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Never too Small for Hope – Part II (Transport and Logistics)

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Respondent: Jhun Rodriguez / Resident of Quezon City- Tricycle Driver

Jhun Rodriquez’s day would start with morning commuters in Quezon City. He is one of 4.5 million drivers across the country who have left their vehicles in garages until quarantine conditions are lifted. Jhun has put a ‘Family Use – Private’ sign on his tricycle, “We are only allowed to use it for business purposes and personal family needs.” The lockdown has banned tricycle drivers from passenger transport since March 15, 2020. “I attempted to take my tricycle the day after the lockdown. The authorities had warned me that it would be impounded. My tricycle is leased so I did not want to take the risk.”

The rent for the tricycle is P200 per day. Jhun had previously earned enough to support the family of 11, “I would usually earn up to P24,000 a month.” Support comes from the family during the worst disasters. Jhun was able to rely on his brother when tropical storm Ondoy ravaged the city in 2009, “My brother is too old to work now so it is my turn to ensure his well-being. I do not have enough money to start a business and our savings have gone towards food and medicine.” Jhun and his brother’s family only eat lugaw, a rice porridge, most of the time. “Eating the same meal every day becomes really difficult for the children. I assure them that when I am able to resume working, we will eat like we used to again.”

The city was distributing P2,000 for tricycle drivers which Jhun was unable to collect, “I believe it is because my house is far from the collection point. The local government did provide us with rice and sardines on two occasions. We have also received grocery items from Gawad Kalinga.” Local organizations have become the most dynamic advocates during the pandemic.

Jhun’s tricycle has become an unexpected business tool: “I was able to borrow P5,000 from my friend and I used the money to buy and sell fish.” He uses the tricycle to take his supply to the local market. “Everyday kindness keeps me optimistic. My customers don’t haggle for lower prices and some do not even ask for their change. It has allowed me to pay back the loan within a week.” Jhun usually buys 20 kilograms of fish and was able to make a profit of P600 per day. Matters have gotten worse since the total lockdown has restricted him from selling at the marketplace.

Respondent: Edwin Cawit / Resident of Lagao, General Santos City – Food delivery service

The onset of social distancing and isolation steadily witnessed a decline in Edwin Cawit’s food delivery service, “We started to feel the effects of COVID-19 in the second week of March when many of our clients canceled their previous orders. Our services came to an immediate halt as of March 18. I understand that safety measures are necessary but the indefinite timelines put us in a dilemma.” His business was growing with profits of P60,000 to P80,000 a month. Although food delivery services make up a small portion of the industry, it has witnessed a steady increase with an expansion of 7.3% between 2016-2017.

Edwin’s passion project has always been on the plates, “I started the business after years of savings because I wanted to be my own manager and operator. Cooking meals was always a family affair so it was a natural career move. I am able to cope because I do not have to compensate for any employee’s salaries.” Edwin has savings to sustain his family but the uncertainty remains a concern. “The only way to prevent fines or penalties was the ‘wait-and-see’ option at the beginning of the lockdown. We listen to and follow updates from our local news outlets and social media pages. We are very careful because our services involve people’s consumption.”Inflation of necessary supplies during a disaster event makes business continuity an even greater challenge. Edwin’s main concern is procuring inventory, “We pick up essential ingredients from outside the local area because of lack of availability. The city’s clustering policy during the lockdown prevents vendors from sourcing some of the vegetables we need from Bukidnon.” The scarcity in supply and increase in price has forced Edwin to shut down despite being able to operate under COVID-19 safety guidelines. “The price of vegetables has inflated by 20 to 30%. Rice and grains have only gone up 10%. However, these cumulative prices make it impractical to continue operations.” The emerging caterer hopes that small businesses will receive the aid they need to carry on after the restriction, “We would appreciate logistical support, availability of supplies from the National Capital Region and other key cities, tax relief, and easing of local cluster market restrictions.”

