Filipino CEOs challenged to make meaningful impact
Rafael Lopa, the executive director of the Philippine Business for Social Progress, believes that presidents and chief executives of corporations need to change their philanthropic strategies and scale up their contribution to make an impact on poverty reduction in the Philippines.
“We in PBSP feel we need to make a shift in how we encourage companies to look at how their philanthropy can be more strategic and a lot of these has to do with shaping a common agenda, not only among the business sector but also the other stakeholders of social change,” Lopa says in a recent roundtable discussion at the Bayleaf Intramuros Hotel in Manila.
Lopa is the man in charge of running PBSP, a social foundation composed of 252 member companies that has a P2.2-billion budget for the current fiscal year, covering October 2014 to September 2015. This year, PBSP is switching to a new strategy that highlights collective efforts.
A graduate of the Ateneo de Manila University with a degree in AB Interdisciplinary Studies, Lopa says PBSP now believes that companies should adopt a common approach against poverty, instead of taking individual strides that may overlap each other’s initiatives.
He says companies that benefit from the country’s rapid economic growth of 6 percent to 7 percent in recent quarters can do more to help address poverty. “We have been experiencing high growth rates averaging 6 to 7 percent, but the continuing challenge is how to make the growth more inclusive,” he says.
“The challenge as we see as PBSP is how we engage the companies in the Philippines, being the NGO of Philippine business. We have 252 companies to date that are part of PBSP. How do we engage the business sector in general to really revisit the role that business plays in society, especially in so far as poverty alleviation is concerned,” Lopa says.
PBSP was established in 1970 by 50 business executives, including Washington Sycip, Sixto Roxas, Howard Dee and Bienvenido Tan. The original founders agreed to donate 1 percent of their net income before tax to finance the operation of the foundation. This has not been the case lately, with PBSP sourcing nearly 90 percent of its funds from international donor agencies.
Today, PBSP is overseen by a 21-member board of trustees chaired by Manuel Pangilinan of Philippine Long Distance Telephone Co. Paul Dominguez of Sarangani Agricultural Co. Inc. is the vice chairman while Ramon del Rosario Jr. of Phinma Inc. serves as the treasurer.
About 60 percent of PBSP members are major companies while 40 percent are small and medium enterprises. As of January 2014, membership contribution reached only P26.7 million, with most of the P2.2-billion budget coming from international grants and aid.
PBSP seeks to uplift the lives of Filipinos through social development programs that focus on health, education, environment and livelihood and enterprise development. It encourages the business community to integrate corporate social responsibility practices into their core businesses and advocates for the application of business strategies in addressing poverty.
“When you look back at what we have been doing in PBSP, it looks like we need to scale up the kind of philanthropic work that these companies have been doing all these years,” says Lopa.
“When we say scale up, we need to revisit the strategy of how philanthropy is done in the country. Much of what we see as a challenge is really how we collectivize the philanthropic efforts, because all these years, we have managed thousands of projects, both from the member companies and non-members,” he says.
“Most of these projects have been done in isolation of each other, of course yielding isolated impacts in the process. But the challenge of isolated impact initiatives is that they don’t add up to addressing the bigger problem that we are trying to address,” Lopa says.
“The scale of the solutions don’t match up with the scale of the problem. The rate of the problem increasing is not directly proportional to the scale of solutions,” he says.
Lopa says it is important to look at the problems in a more systemic way “rather than looking at it in specific projects, that are actually small or single components of a larger systemic problem, whether education, health, environmental protection, climate change as well as livelihood and jobs generation.”
“Social problems are very complex problems that require coordinated multiple interventions that will allow these systemic problems to be addressed,” he says.
Lopa says extreme poverty, in particular, remains a critical challenge in the Philippines, based on a report by the Asian Development Bank.
He says 7.3 percent of the 100 million population are multi-dimensionally poor while an additional 12.2 percent are near multi-dimensional poverty, based on the Philippines’ Multidimensional Poverty Index.
Fishermen, farmers and children remain the poorest basic sectors, according to the Philippine Statistics Authority July 2014 report, with poverty incidence at 39.2 percent, 38.3 percent and 35.2 percent, respectively.
PBSP cites the need to support the cause of poverty eradication as the country joined the observance of the International Day for the Eradication of Poverty on Oct. 17.
Lopa says PBSP realizes the need for a concerted effort from the business sector and government to scale up its campaign for this purpose. “It is imperative for the private sector to come together to solve it using their various expertise and new strategic approaches and solutions. Only then can we truly make more substantial contributions in eradicating poverty in the country,” he says.
He says PBSP launched an inclusive business imperative campaign as a nationwide advocacy to promote and adopt inclusive business as a core business activity that embraces the poor within the company’s value chain as suppliers, distributors, consumers or employees in such a manner that creates shared value.
“PBSP is now gearing towards strategic partnerships that will develop and implement new models, technologies and innovative ways of creating sustainable communities. Through this, I believe we can continue to achieve what our founding members have envisioned PBSP to be—a force for change and an effective bridge of the business community to society,” says Lopa.
He says PBSP has the capability to help companies make more meaningful contribution.
“It makes sense to work with groups that can make things happen,” he says.