Entrepreneurs seek to sustain spirit of social enterprise amid crises.

ON a long train ride inside a dark tunnel, it's best to have entrepreneurs as fellow passengers: they always hope to see the light at the end.

Hope is what many implementers of social enterprises latch on as the lockdown measures against the Covid-19 pandemic have brought the economy on a downhill journey.

Joey Bermudez, Adolf Aran Jr. and Abigail Mapua-Cabanilla

The economic and health crises has impinged on attempts to make development more inclusive; a slogan harped on since nations upheld the Millenium Development Goals (MDG).

Three years ago, Marife M. Ballesteros and Gilberto M. Llanto of the Philippine Institute on Development Studies (PIDS) have noted a resurgence of social enterprises, which some pundits also call as 'capitalists with a heart.'

Three years, hence, Ashoka Philippines Country Director Abigail Mapua-Cabanilla echoed the importance of social enterprises as the country still seeks solutions to address social inequalities that were further brought to fore by the crises.

'We remain to have the highest inequality rate in the Asean [Association of Southeast Asian Nations] region with 22 million Filipinos living below the poverty line,' Mapua-Cabanilla told the BusinessMirror.

She also noted that the country dropped three places on the World Economic Forum's Global Gender Gap Report for 2017 and grappled with a record-high inflation rate of 6.7 percent, 'even more magnified by the Covid-19 pandemic.'

More active

BALLESTEROS and Llanto wrote in their PIDS paper in 2017 that 'unlike traditional enterprises, social enterprises engage in for-profit activities with more active and deliberate action towards raising the quality of life of the vulnerable and marginalized communities.'

These companies also aim to profit but their business must have a social impact. According to Mapua, social enterprises also have a big opportunity to address development gaps and achieve the strategic vision set out by the National Economic and Development Authority (Neda) in line with the Sustainable Development Goals (SDGs).

In a study conducted by the British Council five years ago, the Philippines had 164,473 social enterprises, which constitute 17 percent of the 987,974 companies registered with the Securities and Exchange Commission (SESC).

Last year, the Asian Development Bank noted that social enterprises remain limited in size and scale, thus limiting its impact and profitability, due to critical gaps in the ecosystem infrastructure in the country like access to capital, innovative financial mechanisms to unlock additional capital, ecosystem knowledge of social enterprises and data on social enterprise impact.

This echoes Ballesteros's and Llantos's view that the policy environment in the country is yet unresponsive to the growth of social enterprises.'

Enough room

MAYBRIDGE Financial Chairman Joey A. Bermudez, social enterprises are not a new phenomenon in the Philippines. In fact, Bermudez said he had seen, several decades ago, numerous organizations striving to deliver social good in a commercially sustainable fashion.

Nevertheless, Bermudez emphasized that social enterprises are not a homogeneous lot. He noted a wide diversity among social enterprises in terms of organizational structure, business model, operating paradigm and governance.

'However, one can rightly say that social enterprise is a much tougher undertaking than ordinary commercial undertakings,' Bermudez told the BusinessMirror.

To develop and be sustainable, social enterprises need to be given enough room to grow and develop. Moreover, social entrepreneurs should also enjoy equal opportunities to prove they can be capable themselves in a level playing field.

Bermudez also pointed out that regulations should not serve as stumbling blocks in their development.

'The last thing they need is a Magna Carta for Social Enterprises. Invariably, whenever regulation is passed to deliver a benefit to any particular sector, that benefit is far outweighed by intrusive regulation.

'Probably the only regulation that social enterprises need is one that protects them from abuse of market power by the dominant players in the supply chain,' he added.

Restaurants, responses

COURAGE Asia President and Founder Adolf Aran Jr. told the BusinessMirror that social entrepreneurs are necessary as the Philippines is constantly challenged by crises, both man-made and natural causes.

'When the [enhanced community quarantine was imposed] last March, the economic impact on the MSMEs [micro, small...