Respondent: Shirly Erum / Lagao, General Santos City – Driving Instructor

Shirly Erum’s classroom is the road of General Santos City- “I believe that driving is in our blood. Five out of our nine family members are driving instructors.” The school of driving can be a promising career as instructors make an average of P235,451 annually. The number of students started to slow down in March. “We no longer have enrollees because of the transportation restrictions. Physical distancing also makes it impossible to hold practical sessions.” They would offer three package deals – a five day tutorial for P2,800, seven days for P3,800, or a monthly package between P10,000 to P20,000. Keeping their office is the biggest challenge, “Our maintenance cost fluctuates between P5,000 to P10,000 and the rental fee for the office is P7,000. We have used our savings to continue paying the rent and any vehicle maintenance that was necessary.” Shirly also has to consider the family expenses, “My sister works in Hong Kong and has sent us remittance of P20,000 during the lockdown. We were able to use the money for four months of household expenses. If we can resume operations soon, we would only need P5,000 to start functioning again.”

Respondent: Giselle Pastrano / Resident of Cebu City – Self-service Car Wash Business

The Pastranos anticipated that 2020 would be a year of new beginnings and opportunities. Giselle and Arnold welcomed a new baby, Arnold, in April. They had also opened a new business to provide for their growing family. Transforming their garage in front of their home as optimal for starting their venture. Giselle would be able to take care of her family and work, “Our space was large enough to situate a self-service car wash and food stall. We would earn around P9,000 to P12,000 from the car wash and P16,000 to P18,000 from the food stall.” Both businesses had minimal expenses because they were run by Giselle and Arnold, “We would spend P1,000 to P1,500 that was mostly for the water bill. The expenses for the food stall were P9,000 a month. The profits were more than enough to cover the P7,000 we would need for the household.”

They had only been operating for a month when they decided to shut down. Giselle’s immediate concern was her family’s safety, “Our business is in front of the house. Customers coming in and out expose my family. Compromising their health is never an option.” She also has a seven-year older son, Travis, who is currently unable to attend school. The food & beverage industry is expected to reach $415 million by 2024. Food stalls are becoming more popular as the younger generations opt to eat out. “Many of our ingredients have gone up by 40% to 50%. Our regular customers shared the same concerns and we started seeing a decline in customers when the lockdown started.” Commuter restrictions eventually led them to cease operations of the car wash. Multiple income-generating opportunities are a proven solution for many small businesses to sustain their needs. The COVID-19 restrictions have limited these prospects to entrepreneurs. Giselle currently works as a cashier for a university. It is the only stable income for the household. The lack of earnings has forced her to take loans, “My husband has a van that he would use for delivery operations. He would regularly work for Lazada but that has also stopped since March.” Loss of revenue sources has multifold consequences for microentrepreneurs. “We have lost around P19,000 a month since the lockdown. We also had an SUV that we would rent out through the Grab app. Unfortunately, we had to give it back to the dealership because we were unable to cover the monthly payment or the driver’s salary.”

At APP, we focus on the vulnerable sectors of our society in our development initiatives. MSMEs are among the priority sectors of our national chapter, Philippine Preparedness Partnership’s (PHILPREP) and its targets in local program activities. PHILPREP has developed these case stories to amplify the voices on the ground, especially during the COVID-19 pandemic. It seeks to amplify human stories to raise awareness on how disasters affect the most vulnerable communities.

For Part I of the series, click here.

This article was developed in partnership with the Asian Preparedness Partnership (APP). More information about APP may be found using this link: Asia Preparedness Partnership (APP).

Almost 4 in 10 nanoenterprises bounce back to pre-pandemic level

Update 10: SEDPI Rapid community assessment on the impact of COVID-19 to nanoenterprises

Two months after the government started easing lockdowns in most parts of the country, 36% of nanoenterprises reported to have bounced back to pre-pandemic level. In May, only 18% expected to bounce back within one month which may be a good sign of recovery if the spread of the virus is contained.

