes like the sweetened banana chips it
its assets have grown from P54,000 in 1989 sometimes not exceeding 32 percent of the rated
to P99 million in 2013. It is now the leading capacity. It produces 10,000 to 15,000 kilos of produces.
cooperative in North Cotabato. banana fry, against its capacity of 40,000 kilos.

50 51
 Attempts at Social Enterprise

III. DEVELOPING THE

SUPPORT SYSTEMS Introduction

S
upport systems are formal and informal and practices and in evaluating proposals
networks of people, goods and services based on the governance, track record and
(e.g., financing, capacity building, competencies of the proponents and other
research) and organizations needed for an criteria.
organization’s sustainability, growth and capacity
to fulfill its goals. For the Peace and Equity Corollary to the strategy of scaling up SEs is
Foundations (PEF), support systems are essential financial sustainability by keeping the peso value
in the sustainability of its partners as well as of endowment fund intact, sufficient earnings
its own, and the viability and success of its to cover budget outlays and expenditures, and
programs and projects. streamlining guidelines and benchmarks for
disbursement.
Three interrelated components are discussed in
this chapter: human capital, financing, and risk Responsible risk-taking culture within PEF ensures
management. the prudent and strategic use of its endowment
fund. The proactive approach anticipates and
PEF promotes a culture of learning including plans for potential risks rather than merely
exposure to best practices, implements a team reacting to them; thus, the staff must be able to
approach to synergize expertise, and will identify spot signals of potential problems.
recruit from the business sector with expertise
in investments and enterprise solutions. These These support systems enable PEF to include
will augment the two core competencies of the more households in its value chain. Scaled-up
professional staff: adeptness in industry trends SEs translate to equity and inclusive development.

53
 III. Developing the Support Systems Attempts at Social Enterprise

Looking for the Right Talents

T
he Peace and Equity Foundation (PEF) interventions, and determining the development
invests in building the social enterprise (SE) outcomes for SE participants.
knowledge and skills of its professional
staff. The Foundation requires two core and The skills required of SE workers are varied
non-negotiable competencies from its staff and complex. When PEF refocused toward
members: recognizing specific industry practices SE promotion, it became difficult for its
and trends; and, properly evaluating proposals staff members to evolve into “nurturing an
submitted by groups seeking Foundation funding entrepreneurial culture, a culture that vigorously
and support. encourages innovation, thinking out of the box,
receptiveness to new ideas, proactively building
In terms of recognizing industry practices, prototypes with potential for success” (PEF 2012
Foundation staff members should become adept Annual Report). The Foundation was essentially like procurement of raw materials, inventory staff. This approach is expected to improve the
at finding geographic areas that produce the a grant-giving institution during its first decade management, financial management, sales, performance of PEF’s SE investments. PEF will
greatest volume of specific commodities. They of operations. The experience of most of its staff marketing, business planning, and risk recruit more staff members from the business
should have the skills to conduct a value-chain members came from working in organizations management. The Foundation will continue to tap sector as these new recruits can bring with
analysis by looking at every activity required to that provided grants and soft loans. the services of consultants and industry experts. them—and impart to existing staff members—
create a product or service and identifying ways It also will set up a program for expert volunteers skills, knowledge, and experiences in rigid
to increase the efficiency of the chain. They must In 2012, the PEF Board and management and talented interns. processes such as due diligence, structured
determine who the players are in each activity realized that no one staff possessed all the skills investments, and enterprise solutions.
of the chain and who gains the most among the required of a SE worker. Most staff members The Foundation has invested in staff development
players. They should also know what it takes to were strong either in business development or by exposing its professional staff to effective The Foundation is promoting a culture of learning
become a competitive player in the industry. in social development, but not necessarily in SE models in the Philippines and abroad. Staff among its workers to inculcate the appreciation
both. As a stopgap measure, the Foundation members also learned best practices in social and understanding that learning happens all the
In evaluating proposals submitted to PEF, staff commissioned consultants—individuals and impact investment from knowledge leaders and time and education is a continuing process. This
members are guided by a set of criteria that organizations—to provide highly technical practitioners. encourages staff members to approach daily
includes governance, competencies of the project services needed to build SEs. work activities with the intention of learning
leaders in running the enterprise, enterprise Looking forward, the Foundation will implement something constructive. This creates synergy
performance, and future prospects. The desired Some of the consultants were experts in specific a team approach in conducting appraisal, and a multiplier effect as individual learning is
skills set for staff members includes experience industries such as coconut, coffee, cacao, cane project implementation, and monitoring and channeled into organizational learning through
in analyzing financial reports and projections, sugar, Islamic financing, and basic services evaluation of the SE projects it assists. This coaching by supervisors and experts, customized
spotting strengths and weaknesses of the like health and water. Other consultants were approach will maximize strengths and minimize training, and use of performance tools that
applicant enterprise, recommending appropriate practitioners in specific business operations weaknesses of the Foundation’s professional encapsulate lessons and best practices.

54 55
 III. Developing the Support Systems Attempts at Social Enterprise

Financing the Strategy Tactical Moves to Implement the

Financial Strategy
• Engaging the services of six to seven fund
managers to manage the available for sale

D
uring the second half of 2010, the first are sufficient to fund the annual budgeted financial assets spreads the risk of imprudent
decade of operations of the Peace and outlays and actual expenditures including management of the funds. Fund managers
Equity Foundation (PEF), an independent contingencies and the three percent provision refer to subsidiaries or units of financial
group conducted a comprehensive evaluation for inflation; and, institutions and are selected after passing
of the Foundation’s strategies, programs, and • To agree on certain guidelines and benchmarks a rigid screening process. Performance
projects. Part of the evaluation process included in disbursing investments in social enterprises evaluation of each fund manager is done
recommendations on the future role that PEF as well as expenses for management and annually.
will play during its second decade. After administration. • Allocating a portion of the Endowment Fund Implementing the financial strategy for the past
careful deliberation, the Board decided to focus to long-term equity investments in local five years proved to be effective in generating
on promoting social enterprises (SEs) as the companies. Such investments are made, sufficient resources required by the SE strategy.
Foundation’s core interest and strategy for the Learning and Insights monitored, and managed by the FinCom using The annual average of the return on investment
period 2011 to 2020. Over the Five-year Period a set of criteria and benchmarks. (ROI) is 7.93 percent or P793.57 million over the
• Discussions among members of the FinCom five-year period that ended 2015.
While the Board members were excited about Strategic Actions on the short and medium term behavior of the
implementing the first phase of the SE strategy • Clear and simple articulation of the financial markets provide a basis to review and In the next five years, the FinCom will undertake
covering the five-year period 2011-2015, they objectives of the financial strategy convinced revise the portfolio mix to conform to changes a diversified mix of portfolio that will generate
were also anxious to find out if sufficient funds management and staff that these objectives are in the markets. sustainable revenues over a long-term horizon.
would be available to implement the strategy. measurable and doable. • Periodic review of investments in individual Earnings will not just come from one group
The Board tasked the Finance and Investments • Setting benchmarks and guidelines in the equities was conducted to ensure a proper of securities but will be composed of various
Committee (FinCom) to determine whether the disbursement of funds for projects, programs, balance of investments in different sectors sources: available for sale financial securities
Foundation’s present and future resources could and administrative expenses encouraged of the economy represented in the stock (equities, fixed-income securities and preferred
generate the funds required to implement the people to be prudent and strategic in the use of market such as: property, holding companies, shares), local and foreign long-term hold equity
strategy. resources. consumer, industrial, etc. investments, and real estate investments.
• Engagement of financial experts as members • Limiting investments in multi-year bonds by
The FinCom set out the following objectives to of the FinCom provided the Foundation with fund managers to a maximum of five-year As PEF Executive Director, Roberto Calingo,
form part of the financial strategy: invaluable knowledge and perspectives duration reduces the risks of extreme volatility explained, “Given its considerable endowment
• To keep the peso value of the Endowment on financial markets. Good relationships in interest rates. fund, PEF can and should sustain itself as a
Fund (or Restricted Fund) intact; a provision of with leaders of the investment and banking • Requiring fund managers to provide regular vibrant, dynamic and responsive partner in the
percent on the beginning value of the Fund is community in the country allowed members reviews and their forecasts of market and long-term precisely given the nature of poverty
to be appropriated annually from earnings to of the FinCom to be well-informed about economic conditions in the short and medium as a long term concern. Any problem cannot be
cover inflation; conditions in the local and global financial term is useful in formulating changes in solved if that problem’s lifespan is longer than the
• To ensure that earnings from investments markets. the portfolio mix and currency mix of the means by which it can be solved.”
investments.

56 57
 III. Developing the Support Systems Attempts at Social Enterprise

Embedding Risk Management

T
RISK MANAGEMENT

he Peace and Equity Foundation (PEF) organization: setting strategy, action plans, address it. During the harvest season, pole MANAGE

has been carrying out enterprise risk governance, stakeholder communications, and vaulting occurred and the SE suffered loses but
IDENTIFY

management (ERM) policies and practices measuring results. these were minimized ASSESS

since 2012. With inputs from the Institute of

Internal Auditors Philippines, PEF developed an It is preferable and beneficial for the Foundation From PEF’s experience, an effective ERM
integrated ERM framework to ensure that risks to anticipate and plan for potential risks, instead subscribes to the principle of the “tone at the
are managed consistently to achieve its vision, of merely reacting to unexpected events.  Among top” or leadership by example. This refers to
mission and preserve its values. The framework the principal tools PEF uses is its Risk Register, “management’s leadership and commitment
ensures a responsible risk-taking culture within derived from a list of the most important external toward openness, honesty, integrity, and ethical
the organization. and internal risks facing the organization. behavior. It is the most important component
The register serves as a master document that of the control environment. The tone at the top
The Foundation’s ERM includes the identification, helps PEF track issues and address problems is set by all levels of management and has a
assessment, handling, overseeing, and control as they arise. PEF orients all staff members on trickle-down effect. If the tone set by management
of events and situations to avert or lessen the its ERM framework through a yearlong series upholds honesty, integrity and ethics, employees
effect of potential uncertainties in achieving the of trainings and workshops. Annual unit plans are more likely to uphold those same values.”13
A PEF social enterprise (SE) partner, Multi-
organization’s missions and objectives. ERM clearly state risks and identify controls.
Sectoral Alliance for Development (MUAD)-
also provides some guiding principles for the Also important are the defined roles and
Negros, underwent a two-day capacity
Foundation’s board and management in charting Within PEF, ERM is an on-going process of responsibilities of the Board that has the ultimate
development intervention on enterprise risk
the course of PEF. identifying, monitoring, and reporting risks to responsibility, the presence of approved policies,
management (ERM) to establish and sustain
assess and improve the partner-organization’s guidelines and procedures, a focal risk person or
ERM within MUAD.
The strategic focus on the promotion of social performance.  Partnering risk is a leading a risk champion, and an independent assessor.
enterprises (SEs) brings in risks that are new concern for PEF and one way to respond to this It needs strong leadership support in shaping
MUAD participants got an overview of ERM
for PEF; therefore, the management decided to challenge is by cascading ERM to the partners. the mindset and risk-aware culture of PEF. ERM
and how it should be integrated in their
embed ERM at the institutional level. Decisions to ERM must be present in both PEF and its is included in the performance competence
plans and its social enterprise business
do fewer but high-impact projects, considering partners. assessment of the staff and is adequately
model.
climate change effects on crops, and monitoring considered in every activity PEF undertakes.
trade policies are some of the ways for PEF to Four SE partners underwent comprehensive
At the end of the workshop, MUAD
mitigate risks. ERM training for their board, management and ERM is the proverbial ounce of prevention that is
identified the top ten risks, established
staff. One SE partner in sugarcane production better than a pound of cure.
the appropriate risk appetite and tolerance
PEF deals with risks across the organization, identified pole vaulting, or trading outside the
level to achieve the project objectives of
from senior management down to fieldwork contract between farmer and cooperative, as
increased farmers’ income, education of
staff member; and looks at all facets of the a potential risk and it made plans to properly
farmers, and protection of croplands.
13 https://internalaudit.boisestate.edu/internalcontroltone/

58 59
 Attempts at Social Enterprise

TOTAL APPROVED
PROJECTS P 840M

SE
PORTFOLIO
P 572M
2011-2015

Quick Facts
and Figures 2011-2015

840 million total portfolio

572 million SE portfolio
412 total projects
179 SE partners
111 thousand households
20 SE managers trained

61
 Attempts at Social Enterprise

I
n 2015, the Foundation began the process of putting together a re-calibrated
strategic plan that is grounded on what we have learned in our first attempt of
THE NEXT CYCLE nurturing social enterprises.

