While economic growth is persistently high in the last decade at around 6%, the country faces major challenges in providing productive employment, and adequate and affordable social services for the poor and low income population. About 26% of the Philippine population live below the national poverty line, and 63% are vulnerable to poverty with income less than $3 a day a person.
Inclusive growth is the new strategic objective for socio-economic development in the Philippines. For growth to be more inclusive companies need to create jobs and provide affordable services for the poor and low income population. However, while the private sector has been a key contributor to the economic boom in the Philippines, it has yet to fully realize its potential in creating shared value and impact for income groups below the $3 vulnerability line (the base of the income pyramid).
Inclusive businesses are for-profit enterprises whose core business includes the low income segment population in their value chain as consumers, suppliers, distributors or employees -- thereby addressing systemic problems of poverty in scale. Inclusive business companies can be large scale or small enterprises. They are mostly in the growth phase of their business and typically do not seek trade-offs between financial and social returns.
Inclusive business has recently gained further momentum in the Philippines:
- The Government of the Philippines is in the process to develop an inclusive business task force. This will serve as the government counterpart secretariat to develop relevant policies for inclusive business support, and to coordinate with the government agencies to facilitate implementation of inclusive business projects from the private sector. Concretely, an inclusive business agribusiness summit in Mindanao is now being organized - in cooperation with Philippine Business for Social Progress (PBSP) - around 5 commodity crops with the purpose to promote job creation through new private sector investments in Mindanao.
- PBSP, a business-led development foundation with 240 member companies, has taken the lead to promote inclusive business in the Philippines as a response to the inclusive growth agenda of the government.
- PBSP and ADB have engaged into a partnership to promote the inclusive business environment, and development agencies like CIDA (Canada), AusAID (Australia), and IFC (World Bank) showed interest to support this agenda.
- The League of Corporate Foundations (LCF) has already organized two events on inclusive business in 2013.
- Philippines companies showed interest in developing possible inclusive business deals in agro-processing, housing, education, and health. A vivid community of social enterprises and NGOs is actively promoting social innovations in various sectors.
- ADB has published a study on the market for Inclusive Business in the Philippines. The initial findings of the study was presented at the 1st Inclusive Business Forum on 26 November 2012.
The second Inclusive Business Forum for the Philippines will advance knowledge exchange on inclusive business, and provide a platform for companies to engage with investors on possible funding proposals.