Nanoenterprise (NE) is a SEDPI-coined term that refers to unregistered livelihoods of self-employed individuals. They typically operate informal businesses alone or with the help of unpaid family members targeting their own immediate local communities.

Status of nanoenterprises

Those that bounced back report that they are already able to earn about the same income; and experience normal demand to their products and services. For the month of June, there were twice as many nanoenterprises reporting slowdown in sales compared to those that reported strong demand.

Access to supply on inputs needed to operate their livelihoods remain stable.

Financing options

Nanoenterprises typically access loans from informal sources which make them vulnerable to predatory financing practices. Most of them borrow money from cooperatives, rural banks, microfinance NGOs and pawnshops.

On average, nanoenterprises borrow a small sum of money ranging from PhP3,000 to PhP10,000 to finance their livelihoods such as sari-sari stores, carinderia, farmers, fisherfolks, dressmaking and vending. Microfinance institutions offer collateral-free loans to them payable in three to six months with interest rates ranging from 2% to 5% per month.

With microenterprises cautious on demand, they prefer not to access loans. Only two of three of those who finished their loans opted to renew their for another cycle. This is also a sign that nanoenterprise have the ability to weigh risks and returns.

For the month of June, when normal loan collections resumed, one in three nanoenterprises was able to repay in accordance with amortizations based on the Bayanihan Act’s loan deferment schedule. A majority are requesting for up to two months additional grace period to allow them more time to adjust and cope with the new normal.

Essential financial service to low income group

There are approximately 8 million low income households that access microfinance services in the Philippines. MFIs are frontliners in the delivery of financial services to low income groups who find it difficult to open deposit accounts and access loans from commercial banks.

SEDPI estimates that a PhP40B economic assistance to nanoenterprises channeled through MFIs will address their financing needs to jumpstart their livelihoods. This is based on 8 milion estimated number of microenterprises and PhP5,000 economic assistance package.

The proposed Philippine economic stimulus package contains a total of PhP245 billion budget to assist micro, small and medium enterprises. Only a small fraction of this is expected to reach nanoenterprises.

Prioritizing nanoenterprises

The negative impact of COVID-19 to nanoenterprises is undeniable. The research shows that nanoenterprises are showing positive signs of bouncing back faster.

Preferential option to those at the bottom of the pyramid should be extended first since these groups can bounce back quickly; only need a small amount of stimulus; will reduce need for cash dole outs; and will reach millions of Filipino low income households.

Note:

The research is part of a series of rapid community assessments that determines the economic impact of COVID-19 to microenterprises and the informal sector. SEDPI, a microfinance institution (MFI), conducted the survey from June 23-30 with 5,791 respondents located in Agusan del Sur and Surigao del Sur.

It is not a representative sample of the entire Philippines. It is highly localized but should be a good case study that reflects the situation in the countryside. SEDPI believes that the nationwide experience may not be far from our research results.

Previous updates:

The titles are hyperlinked. Click on the titles to full read article online.

• June 12 (Update 9): Microenterprises show signs of bouncing back as lockdown eases
• May 28 (Update 8): 8 out of 10 microenterprises open for business one month after GCQ
• May 22 (Update 7): Demand for microenterprise products remain weak amid COVID pandemic
• May 15 (Update 6): Demand slumps on microenterprise products 2 weeks after GCQ
May 8 (Update 5): Only 5% of microenterprises back to “normal” in first week of GCQ
• April 30 (Update 4): Two in three microenterprises hopeful to bounce back two months after lockdow – UPDATE 4
• April 24 (Update 3): Community assessment and recommendations for support to microenterprises and the informal sector during and after COVID-19 – UPDATE 3
• April 14 (Update 2): Community assessment and recommendations for support to microenterprises and the informal sector during and after COVID-19 – UPDATE 2
• April 6 (Update 1): Community assessment and recommendations for support to microenterprises and the informal sector during and after COVID-19 – UPDATE 1
• March 30: Immediate impact of COVID-19 lockdown to microenterprises

Plight of Microentrepreneurs in the Philippines Part 1 of 3 Sari-sari Stores

Never too Small for Hope- Part I

Doing business is largely a family affair in the Philippines – 80% of enterprises are family-owned or family-controlled. Microenterprises are the most intimate and the most common of these businesses. Nine of out of 10 MSMEs in the Philippines are microenterprises. Their kinship is the most deep-rooted because members of the community build these businesses around local needs.