Scaling-up For the next cycle, we will:

• SHARPEN our focus through six key actions that will scale up SEs

Social Enterprises
not only on C5, but also on basic social services and culturally-
inclusive financing. We will leverage with social investors to meet the
increasing investment requirements; level up the business management
acumen of partners; and improve our internal systems, processes, and
competencies.

• ENHANCE our pipeline development process by tightening due

diligence requirements to ensure that enterprise proposals pass
the criteria that will lead to long-term impact. We will include risk
assessment to understand the enterprise operations and to identify
capacity gaps.

• DIVERSIFY our investments of the Endowment Fund to generate

sustainable revenues to support our programs over a long-term horizon
and manage downturns. Largely relying on investments in stocks and
bonds that are subject to volatilities and uncertainties may prove to be
far riskier now.

PEF has three distinct but mutually reinforcing implementing structures to achieve
this goal – the Foundation itself as the primary gateway for organizations
moving into SE; the PE Holdings company as investor in for-profit organizations
whose SE ventures are matured to achieve scale; and the SE Institute for capacity
building to make the enterprise and entrepreneurs investor-ready.

63
Revisiting Our First
SE Communities
 Attempts at Social Enterprise

Introduction

T
he Peace and Equity Foundation (PEF) The analysis used data about the SE and its host
builds and scales up social enterprises community obtained from reports, focus group
(SEs) as its strategy to enable poor discussions (FGDs), and key informant interviews
households to become self-sustaining. Through together with data from the household survey
financing, capacity building, technology of beneficiaries and non-beneficiaries of the ten
development, establishing linkages, enhancing selected SE partners. The midterm household
market competitiveness and other appropriate survey of November 2015 is a follow-up on the
interventions, PEF supports and enables specific baseline household survey conducted in 2012.
projects of its SE partners to generate benefits
AN INTEG RAT E D A N A LY S I S O F T H E 10 SO CIA L ENT ERPRISES for individuals, households and communities. This integrated analysis is being undertaken to

Midterm/Endline
The benefits include increased sales, revenues, better understand PEF’s strategy and achieve
income and assets; and better access to basic two objectives: (1) to provide inputs to program
services like water. They may spill over to implementation1 and (2) to produce an overall

Impact Assessment Studies non-beneficiary households and the larger

community.
evaluation of PEF’s work in facilitating poverty
reduction. An Independent Review Board,
composed of experts with extensive experience
This part presents the results of a study that links and expertise in designing and conducting
enterprise-level information with household-level impact assessment studies with specific focus on
and community-level information to determine poverty measurement and poverty alleviation,
whether PEF resources were utilized efficiently provided overall technical guidance on the study
to meet the goals and targets of selected SE design and procedure. The advisers also made
programs and projects. It ascertains if and recommendations on how outcomes are to be
how PEF-supported interventions enabled SE analyzed and the statistical methods to be used.
partners to produce the desired and promised
outcomes of the projects, bring about change The analysis for Batch 1 was completed in March
to key outcomes for households; and generate 2016 and consists of four SE partners and their
community or spillover effects. The analysis is project—one is a non-government organization
two-pronged, one on the specific SE, and the (NGO) while the three others are cooperatives.
other on PEF. The analysis for Batch 2 was completed only in

1 This can consist of recommendations that pertain to project focus, type of intervention, suggested indicators to be measured and monitored, specific
policies and steps that PEF and/or its partner organizations may execute to achieve the end-of-project objectives.

67
 Revisiting Our First SE Communities Attempts at Social Enterprise

The analysis does not include the information PEF supported Dancalan Ilog Waterworks PEF extended financial support to Southern
Independent Review Board
on how the SEs were managed and the current and Agro-Industrial Multi-Purpose Partners and Fair Trade Center (SPFTC)
EMMANUEL DE DIOS, PhD
status of these SEs. Taking off from the results Cooperative (DIWAGRIMPCO) in the to conduct trainings in ten farming communities
University of the Philippines (UP)
School of Economics of the impact study, PEF shall look at what rehabilitation and extension of its three-kilometer targeting around 480 households. The training
happened to the SEs to address this particular pipeline and in improving the distribution covered fair trade, organic farming practices,
MILWIDA GUEVARA, PhD
gap. efficiency of its water supply system. This high quality desiccated coconut practices,
Synergeia
sustained the cooperative’s supply of potable and coconut charcoal processing. SPFTC also
LEONARDO LANZONA, PhD The ten social enterprise partners are: NATRIPAL, water to households and commercial ventures in provided grants to farmers to acquire equipment
Ateneo de Manila University (ADMU) MAGIRCO, LMPC, DIWAGRIMPCO, MUAD, three barangays in the municipality of Ilog. and supplies needed to pass certification
LORELEI MENDOZA, PhD PARFUND, INSOL, SPFTC, SUBASTA and ADFI. requirements.
UP Baguio School of Economics PEF enabled the Multi-Sectoral Alliance for
MARY RACELIS, PhD PEF’s support to Nagkakaisang Tribu Development-Negros (MUAD) to utilize its PEF helped the SUBASTA Integrated
Institute of Philippine Culture, ADMU ng Palawan (NATRIPAL) made its honey 15-hectare land in Calatrava, Negros Occidental Farmers Multi-Purpose Cooperative
DANILO SONGCO enterprise more competitive and sustainable. to establish a high-quality goat breeding center (SUBASTA) supply 12 metric tons of fermented
PinoyME Foundation This was important since 92 percent of to complement the existing native goat-raising cacao to Askinosie Chocolates, an American
NATRIPAL’s 2011 income came from honey livelihood of the farmers in the area. company, which eventually became its client.
production and NATRIPAL was the sole buyer for
January 2017 and includes six SE partners and 79 percent of its supplier-beneficiaries. PEF supported the Philippine Agrarian PEF’s loan to the Antique Development
their projects. Of these six partners, five are Reform Foundation for National Foundation Inc. (ADFI) financed the
NGOs, and one is a cooperative. PEF’s assistance to Magpet Agro-Industrial Development (PARFUND) to start the purchase order of SM Kultura to pay the weaver
Resources Cooperative (MAGIRCO) Integrated Rice Duck Farming System (IRDFS) in beneficiaries on time pending payment from SM;
This study is divided into three parts: (1) enabled it to purchase more bananas from North Agusan del Sur and establish key partnerships thus, ensuring continued supply and incentivizing
Introduction, (2) The Social Enterprises, Their Cotabato farmers. It improved MAGIRCO’s with consolidators as markets for IRDFS products the weavers. By 2014, Ayala Foundation
Projects and the Outcomes, and (3) Conclusions operational efficiency, particularly the use of like organic rice, duck meat and duck eggs. replaced SM Kultura as ADFI’s market.
& Recommendations. The first part is a brief energy and the adoption of a more efficient Unfortunately, some farmers abandoned the rice-
description of PEF’s assistance to the ten SEs. frying method. Currently, PEF is supporting duck technology after the project sustained heavy The assistance provided to PEF’s SE partners
The second part, the main body of this book, research and development efforts for second- damage from Typhoon Seniang and later by the varied in amounts and types, i.e., financing,
is a narrative of how it was utilized, what fry banana chips production and marketing, dry spell of El Niño. technology, capacity building, etc., depending
interventions were made, the project context, including exportation. on specific project needs and demands. In many
the envisioned transformation in households PEF support for the Innovative Solutions cases, the assistance provided by PEF was in the
and communities, and a comparative analysis With PEF support, the Laua-an Multi- Development Foundation (INSOL) form of financing. The various types of assistance
of the baseline and midterm conditions. Purpose Cooperative (LMPC) became enabled it to serve its clients who engaged in are as follows:
The last part answers the fundamental question if the nucleus of the local muscovado processing retail trading, with a few involved in agriculture-
and how PEF’s SE programs helped households and trading industry, and was able to widen related businesses. INSOL provided loans Financing: PEF provided NATRIPAL,
and communities realize sustainable incomes, its network. Its strategic position as producer of to at least 265 enterprises. The loans were MAGIRCO, LMPC, SUBASTA and ADFI loans for
productive assets, access to essential services, sediment-free muscovado sugar opened its entry used for equipment upgrade, the purchase of the purchase of more products from communities
and resiliency. to export markets like South Korea. additional raw materials, and the improvement of to meet order requirements. PEF’s credit line
operations.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

served the financial needs of INSOL’s micro-

entrepreneurs, and the rehabilitation and
competitive; and PARFUND was able to produce
and market new products like duck egg and duck The 10 Social Enterprise,
extension of the DIWAGRIMPCO pipeline.
Their Projects and the Outcomes
meat.

