Wanted: A law on social enterprises

What law is there in the Philippines that promotes and protects the businesses of the poor or enterprises for the marginalized, and what we generally call social enterprises? There is still no social enterprise-specific legislation yet in the country.

Without any legislation passed in their favor, social enterprises remain “informal settlers” with no targeted and innstitutionalized support - incentives and benefits - from the government. Bills that called for the passage of the Social Enterprises law have remained in the back burner. For more than a decade, Congress has placed in abeyance the enactment of a law to help empower social enterprises in the country.

If I remember right, House Bill 6085, called the Magna Carta for Social Enterprises as part of the poverty reduction program during the 15th Congress, only made it to second reading. Senate Bill numbers 97, 536, 583, 782, 1041, and 1441 promoting social enterprises with people with low incomes as primary stakeholders, are still in cold storage. If passed into a meaningful law, it might as well be the government’s flagship anti-poverty program instead of the relief, short-term based 4Ps dole-out monthly cash program of the Department of Social Welfare and Development (DSWD).

The DTI, then under Secretary Ramon Lopez, submitted its comments on SB 105 and 820 to the Chair of the Committee on Trade, Commerce, and Entrepreneurship, Sen. Koko Pimentel. Lopez cited another RA 10693 or the Microfinance NGOs Act, which was similar to the social enterprise’s bill in their “charitable, non-profit primary purpose.” But, as studies show, they may have similar features, but social enterprises, have shown, in practice, a unique life of their own.

Many seemingly insurmoutable challenges for social enterprises starting up in the Philippines include a lack of resources and access to capital, high operating costs, and a challenging regulatory environment. Lack of infrastructure and resources: Every new business venture requires financial, technological and technical support. Social entrepreneurs lack necessary skills to generate financing, such as utilizing projects to gain resources. A law specific to providing all the essential support would help significantly overcome these barriers and bring poor Filipinos out of poverty. That, by itself is a tall order. But, if there’s a will, there is a way.

Social Enterprises empower the poor.

As I mentioned in my past columns, social enterprises, as people-managed and centered on revenue-generating businesses that address social problems as part of their core activities, show how to beat extreme want and deprivation. Around the world, social enterprises with all-out government support have proven to help empower poor people as trailblazing pathways against poverty. Most low-income people would undoubtedly benefit from the legislation to allow for an enabling environment and support programs from the state.

If passed, the proposed law would provide incentives and benefits, including access to capital and other forms of financing, tax exemptions, marketing assistance, research and systems development, and preferential treatment of social enterprises in government procurement, among others. The bill also grants incentives to start-up social enterprises employing persons with disabilities and puts preference for livelihood promoting gender equality. More importantly, for a predominantly backward and agricultural country like the Philippines, the proposed law would prioritize the marginalized sectors especially the farmers, in the value chain and promotion of green economy, mobilize people to actively participate in reducing poverty as active producers and managers. Social enterprises include cooperatives, agricultural associations, microfinance institutions, and foundations, among others. Social enterprises engaged in manufacturing? It may be a crucial step towards a comprehensive approach to socio-economic reforms in the country and a path towards industrialization and self-reliance.

Tabang Bikol Movement has embarked on a social enterprises development (SED) project for Bicol with the Mariners Polytechnic Colleges Foundation as the lead HEI and the Central Bicol State University (CBSUA) with a grant from the Commission on Higher Education (CHEd). The two-year SED program with CHEd hopes to develop a relevant framework of social entrepreneurship for disaster survivors. It also endeavors to benchmark and replicate success stories in the communities and form part of the school curriculum from the grade school. SED activities should be people and mission-centered while creating revenues for its workers and enterprises, participative and empowering, community-based, gender-responsive, and integrated with the development programs. For disaster-prone Bicol, cutting-edge themes should be DRRM, social protection, peace and good governance.

Studies from the Institute for Social Entrepreneurship in Asia show that the Philippines has more than 30,000 social enterprises. Millions of poor Filipinos will benefit if an enabling law is passed with its support mechanisms. During the Pandemic, the country saw many enterprising Filipinos from all walks of life increasingly engaged in businesses with a social purpose not just for profit. They create jobs, wealth and help improve people’s lives.

TBM joins the call for Philippine Congress to prioritize the social enterprise legislation. The success of social enterprises where majority of the poor and vulnerable communities would hopefully benefit, is the success of everyone. If well crafted, planned, and implemented, the Social Enterprises law could help achieve the Sustainable Development Goals of zero poverty, zero hunger, reduced inequality, gender-responsive for resilient and sustainable communities.