Strength comes in numbers. Being small and having few employees put microenterprises in the most disadvantageous position. Most microenterprises are cottage industries, typically employing only family members. They are comprised of one to nine members and the very few largest ones have $6,000 in assets.

The Philippines is one of the countries with the highest economic damages as a result of disasters, having an Average Annual Economic Loss (AAL) of $284 million. Financial deficits hit the smallest enterprises the most. Economic losses have a ripple effect that magnifies and multiplies the challenges, especially for microenterprises. The COVID-19 pandemic has introduced lockdowns that prolong the hardships for many of these businesses.

The first part of our series explores the most inherent microenterprise in the Philippines. The sari-sari stores (mom and pop shops) are built into the DNA of every neighborhood and block across the national landscape. There are over 1.3 million sari-sari stores in the Philippines and 94% of consumers depend on them for everyday necessities.

Monalisa Maiquez, 41, Resident of Sta. Maria Kalamasig, Sultan Kudarat

Monalisa is the breadwinner in her family. It is a role that keeps her committed to maintaining her sari-sari store during the lockdown period. She lives with her brother, sister-in-law, and their two kids.

The family of five depends on local government assistance since the community quarantine that started on March 16, 2020, “We have received relief goods four times since the lockdown started. The local government unit of Kalamansig provided five kilograms of rice, two cans of sardines, three packs of instant noodles, 250 grams of sugar, and one pack of instant coffee.”

These rations are essential as Monalia’s revenue has been cut in half since the lockdown, “We would invest P8,000 to P10,000 every week for a profit of P1,000 to P1,500. We are only able to buy up to P5,000 of supplies for the store and our profits do not reach more than P500 weekly.” Her profits barely cover the P2,500 to P3,000 for household expenses.

Mobility restrictions introduce new obstacles for businesses as they lack supplies from the shortage of stocks. Monalisa is currently limited in procuring supplies, “I would travel to the market depending on what I needed. Now I am only allowed to make these trips once a week. We are also constrained to the number of purchasable items. For example, each business owner can only buy six-packs of instant noodles and six cans of sardine.”

Any form of financial assistance would promote the sustainability of Monalisa’s shop, “I have never experienced such a blow to my daily operations. I would need about P15,000 to recover. The business income is siphoned into funding our daily needs making savings nearly impossible.”

Mary Jane Selecia, 41, Resident of Tinungkaan, Maguindanao

The subsidy in income only reminds Mary Jane that her household needs to cut corners – “My shop is bringing in one-third of the profit. I would earn around P4,000 and now I am fortunate if I make P1,000 a week. We invest P3,000 a week to keep the store running.” She lives with her husband and five children. Their daily expenses come to P9,000 per month and were previously covered from the sari-sari store’s profits.

Borrowing money is becoming a vicious cycle for Mary Jane, “We have no savings and the income we make for our businesses go towards repaying our loans from relatives and friends. It seems like we are borrowing to pay over and over again.” Relief information is even more scarce when in the remote mountainous areas like Tinungkaan. The interventions in Mary Jane’s town were constrained to the Department of Social Welfare and Development (DSWD) conducting a survey to determine the poorest population in the village.

Mary Jane’s husband works as a Barangay Secretary and his work became an unexpected lifeline, “We did not need to apply for the Social Amelioration Program (SAP) because of my husband’s job. We are also beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).” The SAP has given qualified families P5,000 to P8,000 per month for two months. “We bought one sack of rice. The remaining money is additional capital for our store.”