Technology: PEF provided technical assistance Linkages: LMPC gained an additional market,
that identified system problems and increased South Korea, through its linkage with SPFTC that,

T
operational efficiency including the acquisition of in turn, had increased the markets for desiccated
his section is a detailed explanation of the assistance provided by the Peace and Equity
equipment like MAGIRCO’s electronic truck scale, coconut and coconut charcoal in Cebu.
Foundation (PEF) to its social enterprise (SE) partners and how it was utilized during the period of
and DIWAGRIMPCO’s flow meters and testers.
the study. The SE projects are summarized with the project context including a brief background
PEF introduced the IRDFS rice-duck farming and Capacity Building: PEF enabled partners to
on the proponent and when available, the external variables affecting the project; the theory of change
high-quality hybrid goat breeding and improved formulate their organizational plans, identify
or an understanding of how the project when pursued will lead to key outcomes for the SE; a profile
SPFTC’s plant capacity. enterprise risks, and train their key personnel
of the beneficiary households of the SE’s project and the communities affected; and, a comparative
through mentoring activities (i.e., MAGIRCO,
analysis of the baseline and midterm conditions for the SE, on one hand, and the households and the
Market competitiveness: With PEF PARFUND, LMPC). It supported the training
community, on the other.
supported research, the crisis of MAGIRCO’s of NATRIPAL members on proper procedures
decreasing sales to China, its major market for to gather honey of better quality SPFTC village
first fry banana chips, became its opportunity processors and farmers in fair trade practices
to venture into second fry or sweetened banana and organic practices that led to organic ICONS LEGEND
chips production that was in demand in the certification; MUAD farmers on goat breeding;
United States and Europe. LMPC’s improved and PARFUND farmers for the rice-duck IRDFS
packaging of its Pahinis product made it more technology.

HNOLOG
C
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T

CITY A
PA
N
A
C

F
E

FI
C IE N C ARKET PEF Interventions Theory of Change Comparison of Comparison of
M
Baseline and Baseline and
T
S

RU
CTU
R Midterm Conditions Midterm Conditions
SS

SOCIAL ENTERPRISE
CO

of the Social of the Households

E

P
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Enterprise and Community
ECOSYSTEM
ETI E
TI V

DUSTRY O P RIA
IN PR T
P
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N F
ET K IN G
WOR A N CIN

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 Revisiting Our First SE Communities Attempts at Social Enterprise

In 2012, PEF extended a grant to address NATRIPEL’s purchasing constraints

and sustain its wild honey business. PEF provided NATRIPAL an initial credit
NATRIPAL line of P500,000 and an additional P500,000 in 2015 for the purchase of
1 Wild Honey more wild honey.

A grant was used to train 255 (out of a target of 360) honey gatherers,

N
agkakaisang Tribu ng Palawan for 92 percent of its total income in 2011 (PEF, PEF Interventions processors and buyers living in ten out of twelve communities (Gayosa,
(NATRIPAL) was established in 1989 2012). However, certain aspects of the enterprise 2015).5 The syllabus included proper honey harvesting techniques and
to address the problems of cultural needed improvement. NATRIPAL’s policies on environmentally sound and sanitary wild honey
integrity, tenurial security, economic exploitation gathering. More information about the honey gatherers was obtained and
and environmental abuse in indigenous people’s A Memorandum of Understanding (MOU) potential honey sources were mapped out during the training.
communities or IPCs (NATRIPAL, n.d).2 Its social between the National Commission on
entrepreneurship arm, Operasyon Negosyo Indigenous Peoples (NCIP) and PEF resulted
Natripal, supports the IPC-based economic in the identification and development of IPCs’ NATRIPAL’s purchase of significantly greater quantities of good quality wild
activities in Palawan that utilize non-timber forest enterprises (NATRIPAL was eventually selected honey can contribute to its own competitiveness and sustainability, and
products. NATRIPAL also undertakes activities that among the enterprises) that sustainably use improve incomes of IPC households and the community in general.
contribute to the goals of IP rights recognition the resources found in their ancestral domain. The higher prices offered by NATRIPAL will also attract more indigenous
and the protection of ancestral domains in According to the initial assessment, NATRIPAL people (IP) selling to it, thus increasing the number of beneficiaries.
cooperation with local government and the was unable to buy the entire quantity of honey For every kilogram of honey traded, P1.5 goes to NATRIPAL funds.
Theory of Change
private sector.3 gathered as it lacked working capital. Thus,
honey gatherers were also forced to sell to
Wild honey gathering and trading is NATRIPAL’s traders whose prices are lower than NATRIPAL’s NATRIPAL served three of the seven tribal groups in Palawan and purchased
major livelihood activity since 1996 accounting by about P200 per container.4 honey only from gatherers who underwent its training, and observed the
proper honey gathering procedures. Cash payment was given immediately
but if NATRIPAL was short on cash, the payment was delayed and would be
given to gatherers once honey gathered was sold. NATRIPAL’s certification
of authenticity differentiated its product and firmed up its niche in the
Comparison of market. Its market included Echostore and the province of Antique.
Baseline and Midterm Improved technology and packaging, standardized sanitary process,
Conditions of the Social
enhanced product prices and expanded markets were the industry changes
Enterprise
introduced by NATRIPAL.

2 Nagkakaisang Tribo ng Palawan (n.d). Retrieved from http://ip-led.ph/natripal in 28 February 2016

3 National government agencies include NCIP, Department of Trade and Industry (DTI), and Department of Science and Technology (DOST). Katutubong
Samahan sa Pilipinas, Inc. (KASAPI), Palawan Council for Sustainable Development (PCSD), Episcopal Commission on Indigenous Peoples (ECIP), Non-
Timber Forest Products-Exchange Programme and Task Force (NTFP-EP / TF), Legal Assistance Center for Indigenous Filipinos (PANLIPI), Palawan NGO
5 Gayosa, A. (2015). Working with IPs (Evaluation of Peace and Equity Foundation’s Projects with Four Indigenous
Network, Inc. (PNNI), and Anthropology Watch (AnthroWatch) are from the private sector.
People’s Organizations from 2012 to 2015 (Draft paper commissioned by PEF).
4 Peace and Equity Foundation (Natripal Initial Project Outline) (2012).

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 Revisiting Our First SE Communities Attempts at Social Enterprise

Between 2012 and 2015, NATRIPAL increased the purchasing price of In the barangay, income generating activities were in agriculture, fishery
honey per kilogram by P20 for Class A and P10 for Class B. In 2013, equal and commerce. Honey gathering and handicraft producing IP households
quantities (50 percent each) of Class A and Class B were bought.6 Classes received regular income because of a ready market in traditional outlets and
were determined according to moisture content, as follows: Class A (24-25 NATRIPAL. However, there was the perception that NATRIPAL’s marketing
percent), Class B (27-28 percent) and Class C (29 percent and above). effort had little value added as households claimed that they could find
better markets themselves.
There was an increase in the total volume of honey purchased, especially Comparison of Baseline
in 2013, possibly facilitated by PEF’s credit line. The SE obtained a positive and Midterm Conditions Basic social services like basic education and health (i.e., Philhealth
of the Households and
net income of P115,000 in 2013 compared to a net loss of P390,000 in Community
membership) as well as in public works (electricity and water) were
2012.7 In 2014, the SE’s net income doubled to P286,000. Hence, there available through government supported programs. However, IP households
was an improvement in the SE’s financial position between the baseline and did not adequately avail of such services because of low awareness and
the midterm. little understanding of the mechanics of such programs.

NATRIPAL probably had an oversupply of stock honey because of the limited NATRIPAL’S beneficiaries at the community level were honey gatherers or
number of buyers and this might partly hinder the SE from expanding harvesters, consolidators tasked to store the honey and deliver it in bulk
and serving more IP communities. It could venture into other activities like to NATRIPAL for processing, and IP associations tapped to organize the
collecting of wax to make candles. There were also related risks such as communities involved. More than 80 percent of beneficiary households
the hazards in honey gathering; poaching and uncontrolled gathering of belonged to the Tagbanua tribal group.
wild honey by people outside the IPCs; and competition from unscrupulous
traders and peddlers who sold regular honey as wild honey. These During the baseline study period, the poverty incidence among NATRIPAL’s
unregulated activities affected the price and the market of the IPs’ wild beneficiary households was 71 percent (for n=253) with an average
honey. monthly income of P2,776. Among adult members, 69 percent had primary
education only while five percent did not have any formal schooling. In
PEF has offered to help NATRIPAL obtain its Food and Drug Administration 2012, 84 percent of households had forestry-related livelihoods with honey
(FDA) certification so it can enter new markets. However, NATRIPAL (47 percent), almaciga wood (18 percent) and rattan (18 percent) as the
needs to improve its processing plant and update its local permits and its top products. Wild honey gathering might not be the primary income source
registration with the Securities and Exchange Commission (SEC). among IP households but the practice was an integral part of their cultural
heritage. The community needed livelihood assistance (e.g., training with
fund support) and there was an increasing demand for handicrafts-making
as an alternative to honey gathering.

From 2012 to 2015, there was a notable increase in the number of

community members supplying honey to NATRIPAL from 86 to 159;
6 Data file containing quality of honey bought for 2012 and 2014 was corrupted. NATRIPAL is trying to recover it
as of this writing.
and also an increase in the average honey sales per annum among the
7 The SE’s poor performance in 2012 can be attributed to inadequate blooms for the bees because of the climate beneficiary households from P2,420 to P5,960. The total income of the
situation, e.g., too much rain caused little foliage for the bees and less honey was produced. Although the PEF beneficiaries also increased from P2,776 in 2012 to P6,500 in 2015.
credit line was already approved in 2012 it was only availed of in 2013 by NATRIPAL. This points to a natural
variability in the honey production cycle.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

The community’s primary concern was poor road conditions making market
access difficult and costly. A Cardbank-LGU motorcycle project attempted
to address the need for transportation and there is also an on-going MAGIRCO
construction of a farm-to-market road. 2 Banana Chips

According to beneficiaries, the presence of NATRIPAL provided them a

T
regular market for their honey harvests much better when honey was either he Magpet Agro-Industrial Resources Cooperative (MAGIRCO) started with rubber trading
sold to traders at a lower cost or ended up as spoilage caused by the in 1989. Later, it ventured into copra trading since coconut is a main crop in Magpet and its
absence of buyers. neighboring towns in North Cotabato. In 2009, MAGIRCO commenced its banana chips
production after it obtained a loan from the Department of Agriculture (DA) for its production building
Beneficiaries said that they appreciated the training NATRIPAL provided and facilities.
them.8 By the midterm, 50 percent of beneficiaries (n=222) claimed that
their knowledge and skills improved while 47 percent claimed no difference
in their knowledge and skills level. People also cited certain aspects that
In 2012, PEF approved a P3 million credit line to MAGIRCO as working
were opposed to their traditional knowledge and practices. For example,
capital for the purchase of more bananas from the community. PEF also
gloves used for sanitary purposes were useless since they just get torn in
assisted in the technological assessment of the plant’s energy and oil use to
the process of getting honeycombs. Also, gatherers did not heed the advice
make operations more efficient. PEF provided funding for the acquisition
of taking a bath prior to harvesting since the scent of soap would attract
of an electronic truck scale and capability building to strengthen the
a swarm of bees; endangering their lives and wellbeing. They, however,
management of the enterprise. More recently, PEF provided support to
agreed that the harvesters should use plastic bags and containers to carry
PEF Interventions MAGIRCO for the development of its second-fry production. This shift from
the produce, and avoid squeezing the honeycomb to prevent contamination.
first fry banana chip production to second-fry (sweetened) banana chips
production was envisioned as MAGIRCO’s way to access new markets since
The IPs considered the government’s banning of the kaingin or slash-
the latter was in demand in the United States and Europe.
and-burn system of farming as harmful to their culture. They need to be
convinced of the environmental hazards caused by kaingin and flashfloods
so they would not revert to this practice.
The financing for working capital will aid MAGIRCO in absorbing
more banana products from farmers. As the SE expands, farmers and
consolidators will have a steady market for their banana harvests.
The employment of plant workers, mostly women coming from farming
communities of the Manobo tribe, will continue. Benefits may also be
in the form of patronage refund9 for its members.
Theory of Change