Her family’s coping mechanism is in her backyard, “Our alternative sources of income are planting vegetables and raising farm animals. The small farm supports us while providing us with food. We are often forced to consume supplies from the sari-sari store.” Stock in her store is already limited because of dwindling supply in Noro, where she buys her supplies. Transportation cost for each of the trips to Noro is now P100, which is an exacerbated cost during the lockdown.

Everyday expenses have become a challenge for her community, “There is a decline in sales because many of our neighbors and customers do not have work. I fear that we may have to shut down if this continues. I would feel more hopeful if I had P10,000 to replace the needed inventory.”

Marcia Mangubat, 53 years old, Resident of Tinagacan, General Santos City

The Mangubats are a persevering matriarch. Marcia Mangubat lives with her mother and two daughters. She runs her sari-sari store and the household with the mantra, “Maningkamot nalang gyud ta na mabuhi (we will work hard to survive).” The pandemic is no exception to this mind frame. Marcia’s store is the only source of income as her daughters look for jobs.

General Santos City is still under a curfew to prevent the spread of infections. Marcia makes sure that her family obeys the rules while trying to carry on with daily life, “The new regulations include wearing a mask whenever one steps out of the house. The first offense is a P3,000 penalty. The following offenses can lead to one-month imprisonment.”

She understands that safety measures are necessary and adapting to the challenges is the only way forward: “I go to the market myself to buy all of my supplies from the market at the center of the city. I would go at least once or twice a week. The lockdown conditions have led me to make this trip every two weeks.” The supply shortage has decreased Marcia’s revenue from P4,000 per day to P1,500. Her current profits do not cover the P7,000 she needs for the monthly household expenses.

The small bench and table for tea at the corner of Marcia’s shop is vacant these days. She has not experienced such a sales decline in 11 years, “I have been a member of Tinagacan Agrarian Reform Beneficiary Cooperative (TARBC) for six years so I was able to withdraw a savings amount of P5,000. I am afraid that I may reach a point where I will have to withdraw more of my savings.” TARBC teaches small business owners like Marica about how they can apply and access loans as well as create a savings scheme.

The local government has distributed rice, noodles, and canned goods to families like Marcia’s. It is one of the many sources of hope Marcia holds, “The supplies from the store sometimes meet our daily needs. I start the day grateful that all of us are in good health.”

Alejandra Cinco, 56, Resident of Lanao del Sur

Cassava was imported from Latin America through the Manilla Galleons over 400 years ago. It has become a staple across the Philippines since then. For Alejandra Cinco, the vegetable is a saving grace during the lockdown, “We grow cassava on our farm and I make homemade cakes to sell. Our harvest is not selling as much. I purchase sugar and the other ingredients for P100 and sell the cakes for P200. The cakes are the only profit I make some days.”

The virus outbreak may not affect everyone’s health but it deprives many of their basic needs. “I was able to stretch P20,000 towards household needs during the first month of the lockdown. The expenses included the P3,000 I need for asthma medication every two months. We have reduced our investment in the sari-sari store from P1,500 to P1,000 or P500. Buying food for our family is the top priority.”

Alejandra and her husband are housing her mother-in-law, brother-in-law, daughter, and two of their grandchildren during the lockdown period. The additions have raised her household expenses from P6,000 to P11,000 – “We have cut costs wherever we can. My husband delivers cassava to the Malabang area. He earns P700 per trip. I have started to accompany him during these trips to buy some of my supplies at competitive prices.”

Alejandra’s husband was the only one issued a quarantine pass when security measures were taken in April. She became unable to buy supplies from her local vendor: “I was referred to another grocery store but the prices were much higher. Our store sells basic goods such as sugar, coffee, soap, canned foods, and snacks. Some of these items have gone up to P10 more than before. It forces us to retail them at a higher price and lose the already dwindling number of customers.”

The higher prices and limited supplies have taken a toll on everyday operations. “I would have P500 to P1,000 in sales every day. Now I am fortunate if I make P300 on certain days,” states Alejandra.

She currently relies on her savings and one of her children for support, “My son lives in Cebu City and has sent financial support through the remittance center in the Malabang area. We are fortunate that he is able to provide a portion of his salary.”

This article was developed in partnership with the Asian Preparedness Partnership (APP). More information about APP may be found using this link: Asia Preparedness Partnership (APP).

ARBOs Remain Covid-free

Agrarian Reform Beneficiary Organizations (ARBO) in Sarangani, Sultan Kudarat, Maguindanao, and Lanao del Sur Provinces remain covid free. This is the result of the ARBO covid-19 quick assessment conducted by SEDPI on April 20-24, 2020.

While some ARBOs have completely stopped operations, 36% or ten (10) out of twenty-eight (28) participating ARBOs continue to provide services to farmers in their communities. These services include irrigation, farm machinery rental, catfish culture, animal dispersal, and farm monitoring.

ARBO farmer members still manage their individual farms. However, due to the strict implementation of the community quarantine, senior citizen farmers are unable to do so.

Pambansang Mananalon, Mag-uuma, Magbabaul, Magsasakang Pilipinas, Inc. Farmers Association (P4MP-FA) of Upper Katungal in Tacurong City, reported that they have temporarily stopped their microfinance services since members failed to pay their dues due to the lockdown. At the same time, the farmers’ economic activity is put on hold because of restrictions in selling produce and other goods in the market.

One ARBO in Sarangani, Alkikan Vegetables Growers Association (ALVEGA), continues to consolidate vegetables funnelling it to a local bagsakan and a huge grocery in General Santos City. On the other hand, Upper Biangan Farmers Association (UBFA) who offers micro insurance services has twice provided relief goods and cash assistance to their members. Only three (3) of the twenty-eight (28) ARBOs have received assistance as an organization from their local barangay and municipal government.

During this quarantine period, some ARBO members in Cotabato, Maguindanao, and Lanao del Sur have volunteered in the Bantay Covid initiatives of their barangays by manning border outposts.

Position Paper on Section 3.01 of the IRR of RA 11469 Section 4 (aa)

The COVID-19 pandemic continues to pose serious threats to health and has already disrupted the economy. This prompted the government to enact Republic Act No. 11469 otherwise known as the “Bayanihan to Heal As One Act,” declaring a state of national emergency in order respond to the urgent needs of the people.

It is in response to this urgent need and call that the Ateneo-SEDPI Microfinance Capacity Building Program (Ateneo-SEDPI MCBP) recognizes our role in aiding government to promote and protect the interests of the Filipino people, especially low income groups, in these challenging times. For the past 14 years, Ateneo-SEDPI MCBP provided training, research and consulting services to more than 2,000 microfinance institutions in the Philippines with a combined outreach of 10 million low income households.

SEDPI invests in 15 cooperatives and microfinance NGOs nationwide. It also directly provides financial services to more than 8,000 low income households in Mindanao. SEDPI works in partnership with Pag-IBIG, Social Security System, Land Bank of the Philippines and Development Bank of the Philippines to bring social protection and welfare services closer to low income groups.

Remaining true to our vision and mission, we commit to do our moral and lawful duty to provide a “grace period” for the loans of our microfinance clients.

In Section 4 (aa) of RA 11469, the law directs:

“ . . . all banks, quasi-banks, financing companies, lending companies, and other financial institutions, public and private, including the Government Service Insurance System, Social Security System and Pag-IBIG Fund, to implement a minimum of a thirty (30)-day grace period for the payment of all loans, including but not limited to salary, personal, housing, and motor vehicle loans, as well as credit card payments, falling due within the period of the enhanced Community Quarantine without incurring interests, penalties, fees, or other charges. Persons with multiple loans shall likewise be given the minimum thirty (30)-day grace period for every loan . . . ”