9 Patronage refund is the term for how co-ops send profits back to their owners. Essentially, each owner gets back
8 University of San Carlos - CSRE (2014). Community Baseline Study (Commissioned by PEF). part of the profit from their own purchases (http://www.viroquafood.coop/you-own-it/patronage-refunds)

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 Revisiting Our First SE Communities Attempts at Social Enterprise

Aside from PEF, MAGIRCO had a network for financing which included the formal education at all. Seventy percent of working members are found in
Philippine National Bank (PNB) and the Land Bank of the Philippines (LBP), agriculture, forestry-related enterprise or fishery with banana (27 percent),
and for capacity building assistance and technology development including tahiti (28 percent), and rubber (17percent) as the common commodities.
the DA and the Department of Trade and Industry (DTI). Establishing market
linkages was its major challenge since Koki Foods and PEF were its only Only three percent of households had access to electricity and almost all
outlets. Given this value chain, PEF’s support to MAGIRCO was invaluable. households (99 percent) use firewood as their main source of fuel; thus,
Comparison of further straining forest resources. Income and non-income indicators clearly
Baseline and Midterm The value of sales and purchases progressively increased since 2011 with illustrated the poverty situation. Access to education had been attributed
Conditions of the Social
Enterprise
an average of 4.6 tons of bananas per year. Net profit almost tripled by community members to the government’s 4Ps Program. Landlessness
from 2011 to 2013 (P302,000, P812,000 and P467,000 for 2011, 2012 remained a major community issue.
and 2013, respectively) until it plunged to P258,000 in 2014. Majority of
MAGIRCO’s first fry banana chips product went to China and the political Having a market for a primary commodity was MAGIRCO’s contribution to
tensions between China and the Philippines led to the dramatic decrease in the community. According to FGD participants, at the beginning, MAGIRCO
China’s buying volume. bought bananas at a higher price than traders who sold their produce to
Davao-based banana corporations. MAGIRCO set a higher price to entice
Meanwhile, after MAGIRCO requested for support during the Accelerating farmers to sell to them; it bought from both its members and non-members.
Capacity of Enterprise (ACE) Program in 2014, a loan was approved for
the research and development component of their second fry production. Because of dwindling profits, MAGIRCO had to reduce its buying price of
A full-time food technologist was hired to oversee the production and guide bananas from ten pesos per kilogram in 2013 to six pesos per kilogram
the shift to second fry. A PEF-hired engineer introduced technological in 2014 because of dwindling profits. This was still higher than the 2012
improvements by assessing the plant’s operations and processes. Upon her buying price of four pesos per kilogram. Two things were observed: other
recommendation, a conveyor to load rice hull to the burner was installed. traders increased their buying prices and a midterm reduction in the number
PEF also funded the acquisition of an electronic truck scale; thus, freeing of suppliers and plant workers.
workers from having to manually weigh bananas or the need for contracting
out this service. These resulted in significant savings in time, manpower and The distribution of patronage refund in 2014 amounted to P61,000 lower
money. than the previous year’s P18,600.

Non-beneficiaries from the midterm survey did not participate in

Eighty three percent of MAGIRCO’s beneficiary households had incomes MAGIRCO’s banana project because they were not aware of it (48 percent).
below the poverty threshold, which was even higher than that of non- In the community baseline study, FGD participants said that there was
beneficiaries (72 percent). This was also the highest poverty incidence no incentive in a MAGIRCO membership since the cooperative bought
registered in PEF’s 2012 baseline study.10 Total monthly household income from non-members as well. For members, this hindered them from taking
for baseline beneficiaries was P2,748. Sixty seven percent of adults advantage of the highest offer.
finished only elementary education while 11 percent did not receive any
Comparison of Baseline
and Midterm Conditions For beneficiaries, their total income increased from P2,748 in 2012
of the Households and to P8,489 in 2015. Moreover, 30 percent claimed that their financial
Community 10 The data for the other SEs are as follows – NAPTRIPAL (71%); SPFTC (53%); PARFUND (40%); ADF (39%); MUAD
(38%); LMPC (32%); DIWAGRIMPCO (27%); SUBASTA (22%); and INSOL (5%)

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 Revisiting Our First SE Communities Attempts at Social Enterprise

condition improved after being part of the MAGIRCO project while 31 The Peace and Equity Foundation (PEF) extended a loan of P400,000 to
percent asserted there was no change. At the household level, production develop and produce the new and improved Pahinis design for packaging
capacity was not maximized due to a lack of capital for farmers to expand muscovado sugar in 2012. Another assistance to LMPC was a P4 million
production during the period of rising banana prices. In addition, farmers credit line granted in the same year to finance a regular purchase order
experienced problems with pests. Manobo farmers harvested 100 it got from Alter Trade, an exporter in Negros Occidental. PEF also linked
kilograms of bananas every 15 days and secondary data revealed that LMPC to its other partners, SPFTC in Cebu and Glow Corp in Manila that
coconut was their main produce and this was intercropped with bananas or PEF Interventions marketed different agricultural products.
rubber.
PEF funded mentoring roll-outs and planning sessions to identify problems
Aside from increased income, household beneficiaries accessed health in meeting project deliverables, and craft strategies to improve plant
services through MAGIRCO, but these services excluded nonmembers. operations, organizational management, and financial reporting.
MAGIRCO strengthened its community relations by providing access to A technological pre-assessment was also conducted to make LMPC more
health services in partnership with the Free Masons Lodge. It also undertook fuel efficient when producing sugar.
some environmental activities like tree planting.

PEF’s support will enable LMPC to buy more muscovado sugar from the
farmers. This translates to the following: increased sales and profitability
of LMPC, widened base of suppliers from amongst sugarcane farmers,
sustained employment of workers, bigger profits for farmers and
consolidators, dividends earned by regular members, maximized and more
LAUA-AN MPC
3 Muscovado Sugar Theory of Change
efficient operations.

LMPC was in a strategic position to help poor households and communities

L
ocated in Antique, the Laua-An Multi-Purpose establishing a muscovado plant in 2009 with in Antique through its processing and trading of sediment-free muscovado
Cooperative (LMPC) was established in 1990 a production capacity of 60 tons per month of sugar. It had a strong supply base from sugarcane farmers in nearly a
to provide different kinds of services including sediment-free muscovado sugar. With insufficient third of Antique’s municipalities. It had a reliable network of eight different
savings and credit; and to trade different capital to purchase sugar cane from farmers and municipal cooperatives as outlets in the province. Distributorship was
agricultural commodities such as rice and a limited market, the plant was not operated to present for Metro Manila, other regions in the country, and abroad. LMPC
corn. Its main service and revenue source is the its full capacity. Poor product packaging and also served as techno-demo farm given its two-hectare farmland and a
Comparison of
processing and trading of muscovado sugar. the inconsistent quality of the muscovado sugar Baseline and Midterm processing plant with a 240-ton annual capacity.
worsened the problem. Conditions of the Social
LMPC received support from the Philippine Enterprise
With other partners from local government units, government line agencies
Development Assistance Programme in and community organizations,11 PEF’s financing support enabled LMPC to

11 LMPC’s other partners are the LGUs (provincial and municipal), government line agencies (Department of
Trade and Industry; Department of Science and Technology; and Department of Agriculture) and Community
Organizations (Antique-based Cooperatives and Cebu-based Southern Partners for Fair Trade).

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 Revisiting Our First SE Communities Attempts at Social Enterprise

comply with its purchase orders and improve its packaging; thus, making it muscovado at the farmer/consolidator level did not change much but at the
the nucleus of muscovado processing and trading. Export quality sediment- SE level, volume purchases increased.
free muscovado sugar opened the door to the export market in South Korea
and other countries. The patronage refund (P49,000 in 2012 to P530,000 in 2014) also
increased following the sales increase in 2014.
LMPC’s network members provided it with additional financing, technical
and marketing support: INSOL for financing, SPFTC for marketing and
laboratory analysis of sugar, and GLOWCORP for marketing. INSOL,
SPFTC and GLOWCORP are among the ten PEF-SE partners in this study.

LMPC’s volume purchases almost doubled in 2012 to 2013 from 126,550 DIWAGRIMPCO
kilograms worth P4.8 million to 246,400 kilograms worth P9.8 million; 4 Potable Water System
however, a decrease was noted in 2014. PEF financing assistance stopped
in 2014. Despite the reduction in purchases, a big leap in profit was

T
recorded in 2014 due to a dramatic increase in its export sales, particularly he Dancalan Ilog Waterworks and Agro started as Level I (a communal faucet system
in South Korea, as a result of PEF’s initiative of linking LMPC with SPFTC. Industrial Multi-purpose Cooperative facility) and eventually improved and developed
(DIWAGRIMPCO) has been in the business into Level III (water system providing potable
of providing water service since 1993. It began water through individual household connections)
LMPC bought beneficiaries’ produce at a higher rate and provided as a program of the Department of Public in 1996. The cooperative presently serves three
employment opportunities as well. On the other hand, the beneficiaries were Works and Highways (DPWH) funded by the barangays in Ilog, Negros Occidental; namely,
involved in LMPC’s pre-marketing activities. The baseline study showed that Asian Development Bank (ADB) in connection Dancalan, Bocana and Calubang. PEF was
44 percent of beneficiary household members were in agriculture. The main with Republic Act 6716 which provided for the introduced to DIWAGRIMPCO in 2007 through
crops were rice and sugarcane representing 60 percent and 37 percent, construction of water wells, rainwater collectors, the Multi-Sectoral Alliance for Development
respectively, of farming beneficiary households involved with said crops. development of springs, and rehabilitation of (MUAD), then a Poverty Access Center of PEF,
Comparison of Baseline existing water wells in all barangays in the when a loan of P900,000 was granted for the
and Midterm Conditions However, income from LMPC was considered by the beneficiaries as Philippines. first phase rehabilitation of the water system.
of the Households and irregular since plant operation was not constant. Nevertheless, they
Community
recognized the cooperative’s role not just in income generation and From being an association, it became a
employment but also in its loan programs and other forms of assistance to cooperative in 2002. Its water supply system
its members.

The number of workers at the plant remained almost the same during
the baseline and midterm periods. An increase in the number of farmers In 2012, PEF provided DIWAGRIMPCO a P2.7 million loan for the
supplying sugarcane to LMPC (49 in 2012 to 73 in 2014) and consolidators rehabilitation of a portion of its pipeline. In 2014, PEF assisted the
(seven in 2012 to 23 in 2014) was also observed. The buying price of cooperative in its efforts to better monitor its water distribution system with
the installation of additional flow meters and testers.

PEF Interventions

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 Revisiting Our First SE Communities Attempts at Social Enterprise

PEF’s assistance will enable DIWAGRIMPCO to continue its operations, of electricity for pumping water. It reduced its losses in 2014 when sales
augment its number of clients, and identify inefficiencies. With a wider increased. The water system loss as of October 2015 was lower in 2014 but
reach, the cooperative can increase its income. More importantly, with the this level was still considered high and must be reduced further.
rehabilitation of the pipelines and continuous water supply, households have
access to clean and affordable water supply. This translates to extra savings Aside from providing water services to the barangays served,
for the residents who used to rely on water peddlers who charge much DIWAGRIMPCO also provided ten toilets to one community when PEF
Theory of Change higher prices. As the SE becomes profitable, the member-households can granted it a loan. It is not certain if this was a direct result of PEF’s assistance
also receive more dividends from the cooperative. to the cooperative.

Apart from residential clients, DIWAGRIMPCO also has reseller clients that Even when DIWAGRIMPCO’s water supply system was rehabilitated,
sell water to those who do not have access to water service connection; thus, there was a slow increase of its consumers. This could be attributed to the
providing livelihood opportunities. inability to pay membership fees and the cost of water connection estimated
at P4,000. Informants for the community baseline study in 2014 said that
Lastly, if the cooperative operates profitably, it can continue to provide members could have applied for a loan from Dungganon, a local micro
free water for essential community facilities in the barangays that finance institution, for this purpose. PEF then approved a loan of P250,000
DIWAGRIMPCO serves. DIWAGRIMPCO’s initial intention is to serve not for DIWAGRIMPCO to relend to potential consumers to cover the cost of
only its water consumers but also other community members. membership and water installation but the loan was not availed given
DIWAGRIMPCO’s assessment that it was not ready to service new clients
due to insufficient water supply.
In 2015, DIWAGRIMPCO built a seven-kilometer pipeline that supplied
potable water to 473 households and 12 commercial clients in the three said
barangays. The cooperative charged P45 per cubic meter to commercial The livelihood sources of people in Dancalan were varied and included
establishments and only P25 per cubic meter to residential consumers. Aside farming, commerce, trade, or cottage industries. In farming, the main
from DIWAGRIMPCO, five of its commercial member-consumers resell water crops planted were palay (rice), corn, sugarcane and vegetables; the
in Barangays Bocana and Dancalan. People still recalled their condition presence of sugarcane block farming was noted. Residents also earned
Comparison of before, spending much time to collect water—precious time that could have from employment in government or as daily wage earners. According to
Baseline and Midterm been spent for more productive activities. the baseline study, 18 percent of DIWAGRIMPCO beneficiaries had income
Conditions of the Social
Enterprise
Comparison of Baseline from agriculture and a majority of them earned farm wages or they were
and Midterm Conditions
There was a minimal but steady increase in the total number of household tenants; 27 percent of them lived below the poverty line.
of the Households and
clients from 441 in 2012 to 485 in 2015. Also, the number of reseller Community
clients increased from three in 2012 to 12 in 2015. Since 2007, Aside from DIWAGRIMPCO, another water provider was the Ilog Water
the cooperative provided free water to Barangay Health Centers and five District. However, informants of the study claimed that the water supplied
fire hydrants in barangay Dancalan. Barangay residents wanted free water by the latter was not of good quality. Residents of the three barangays
for the public toilets but this had not materialized. who were not members of the cooperatives were indirect beneficiaries
of DIWAGRIMPCO as they purchased water from water resellers of
In 2013, the cooperative suffered an income drop (net loss of P77,000) cooperative members. These resellers were beneficiaries themselves since
due to the low supply of water during the El Niño season and the high cost they earned income from reselling. No water-borne disease was reported.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

DIWAGRIMPCO succeeded in increasing the total volume of water supply

from 41,667 cubic meters in 2012 to 56,488 cubic meters 2015.
The community study showed that in the past, water from DIWAGRIMPCO MUAD
was available 24 hours a day. However, due to the recent water shortage, 5 Hybrid Goat Raising
DIWAGRIMPCO had to shorten the water distribution schedule to six-
hour shifts. The cooperative was unable to sustain the delivery of water

T
to community facilities as it intended nor had it released dividends for its he Multi-Sectoral Alliance for Development In 2012, MUAD started a goat-raising project
members. (MUAD), a nongovernment organization in Calatrava, Negros Occidental as an answer
(NGO) composed of 20-farmer to their beneficiaries’ request for assistance on
The midterm study showed that beneficiary households used other sources organizations working for rural development and their papaya and vegetable projects. Most of
of water aside from DIWAGRIMPCO’s. About 13 percent of beneficiary poverty alleviation in Negros Island, provides MUAD’s beneficiaries are native goat raisers.
households bought water from refilling stations compared to none in the support to farmers through the provision of The project by MUAD included the construction
baseline study. Some beneficiaries owned their water pumps and ground agricultural technology, livelihood opportunities, of a goat breeding center to raise high-quality
wells in addition to their individual water connection. Some residents training for capacity building, and services for breed of goats to be distributed to individual
admitted that nonmembers had access to DIWAGRIMPCO water provided product enhancement. MUAD became a partner farmers. Fattened goats were then bought back
by some of the cooperative’s residential clients. of the Peace and Equity Foundation (PEF) in and sold for goat meat. MUAD focused on
2004 as a Partnership and Access Center (PAC). raising the hybrid variety so as not to compete
The price of water (P3 - P5/20-liter container) from peddlers remained with existing goat raisers.
the same. This means that it would cost P1,800 to P3,000 for eight cubic
meters which DIWAGRIMPCO sells for P250 for the same quantity despite
the increase from the earlier flat rate of P180. The increase in the price of
the cooperative’s water was needed to increase revenues. Residents were PEF provided a P400,000 grant to fund the preparation activities
informed regarding price increases. Unfortunately, accumulated arrears of (e.g., study period and trainings) for the Hi-Breed Goat Raising Project
unpaid bills led to the disconnection of 87 residential consumers. in 2011; and a P1.25 million loan to MUAD, in addition to a P300,000
counterpart or financial assistance from donors, as working capital, given
Based on data obtained from the midterm household survey, 88 the following year. A goat breeding center with a capacity of 100 does was
percent of non-beneficiaries (n=94) revealed that they were aware established and enabled MUAD to provide ready-to-breed goats. Technical
of DIWAGRIMPCO’s water project. Seventy five percent of former PEF Interventions trainings for those interested farmers in the goat project (prioritizing
DIWAGRIMPCO’s clients said that they opted out of the project because MUAD’s beneficiaries of their other projects) and technical assistance
of the insufficient water service. The main reason for those who did not through a linkage with the local government unit (LGU) were also provided.
participate in the project at any given time was their financial incapacity
(57 percent). The financial assistance was used to buy back these goats from their
beneficiaries for reselling. In 2014, PEF approved an additional P340,000
Despite some dissatisfaction with the service of the cooperative, 64 percent loan as a supplemental budget for the project to increase the capacity of the
of beneficiaries claimed that their life situation became better compared to breeding center from 100 to 300 does translating to an increase from five to
before when they did not have it. 15 does per goat raiser.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

With the same production cost, hybrid goats can be sold at a higher market.
This will potentially increase the beneficiaries’ income from goat-raising: PARFUND
from P400 to at least P1,500 per month. 6 Rice-Duck Farming
Theory of Change

T
MUAD’s 15-hectare land in Calatrava was used to establish the hybrid he Philippine Agrarian Reform Foundation Integrated Rice-Duck Farming System (IRDFS)
goat breeding center which increased its capacity in 2013 from 100 to for National Development (PARFUND) was which allows for the production of organic rice
300 goats as it encouraged more farmers to engage in hybrid goat-raising. established in 1993 to improve the quality while relying on less human labor and chemical
From 2013 to 2014, MUAD distributed five does as well as cyclone wires of life of farmers and farm workers by promoting inputs. Rice grown using the IRDFS is proven
and goat housing materials to the first batch of beneficiaries consisting of 30 direct or collective ownership of the land that to be more resistant to typhoons and other
farmers. they till. One of the projects of PARFUND is the problems.
Comparison of
Baseline and Midterm Goat mortality increased because of Typhoon Yolanda in November 2013,
Conditions of the Social
El Niño in 2014, and the shortage of grazing grass in the breeding centers.
Enterprise In April 2012, the Peace and Equity Foundation (PEF) approved a P6.7
The number of goat raisers eventually declined and the operation of the
million loan to PARFUND: P5 million as working capital and P1.7 million for
breeding center stopped in 2015.
production. In addition, a grant of P2.2 million was given with P2 million to
be used for the program’s management and administration, and P200,000
for a rice-duck industry research. As a result, the IRDFS for the CARAGA
During the baseline period of 2012, 28 percent of beneficiaries and
Region12 rice farmers was established.
15 percent of non-beneficiaries engaged in livestock production. This PEF Interventions
is the second livelihood activity of the residents in the area next to crop
production. Of the households involved in livestock production, 27percent
The establishment of IRDFS will benefit around 1,800 CARAGA rice farmers
of the beneficiaries and 18 percent of non-beneficiaries were engaged in
cultivating 1,800 hectares. The IRDFS will increase and diversify the income
goat-raising.
sources of farmers; promote environmental protection and sustainable
Comparison of Baseline
agriculture as the technology provided an alternative to chemical pesticides;
and Midterm Conditions Prior to the establishment of the center, goat raisers sold their native goats
of the Households and and provide additional livelihood because of the production of byproducts
to traders. The traders bought the goats basing on a tumbukan or rough
Community such as duck eggs and duck meat.
estimate, and not per kilogram. On the average, the goat raisers earned Theory of Change
P300 to P400 for every one-year-old native goat weighing 20 kilograms.

As the buyer of goats that it distributed to its beneficiaries, MUAD bought

back the goats at P100 per kilogram which translated to P2,000 to P2,500
earnings per goat given the same cost of raising hybrid and native goats.
Unfortunately, the increase in the mortality rate of the goats led to the
eventual shutdown of the breeding center and the closure of the project. 12 The Caraga Region (Region XIII) in northeastern Mindanao includes the five provinces of Agusan del
Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur and Dinagat Islands; and the six cities of Butuan,
Cabadbaran, Surigao, Tandag, Bislig and Bayugan.