However, we noticed an inconsistency with the implementing rules and regulation (IRR) of RA 11469. In Section 3.01 of the IRR of RA 11469 where “Mandatory Grace Period” was discussed, it states that:

“ . . All Covered Institutions shall implement a 30-day grace period for all loans with principal and/or interest falling due within the ECQ Period without incurring interest on interest, penalties, fees and other charges. The initial 30-day grace period shall automatically be extended if the ECQ period is extended by the President of the Republic of the Philippines pursuant to his emergency powers under the Bayanihan to Heal as One Act . . . [emphasis added]”

The text of RA 11469 clearly provides in Section 4 (aa) that all loans falling due within the period of the enhanced community quarantine shall not incur interests, penalties, fees, or other charges. This provision of the law was not adhered to by the IRR when it said that “ . . . All Covered Institutions shall implement a 30-day grace period for all loans with principal and/or interest falling due within the ECQ Period without incurring interest on interest, penalties, fees and other charges . . .” [emphasis added]

Prohibiting financial institutions to impose “interest on interest” is far different from prohibiting them to impose “interest” on loans. The IRR provides that financial institutions are only mandated to cancel the additional interest that may be imposed due to late payment of the loan. This is different from what the law really provides which mandates financial institutions to totally cancel the interest of the loan for the duration of the quarantine period.

Many of our clients who have loans (microcredit) with us used this to finance their livelihood. In a community assessment we conducted on March 31, 2020, 40% of our members completely stopped their lovelihoods and another 40% reported weakened livelihoods. We were not able to reach the remaining 20% because they live in places where cellphone signal could not reach them.

This is why we, in the microfinance industry, applaud RA 11469 for canceling the interest of loans during the duration of the quarantine. In fact, as early as March 15, 2020 we already declared a moratorium on loan repayments to our clients. This means that interest on these loans for the quarantine period will not be charged.

However, if the IRR will be implemented, only “interest on interest” will be canceled and not the whole “interest” of loans during the quarantine period. This will create a huge problem for MFIs since most access loans through commercial banks. If the IRR will be implemented, MFIs will still have to pay the interest on loans from commercial banks even if MFIs already canceled the interest on the loans of our clients.

With the current IRR, MFIs will bear the brunt of the cost of interest which may endanger their financial sustainability. There is also a good chance that this interest will be passed on eventually to microfinance clients who are already bearing the biggest impact of the pandemic.

With this, we strongly urge the concerned agencies of our government – Bangko Sentral ng Pilipinas, Department of Finance and Securities and Exchange Commission – to review the IRR of RA 11469. We would like to the IRR to follow the spirit of RA 11469. Hence, we call for the revision of Section 3.01 of the IRR of RA 11469 for it to remain true to the provision of Section 4 (aa) of RA 11469.

We hope that this matter will be resolved soon. The spirit and purpose of the Bayanihan to Heal as One Act must be genuinely upheld. We call for the government to completely prohibit interest charging on loans during the enhanced community quarantine.

It is our fervent hope that this crisis will be put to an end soon. MFIs will remain a partner of the Filipino people in securing their livelihood, health, and safety all throughout this challenging times until we are able stand up again as a strong and progressive nation.

Thank you very much and may God bless our country.

In the spirit of Bayanihan and in service of the Filipino people.

Promoting social investments: Ateneo and SEDPI conducts training of trainers for social investors

Ateneo and SEDPI reached another milestone in their partnership with the implementation of a training of trainers program that aims to develop trainers to promote social investments. Social investments are investments that generate profits as well as social and environmental gains.

The training of trainers for social investors was held in different major cities around the world: Milan, Rome, Dubai, Abu Dhabi, Tokyo, Singapore, Doha, Madrid, and Barcelona. A total of 223 participants attended the training.

To be certified, participants must be able to provide at least 80 hours of volunteer work, participate in social investments and must be financially stable. This is to ensure that trainers on social investments practice what they preach and have a wealth of experience they can share during conduct of trainings.