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Through PEF support, PARFUND started IRDFS in Brgy. Cagbas, Bayugan, stopped and thus, its benefits were not sustained. By 2016, the earnings
Agusan del Sur in 2012. They successfully introduced IRDFS to 100 farmers from rice production declined to P2,000 on average.
through orientation and training on IRDFS techniques in partnership with the
Department of Agriculture (DA). PARFUND also established key partnerships Not only farmers benefitted from the project but also the balut (fertilized
with consolidators GLOWCORP and CODE SPA as markets for IRDS like duck eggs) vendors organized by PARFUND. They would sell each piece at
organic rice, duck meat and duck eggs. PARFUND initially selected nine five pesos and earned approximately P500 per night if they successfully sold
Comparison of farmers who were given an IRDS package consisting of 170 ducklings (150 100 pieces of balut. These vendors were also adversely affected by
Baseline and Midterm female & 20 male), V-Net, and two bags of feeds. the closure of the IRDFS project.
Conditions of the Social
Enterprise
By 2013, PARFUND reached 20 farmers. The remaining 70 to 80 farmers
that were not selected by PARFUND benefited in terms of knowledge from
the IRDFS orientation and training. PARFUND initiated an organic and
environmentally friendly rice farming system not dependent on fertilizers
INSOL
and pesticides.
7 BDS/microfinance
In 2014, typhoon Seniang destroyed the rice farms, the floating houses of
ducks and the dam that served as the primary water source in the area. In

I
the latter part of 2015, the El Niño phenomenon, and the unrepaired dam nnovative Solutions (INSOL) started in 1997 providing technical and financial assistance as well as
resulted in the drastic decrease of water supply which, caused the high business development services to microenterprises. The first INSOL Enterprise Center (IEC) in Antique
mortality of ducks. By the first quarter of 2016, water supply was no longer catering to women micro-entrepreneurs who lacked management, marketing and technological skills
enough to support the IRDFS. The beneficiary farmers eventually stopped the was established in 2005. Other IECs were initiated in Laguna, Rizal, and Metro Manila.
IRDFS practices on their farms.

The IRDFS project was not sustained due to the system’s vulnerability to The Peace and Equity Foundation (PEF) provided INSOL with an P8
typhoons and the El Niño dry spells. million credit line in 2012 to be used as loans to micro entrepreneurs in
CALABARZON13 and Antique. The credit line would support nearly 8,000
microenterprise related jobs in five years and offer different financial
PARFUND established the IRDFS as an alternative to traditional rice farming products: working capital and large asset investments, purchase of raw
in Agusan and eventually in CARAGA region. Crop production, particularly materials and inventory, acquisition of short term rent-to-own equipment,
PEF Interventions
rice farming engaging 90 percent of farmers, was the primary livelihood and financing a purchase order for manufacturers and producers.
in the area. Based on the 2012 data, farmers using traditional methods
earned around P11,000 to P15,000 per hectare per harvest while farmers
who adopted the IRFDS increased their earnings from around P20,000 to
Comparison of Baseline P30,000 per hectare for every harvest. Due to calamities, the IRDFS project
and Midterm Conditions
of the Households and
Community

13 The four provinces of Cavite, Laguna, Batangas and Quezon in Southern Tagalog.

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PEF support will be used to provide loans to micro-entrepreneurs in the

CALABARZON area and Antique Province, who lack the capacity to access
conventional financing opportunities. This will enable the micro-businesses SPFTC
to expand, increase revenues and income of the micro-entrepreneurs, and 8 Market for Fair Trade
generate employment.
Theory of Change

T
he Southern Partners and Fair Trade Center market (at 20 percent) and the foreign markets
Most of INSOL’s clients were engaged in trading and retail business while a (SPFTC) Inc. is a food manufacturer of (at 80 percent) with Japan as its major trading
few were into agriculture-related businesses. INSOL provided loans to 265 dried mangoes and other tropical fruits, partner.
enterprises since 2012. The loans were usually for equipment upgrade to fruit jams, puree, concentrates and blends, virgin
maintain or increase production, the purchase of additional raw materials, coconut oil (VCO), desiccated coconut, powdered The St. Peter’s Academy Alegria Foundation Inc.
and the enhancement of operations. turmeric, moringa (malunggay) and others in (SPAAFI) is considered as SPFTC’s most successful
Cebu. It assists farmer communities through partner in community organization. Based in
Comparison of Beneficiaries could initially borrow up to P50,000. Through loan renewals, training in best practices, new technologies for Alegria, Cebu, SPAAFI processes products like
Baseline and Midterm as much as P250,000 to P500,000 could be availed. Due to the loan farming, and the distribution of farm inputs. moringa, turmeric and desiccated coconut that
Conditions of the Social repayment delinquency of their clients, INSOL was not able to pay its credit
Enterprise These farmer communities serve as the suppliers are delivered to and marketed by SPFTC. To tap
line to PEF and thus, the credit line was stopped in 2016. PEF and INSOL or supply base of raw materials for SPFTC. new markets, SPFTC helps communities enhance
worked on a plan for INSOL to fulfill its obligations as required by PEF. their agricultural production to increase the
SPFTC also partners with different organizations supply base. The successful marketing of these
that are certified practitioners of fair trade and agriculturally processed outputs increases the
Most beneficiaries of INSOL’s financing project were better off than the carry their products for the local and export demand for agricultural crops and helps sustain
beneficiaries of other social enterprise (SE) partners. Around 36 percent markets. The SPFTC business serves the domestic farming as a source of livelihood.
belonged to the lower middle income group, 15 percent from the middle
income group and 16 percent from the upper middle income group.
The Peace and Equity Foundation (PEF) provided SPFTC a loan of P1 million
The average income of the CALABARZON and Antique beneficiaries and a credit line of P3 million in 2012. These were used to provide trainings
Comparison of Baseline was P50,000 per month in 2012, slightly declining to P42,000 in 2015. in organic farming, fair trade practices, desiccated coconut food processing
and Midterm Conditions However, based on the results of the focus group discussion of Antique and coconut charcoal production in ten farming communities; conduct
of the Households and
beneficiaries, beneficiaries perceived their income to have improved in product testing to ensure compliance to standards; provide equipment for
Community
2015 compared to 2012. coconut charcoal production to farmers; sustain production runs of coconut
PEF Interventions charcoal; improve SPFTC’s plant facility; and look for new clients. These
improvements were needed to enable SPFTC to meet the standards required
by the new market. Moreover, P1 million from the credit line would be used
by SPFTC to redeem its loan from another creditor.

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The training of 480 farmers on fair trade practices, organic farming and
improved village processing of desiccated coconut will enable them to adopt
sustainable farming practices and add value to their products. This results SUBASTA
in reduced costs, increased incomes and lessened impact of climate change 9 Cacao
on the farmers’ livelihood. A portion of the fund will also be used for the
improvement of SPFTC’s plant facilities that will generate employment for 15

T
Theory of Change
individuals. By doing these, SPFTC will meet the increasing demand, and he Subasta Integrated Farmers Multi- The key activities of SUBASTA include buying
expand to other markets that require higher quality standards. Purpose Cooperative (SUBASTA) is a and selling of cacao beans produced by its
village-based farmers’ organization farmer-members and non-member farmers, and
founded by a group of 27 cacao farmers from enhancing its members’ technical know-how on
The PEF funded SPFTC interventions—trainings on fair trade, organic Subasta, Calinan, Davao City in 2008. These 27 production and postharvest activities through
practices and desiccated coconut food processing, and the provision of farmers all graduated from a farmer field school training and seminars. The cooperative has also
necessary equipment and supplies—resulted in the organic certification of conducted by the United States Department of set up its own nursery of cacao seedlings and
the farmers’ desiccated coconuts. SPFTC was also able to find new clients Agriculture (USDA) Agriculture Cooperative started to venture into the business of processing
through contacts initiated during its attendance at various fair trade fairs in Development International and Volunteers in cacao beans, i.e., drying, fermenting, and just
Comparison of Cebu and Manila. SPFTC is currently negotiating with seven new clients here
Baseline and Midterm Overseas Cooperative Assistance (ACDI/VOCA) recently, making tableas.
and abroad. under its Success Alliance Phase II Program.
Conditions of the Social
Enterprise

Agriculture was one of the main sources of livelihood aside from The Peace and Equity Foundation (PEF) provided SUBASTA a loan of
construction and carpentry, and wholesale and retail trade in Alegria, P800,000 to complete the 12 metric ton purchase order of fermented cacao
Cebu. As a fourth class municipality, poverty incidence was high. Around beans of Askinosie Chocolates, a chocolate company in Missouri, USA and
70 percent of the households were poor while 27 percent were low-income the largest buyer of SUBASTA. This financial assistance provided in 2012
households. was used to buy cacao beans from farmers in Calinan.
PEF Interventions
Comparison of Baseline The improvements of the village processors through SPFTC generated 26
and Midterm Conditions jobs directly and 50 jobs indirectly. Farmers and village processors of PEF’s support will enable SUBASTA to meet the order of Askinosie
of the Households and
coconut charcoal were practicing organic farming and fair trade. By 2014, Chocolates that buys the fermented cacao at a higher price compared to
Community
farmers were already organic and fair trade certified. Moreover, coconut SUBASTA’s other clients. SUBASTA will use the money to purchase cacao
farmers earned more than before because of the increase in the price of beans from farmers and these will be used to make fermented beans.
processed fresh coconut. Farmers sold desiccated coconut at P80 to P90 per
kilo, which translates P11 to P21 per kilo profit compared to selling whole Through PEF’s financial assistance, SUBASTA will be able to meet the
nuts at P7 per kilo. Theory of Change Askinosie Chocolates’s supply requirement making it a regular customer of
SUBASTA; thus, enhancing its marketing capability. The cacao purchases
of SUBASTA will also be given as immediate payment to the cacao farmers
ensuring the farmers’ stability of livelihood and income.

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With PEF’s help, Subasta was able to deliver 12 metric tons of fermented
ADFI
cacao to Askinosie Chocolates. Because of this, the company became a
client of SUBASTA until 2013. This purchase also contributed to SUBASTA’s
10 Handicrafts Made of Abaca, Buri and Bariw
higher sales revenue given Askinosie Chocolates higher price. After 2013,
Comparison of SUBASTA supplied fermented cacao beans to Alternative Marketing Center

T
Baseline and Midterm
(ALMACEN) managed by Josefa Segovia Foundation Inc. in Davao City. he Antique Development Foundation 300 food processors and 200 ecotourism
Conditions of the Social
Enterprise Incorporated (ADFI) is a nongovernment service providers serve both the local and export
organization (NGO) operating in 11 markets.
Cacao farming is the main livelihood in Calinan, Davao City with 567 Antique municipalities. ADFI’s Enterprise
farmers (160 in barangay Calinan) or around 41percent of residents Development and Management Program aims A people’s organization (PO) called Sta. Rosario
engaged in the cultivation of this crop. On average, SUBASTA cacao to provide financial, technical and management Multipurpose Cooperative (STORMPC) is one of
farmers earned around P9,700 per month in 2012. Prior to SUBASTA’s assistance to organized groups for them to the beneficiaries of ADFI. STORMPC is located in
presence as buyer, cacao farmers received five to seven pesos per kilogram better manage livelihood resources for increased Pandan, a town very close to Boracay. Consisting
of wet cacao, and P27 per kilogram of dried cacao. In 2015, SUBASTA productivity and income. ADFI established the mostly of weavers, the PO produces handicrafts
Comparison of Baseline bought dried cacao at P100 to P120 per kilogram while other buyers Arts and Crafts Program to contribute to poverty made of abaca, buri and bariw sold largely
and Midterm Conditions paid P60. With the help of SUBASTA, a higher selling price for cacao was alleviation by developing market linkages for to the tourists who visit Boracay. ADFI assisted
of the Households and realized. the micro, cottage and small enterprises in the STORMPC to market the latter’s products in SM
Community
handicraft sector. Through the facilitation of Kultura, the Filipiniana section of the country’s
ADFI, its members that include 800 weavers, largest chain of shopping malls.

The Peace and Equity Foundation (PEF) provided ADFI a loan of P500,000
to help finance SM Kultura’s purchase order of various bags amounting
to P841,000. The loan, provided in 2012, was to be used to pay the bag
weavers immediately even while ADFI was awaiting payment.
PEF Interventions

PEF’s support will enable the ADFI to finance the SM Kultura’s purchase
order, and immediately pay the beneficiary weavers of STORMPC; thus,
ensuring the weavers’ stability of income, and providing them an incentive
for continuous production. The ability to supply the clients’ demand
enhances ADFI’s marketing capability while bringing stable and continuous
income to the weavers.
Theory of Change

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 Revisiting Our First SE Communities Attempts at Social Enterprise

Because of PEF’s support to finance the purchase order of SM Kultura, ADFI

gave timely payments to the weavers and this allowed them to continue the Conclusion & Recommendations
bag weaving business. Eventually due to the difficult terms of the marketing
agreement between ADFI and SM Kultura, the contract rescinded. Instead,
ADFI opened an agreement with Ayala Foundation in 2014 to market the
native bags. The terms of this new arrangement appeared to be beneficial
Comparison of to ADFI and to its weaver beneficiaries. The PEF support was a one-shot
Baseline and Midterm assistance to ADFI.
Conditions of the Social
Enterprise

Weaving, the main livelihood in Sto. Rosario, Pandan, Antique, engaged

77 percent of the residents in 2012. Most of the weavers created bags
out of native materials like buri, bariw, abaca, bamboo and nito. Other
than bags, they also weaved different products like baskets and mats.
Most of these weavers were women. ADFI, through STORMPC, reached 65
women beneficiaries. On average, bag weavers earned around P16,000 to
Comparison of Baseline P20,000 per annum.
and Midterm Conditions

B
of the Households and While PEF’s support for ADFI’s purchase order sustained the weaving
Community ased on the individual case analysis of the in nurturing sustainable SEs and re-positioning
activities for the period covered, individual incomes of bag weavers saw a
ten social enterprises (SEs), the following other organizations towards an SE business
decline thereafter. Their yearly earnings dropped from P22,000 in 2012
analysis answer the overall research model? (3) What was the socio-economic
to P16,000 by the end of 2015. This decrease in income was due to lower
question of the midterm study:14 impact on households participating in a social
sales from P33,000 in 2012 to P22,000 in 2015.
enterprise? The following is structured as an
Did the social enterprise program of answer to each key question.
the Peace and Equity Foundation (PEF)
help households and communities
realize sustainable incomes, productive 1. WERE PEF RESOURCES UTILIZED
assets, [improved access to] essential EFFICIENTLY?
services and resiliency?
If efficiency means using the funds as
This overarching question is broken down into intended, the general answer to this question
three: (1) Were PEF resources utilized efficiently is yes. The SEs used the resources they
through its support of organizations that received from PEF as intended. But as to the
promote social enterprises? (2) Did PEF succeed efficient utilization of resources to obtain the

14 Refer to Annex A of Study Design for the Assessment of the Midterm/Endline Projects, 30 November 2015.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

outcomes promised by a project supported percent annually from 2012 to 2015: 441, that led to this outcome. INSOL takes
for a particular SE, then the answer varies 455, 461 and 473. The growth rate of its responsibility for this.
across the different projects, and based commercial clients, from three in 2012 to
on the successful delivery of the promised six in 2013 and to ten in 2014, was much The assistance to SUBASTA and ADFI was
benefits of the project. higher. a one-shot financing that critically enabled
these SEs to fulfill purchase orders and
With PEF’s credit line, the SEs achieved their PEF’s assistance to MUAD, PARFUND and continue with their product marketing; thus,
target plan of increasing the purchase of INSOL can be considered as a loss since the sustaining livelihoods of their beneficiaries.
wild honey, bananas and muscovado sugar. projects of these three SEs were stopped. The The long-term assistance to SPFTC has
From 2013 to 2014, NATRIPAL significantly projects’ end was due to events beyond the fulfilled the many outcomes it promised.
increased the volume of honey it purchased control of project proponents as in the cases
from its members from 7,163 kilograms of MUAD and PARFUND although this may
in 2013 to 8,447 kilograms as well as the not be the case for INSOL. 2. DID PEF SUCCEED IN NURTURING
purchase price by an average escalation SUSTAINABLE SOCIAL ENTERPRISES
of fifteen pesos per kilogram. MAGIRCO’s The high-quality goat breeding center closed AND RE-POSITIONING OTHER
purchase of bananas and prices increased in 2015 after some initial success of MUAD’s ORGANIZATIONS TOWARDS AN SE
from 3.7 million kilograms (P4-7/kg) in project to assist farmers in high-quality BUSINESS MODEL?
2012 to five million kilograms (P10/kg) goat-raising. PARFUND’s project to introduce
the following year though this decreased the Integrated Rice Duck Farming System The SE business model is an alternative
to 3.4 million kilograms (P6/kg) in 2014 (IRDFS) to farmers also stopped in 2016 to profit maximizing private enterprise
due to the decrease in demand from China. while IRDFS-trained farmers discontinued because trading relationships are seen as
LMPC doubled its purchase of muscovado this system even earlier in 2014. However, contributing to promoting social democracy in 1997). MUAD was a PEF partner as
sugar from 126,000 kilograms in 2012 to both MUAD and PARFUND projects were and financial equity (Ridley-Duff and Bull, Partnership Access Center in 2004.
246,000 kilograms in 2013 only to decrease adversely affected by natural calamities such 2011). However, profit maximizing and The SEs have previously obtained assistance
to 133,000 kilograms in 2014, the year PEF as typhoons Yolanda (2013) and Seniang the attainment of the social and political for financing and marketing from other
assistance to LMPC stopped. (2014) that affected livestock raising as well objectives can be simultaneously pursued; agencies and financing institutions, both
as damaged vital infrastructures, and the SEs must be economically viable to pursue its private and government.15 PEF’s provision of
After the rehabilitation of its water supply El Niño that dried water sources and made social goals. credit lines augmented the working capital
system, DIWAGRIMPCO increased the scarce grass for grazing. These underscores of NATRIPAL, MAGIRCO and LMPC which
average volume of water it sold from 42,000 the need to include measures to mitigate Several of the SEs have been in existence for increased the capacity of their operations
cubic meters in 2012 to 57,000 cubic risks in SE planning. at least a decade by the time PEF provided and the number of beneficiaries.
meters in 2014 and 56,000 cubic meters in support in 2011 and 2012. The oldest
2015. In 2013, the 38,000 cubic meters The obligation of INSOL for the grant of a are NATRIPAL and MAGIRCO (founded in Skills training and mentoring of SE personnel
decrease in water supply was due to the El credit line that was discontinued in 2016 is 1989) while INSOL is the youngest (founded and other interventions for organizational
Niño dry spell. The number of residential currently being negotiated with PEF. It was
clients progressively increased by one to five poor repayment by the clients of INSOL

15 For example, DTI, DOST, BFAD for NATRIPAL; DA-ACEF and Land Bank of the Philippines for MAGIRCO and PLGU, MUAD and AIDFI for DIWAGRIMPCO.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

improvement were important. For example, SE’s project proposal, and guided by its beneficiaries of the enterprise value on their lives. A higher proportion of
research and development efforts enabled theory of change. Details of which are in chain. A number of the member beneficiaries (70 percent) compared
MAGIRCO to successfully shift from first to Part II. beneficiaries (40 percent) and non- to nonbeneficiaries (42 percent) were
second-fry banana chips which, in turn, member beneficiaries such as wild satisfied with their financial status.
enabled them to capture other markets 3.1 NATRIPAL honey suppliers (69 percent) stated that
resulting from this higher value-adding NATRIPAL successfully increased NATRIPAL helped improved their lives. 3.4 DIWAGRIMPCO
activity for its production. household’s income through honey The most important impact of this SE
gathering. Baseline data revealed that 3.2 MAGIRCO is making potable water accessible
Assistance to ADFI, SUBASTA and SPFTC the average sale of honey increased The number of MAGIRCO’s plant and affordable to households. Without
nurtured these SEs to be sustainable. PEF’s from only P2,420 in 2012 to P5,960 workers was reduced by half between this, residents will be forced to buy
one-time financing of ADFI’s purchase order in 2015. Selling price per kilogram the baseline and the midterm period from peddlers selling water from three
established the marketing arrangement of also increased by an average of P15 because of quality issues, and the to five pesos per 20-liter container;
ADFI with its buyer, initially SM Kultura, and in 2014. The per capita income for ongoing territorial dispute between this means that eight cubic meters of
then Ayala Foundation. The same conclusion beneficiary households tripled between the Philippines and China, one of the water would cost P1,800 to P3,000.
applies to the financing assistance to 2012 (P6,218) and 2015 (P9,084). major clients of MAGIRCO Banana DIWAGRIMPCO made this available
SUBASTA for a purchase order of 12 metric Even when one deflates the 2015 Chips. However, the increase in the for only P250. The increase in the
tons of fermented cacao beans by Askinosie income by 17 percent16 to P15,840, price per kilogram of cardava bananas number of residential consumers from
Chocolates (USA) in 2012 and repeated this is still a 2.5-fold increase from the from four, to seven, to ten pesos would 441 (2012) to 473 (2015) represents a
in 2013. Afterwards, SUBASTA supplied 2012 per capita income. have improved the revenues of banana seven percent rise; and of commercial
fermented beans to another buyer. SPFTC farmers and consolidators. From 2012 consumers from only three in 2012 to
has successfully obtained certification for Among beneficiary households, to 2014, members of MAGIRCO twelve in 2015 means a 300 percent
organic practices for its village processors 98 percent were considered poor enjoyed a patronage refund, paid increase.
and farmers for desiccated coconut; thus, based on income levels in 2012. By to members who sell bananas to
opening markets for fair trade and organic 2015, this was drastically reduced to MAGIRCO as an incentive. 3.5 MUAD
products. 39 percent. Among non-NATRIPAL The goat-breeding project reached a
member households, 96 percent were Midterm surveys indicate that 34 and total of 40 goat raisers in 2013 from
considered poor in 2012 reduced to 26 37 percent of beneficiary households the target beneficiaries of 350 goat
3. WHAT WAS THE SOCIO-ECONOMIC percent by 2015. claim that their life condition and raisers during a project duration of
IMPACT ON HOUSEHOLDS THAT financial situation improved since their five years (2011-2016). In the early
PARTICIPATED IN A SOCIAL The quality of wild honey bought by participation in the SE. years of the project, a high-quality
ENTERPRISE? NATRIPAL and the corresponding price bred goat could be sold from P2,000 to
increase per kilogram contributed to 3.3 LMPC P2,500 compared to P300 to P400 for
This discussion will focus on the intended the poverty alleviation of NATRIPAL Forty percent of LMPC beneficiaries a native goat. The difference of P1,700
impact on households as designed by each member beneficiaries and indirect claim that the SE made positive impact

16 To take into account of the increase in prices since 2012 as measured by the consumer price index

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 Revisiting Our First SE Communities Attempts at Social Enterprise

to P2,100 offers households five-fold the targeted 120 farmers. Prior to

earnings by choosing to breed hybrid Subasta in 2012, the price for dried
over native goats. cacao was at P27 per kilogram. By
2015, SUBASTA paid between P100
3.6 PARFUND and P120 for the same product.
The project only managed to introduce SUBASTA’s higher prices translated to
the Integrated Rice Duck Farming higher incomes for farmers and their
System in one barangay involving 29 families.
farmers by 2013, far from its target of
350 farmers in Agusan Del Sur during 3.10 ADFI
a period of seven years. The project of ADFI provided benefits
to 65 women weavers belonging to the
3.7 INSOL Sto. Rosario Multi-Purpose Cooperative
INSOL provided financial assistance in Pandan, Antique.
to 265 out of the targeted 350 micro-
entrepreneurs. An initial loan of The different projects reached, in
P50,000 can be renewed tenfold or up various ways, their target beneficiary
to P500,000. households; thus, creating benefits
at the household level. Some SEs
3.8 SPFTC generated benefits for the entire period
The project generated 26 direct jobs as of the project but projects of MUAD, Projects can create jobs directly or program help households and communities
planned and an additional 50 indirect PARFUND and INSOL were prematurely indirectly. Statistical findings indicate realize sustainable incomes, productive
jobs. There is no data on the number closed; in these cases, the benefits to that the number of working members assets, [improve access to] essential services,
of farmers actually trained from the households were not sustained. Projects in a household is positively related to and resiliency? Below are some findings that
projected target of 480. like SUBASTA and ADFI were provided higher incomes and revenues. pertain to community and spillover effects of
with one-shot financial assistance that the SE projects as applicable.
3.9 SUBASTA was critical and enabled the SEs to
The project of SUBASTA benefited continue its activities beyond the period 4. WHAT ARE THE COMMUNITY AND Higher prices offered by NATRIPAL,
nearly 160 cacao farmers residing of assistance. SPILLOVER EFFECTS OF THE SE MAGIRCO and LMPC for wild honey,
in barangay Calinan, 40 more than PROJECT? cardava bananas and muscovado sugar
to its member-suppliers possibly raised the
There ought to be no key question No. 4. purchase price offered by other sellers,
However, it is implied in the over-all thereby increasing suppliers’ revenues.
research question: Did PEF’s social enterprise

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 Revisiting Our First SE Communities Attempts at Social Enterprise

through improved livelihoods, financial Subscribing to the concept of development as

access and jobs. SEs also cushioned the freedom, the purpose of a development process
impact of economic shocks to beneficiaries. is to expand the socio-economic opportunities of
The success of the SE’s projects contributed to people who, as entrepreneurs, can acquire assets
financial equity and to decrease in number that produce economic returns, and diversify
of poor households. livelihood sources. Establishing a regular and
reliable market outlet for farm output are truly
essential to the inclusion of rural households in
CONCLUSIONS economic growth. Researchers of the community
studies18 underscore the importance of continuous
PEF has offered economic opportunities for poor income for households; i.e., income with
households in well-selected locations based on regularity and predictability.
the study of the four SEs. MAGIRCO is in North
Cotabato in Region 12, the region with the Poverty reduction as a development goal may be
third highest poverty incidence at 44.5 percent. achieved in two fronts: expanding opportunities
DIWAGRIMPCO and LMPC are in Negros and avoidance of risk (or provision of safety
Occidental and Antique, respectively. Both are nets). As poor households join the market,
in Region 6, with a poverty incidence of 30.5 they become more vulnerable to the volatilities
percent. NATRIPAL is in Palawan of Region 4B of prices, demand and supply. A poverty
Even if not all Dancalan households are percent in the baseline and 73 percent in with a poverty incidence of 29.8 percent.17 reduction program can reduce the vulnerability
consumers of DIWAGRIMPCO, most the midterm which is higher than beneficiary of households. For example, Dr. Mary Racelis
households rely on it for clean drinking households at 31 percent in the baseline PEF must continue appropriately selecting project of the Independent Review Board proposed
water. From the FGD, it is estimated that 85 and 48 percent in the midterm. The same locations to ensure that the host communities mechanisms that safeguard the SE and its
percent of the households buy water from pattern is true for LMPC. The proportion are indeed poor. Projects that enhance the beneficiary households from price fluctuations
DIWAGRIMPCO for domestic use. Water of nonbeneficiary households below the chances of household livelihoods to prosper can were included in PEF’s implementation
is accessible even to non-members as they poverty line is higher for the baseline and be as important as projects providing direct and framework.
can buy water from residential members midterm at 71 percent while the proportion indirect jobs.
and commercial members. The FGD report of beneficiary households is 48 percent in PEF’s support for technological innovation,
revealed that indirect beneficiaries are the baseline and 56 percent in the midterm. For the benefit of the small farm producers, capacity building, research and development
equally grateful for this access to clean PEF can continue to support the development in the SEs are critical and must be recognized.
water service. DIWAGRIMPCO freely This observation indicates the need to of the market and complementary business In this regard, there is a need to monitor the
supplies three cubic meters of water to three expand the reach of the SE benefits opportunities for specific products from these
Barangay Health Centers. to nonbeneficiary households in host localities.
communities. The more successful SEs did
For DIWAGRIMPCO, nonbeneficiary projects that benefitted the households while
households below the poverty line is 48 creating social value in the communities
17 Based on poverty data for the1st semester of 2015. The national poverty incidence is 26.3%.
18 Presentations held on 11 February 2016.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

benefits produced by these interventions at grounded on facts and well-defined goals and
the level of the SE as well as at the level of the benefits.
trainees.
PEF may conduct studies to carefully select new
The findings that beneficiary households of a projects for SEs that are viable and profitable.
specific SE project are not as poor as the non- It is important to determine appropriate risk
beneficiary households and are economically mitigation and control measures to achieve an
better off does not necessarily mean it does not acceptable level of risk. A project design will be
contribute to poverty reduction. Wealth creation drafted to enable the project to receive further
and sharing of value with poor households may interventions.
be accomplished through other means and not
necessarily having the poorest households as Selection and Monitoring of Beneficiary
direct beneficiaries of projects. Households
There should always be a community baseline
study for PEF and the SE to have better
RECOMMENDATIONS understanding of the community a project intends
to serve. The community should NOT always be
Site and Project Selection necessarily considered for its location, although
The internal capacities of the enterprise and usually included; it may be wider geographically
the market cycles upon PEF’s entry should be where an organization or agency is located.
considered in the performance evaluation of the The community can be a specific group of
SE and the SE’s project. people; e.g., wild honey gatherers.

There should be an adequate description In the identification of target beneficiaries for

of the product value chain and industry specific projects, clearly defined categories of
characterization that includes both the local and poor households may be employed; e.g., poor
global market context of a project. For example, household with members having some skills, poor
to what extent is the tourism industry of Palawan households with some form of asset, etc.
complementing the demand for wild honey?
Attributing improvements of household and
Project proposals must reveal the capacity of the community conditions to PEF supported SE
SE to understand the links between its project projects requires a clear articulation of how
and its target beneficiaries, whether these are project outcomes are intended to affect directly
individuals, households, groups of farmers, and indirectly key outcomes for households and
etc. Well-crafted proposals are those that are communities.

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 Revisiting Our First SE Communities Attempts at Social Enterprise

References

ADFI: Midterm/End-Line Impact Assessment (12 December 2016). Submitted by ERB Research Midterm/Endline Report of PEF Social Enterprise Project with SPFTC (7 December 2016). Prepared
Services, 68 pages. by Insight Asia Research Group (Phils.), Inc., 75 pages

ADFI: Qualitative Study (31 December 2016). Submitted by NEXUS, 23 pages. MUAD (2016) Goat Agriculture Enterprise: Community Midterm/Endline Report. Prepared by
Philippine Partnership for the Development of Human Resources in Rural Areas, 1 September
DIWAGRIMPCO (2016). Midterm/Endline Assessment of PEF Social Enterprises: Community Endline 2016, 16 pages
Report. Prepared by Philippine Partnership for the Development of Human Resources in Rural
Areas, 29 January, 12 pages NATRIPAL (2016) Qualitative Study. Submitted by NEXUS, 21 pages.

INSOL: Qualitative Study (31 December 2016). Submitted by NEXUS, 25 pages. PARFUND (2016) Integrated Rice-Ducks Farming System (IRDFS): Community Midterm/Endline
Report. Prepared by Philippine Partnership for the Development of Human Resources in Rural
LMPC: Midterm/Endline Impact Assessment (February 2016), 16 pages. Areas, 1 September 2016, 16 pages

LMPC: Qualitative Study (29 January 2016). Submitted by NEXUS, 25 pages. Ridley-Duff, Rory and Mike Bull, 2011. Chapter 1: Introduction of Understanding Social Enterprise:
Theory and Practice. London: Sage Publications Ltd. Pp. 1-7.
MAGIRCO (2016) Banana Chips Production.Midterm/Endline: Community Midterm/Endline
Report. Prepared by Philippine Partnership for the Development of Human Resources in Rural SUBASTA (2016) PO Financing for Subasta Integrated Farmers Multi-Purpose Cooperative:
Areas, 29 January 2016, 15 pages. Community Midterm/Endline Report. Prepared by Philippine Partnership for the Development of
Human Resources in Rural Areas, 1 September 2016, 16 pages
MAGIRCO (2016) Quantitative Analysis (Partial). Submitted by University of Mindanao, 6 February,
34 pages. SPFTC: Qualitative Study (31 December 2016). Submitted by NEXUS, 28 pages.

Midterm/Endline Report of PEF Social Enterprise Project with DIWAGRIMPCO (15 February 2016). University of San Carlos, Center for Social Research and Education (2014). Final Report: Community
Prepared by Insight Asia Research Group (Phils.), Inc., 39 pages. Baseline Study to Measure the Household Impacts of Social Enterprises. Submitted to the
Knowledge Management and Communications Unit, Peace and Equity Foundation, Inc.
Midterm/Endline Report of PEF Social Enterprise Project with INSOL (13 December 2016). Prepared
by Insight Asia Research Group (Phils.), Inc., 73 pages

Midterm/Endline Report of PEF Social Enterprise Project with MUAD (13 December 2016). Prepared
by Insight Asia Research Group (Phils.), Inc., 74 pages

Midterm/Endline Report of PEF Social Enterprise Project with NATRIPAL (15 February 2016).
Prepared by Insight Asia Research Group (Phils.), Inc., 79 pages

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Writers/Editors
Jose Ibarra Angeles
Anna Amalia Brillante
John Joseph Coronel
Marie Antonette Reyes

Graphics and Layout

Ryan G. Palacol

Illustration
Nico N. Encarnacion

Production Team
Communication and
Planning Support Unit
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