All those who pre-qualified to attend the training of trainers for social investments program were given a scholarship since the registration fee of PhP25,000 was waived. Participants only shared rhe cost of the venue, materials and meals during the training which amounted to USD70.

Those who will be able to fulfull the requirements of the program will receive certification from the Ateneo de Manila University and will also have the opportunity to become accredited as one of SEDPI’s pool of trainers for social investments.

“The training of trainers for social investors is SEDPI’s way of combating investment scams and also provide alternative investment products to the public,” Vince Rapisura, SEDPI President said. “It is our hope that social investing becomes the standard practice in generating wealth,” he added.

SEDPI and Ateneo looks forward to mount more training of trainers worldwide that will reach beyond the Filipino community.

SEDPI management staff undergo knowledge and skills upgrade

In order to deliver its programs to eradicate poverty, SEDPI continues to invest in its people that emabke them to deliver excellence-driven and innovative products and services.

Foray in socialized housing

One of the major programs of SEDPI is socialized housing that aims to provide affordable and disaster-resilient houses to low income groups. It’s President, Vince Rapisura and Rez Oafallas, admunistrative manager attended a course on real estate and construction management with the Urban Planning Institute held at the Asian Institute of Management.

The course provides basic knowledge in managing housing projects to SEDPI which aims to build at least 100 socialized houses by 2021.

Strengthening AMLA compliance

The administrative staff of received a training on the Anti-Money Laundering Act (AMLA). This is a very important training as it plays a huge role in preserving the integrity of the staff, especially that the job in SEDPI requires the staff to frequently deal with financial transactions.

Policies and procedures were developed, based on learning from the training, to ensure that all transactions are above board and are compliant with government rules and regulations.

Shift from microfinance to social finance

Last June 2019, SEDPI president Vince Rapisura and CEO Dimples Sacdalan-Pateño went on study visits to Italy and United Arab Emirates for the technical assistance and support to the micro-finance sub-component of the Italian Agrarian Reform Community Development Support Program (IARCDSP).

They underwent advanced training for the project specifically on guarantees, agricultural financing in Italy and Islamic finance in the UAE. These trainings were instrumental for SEDPI to transform its microfinance operations to social finance.

Social finance utilizes cost plus through joint ventures that prohibits compounding of interest as well as excessive penalties. SEDPI views its clients as partners in development and should therefore be given rewards and incentives for good performance; and a clear path for recovery and behavioral change if they become delinquent.

Innovations on pro-poor financial service delivery

SEDPI’s staff in Mindanao were given trainings on character and capacity-based lending, basic accounting delinquency management, ethical financing, product design and development and fundamentals and principles of microfinance. The series of trainings were intended to ensure that only pro-poor advice and services on money management are extended to projects in the area.

The organization currently provides capacity building interventions to agrarian reform beneficiary organizations (ARBOs) in Lanao del Sur, Maguindanao, Sarangani and Sultan Kudarat. Direct pro-poor financial services are extended in the provinces of Agusan del Sur and Surigao del Sur where 7 branches of SEDPI operate.

Onboarding with Pag-IBIG and SSS

With SEDPI inking of partnership with SSS and Pag-IBIG, series of onboarding training and orientations wert conducted to its management staff in Agusan del Sur and Surigao del Sur. This is to ensure that proper information reach SEDPI end clients and to ensure that quality services are delivered.

Disability awareness

With the aim to increase sensitivity and awareness on the plight of persons with disability, management staff received disability awareness training from Humanity and Inclusion.

Moving forward

As SEDPI further expands to deliver social finance and serve more development organizations, it will continue investing in its people. It treats its people as one of the key ingredients to success.

SEDPI inks partnership with SSS to bring social safety nets to low income groups

“SEDPI believes that the marginalized sector should be the first to enjoy the benefits of government services,” Vince Rapisura, SEDPI President, said in a statement on the occasion of its Memorandum of Agreement signing with Social Security System (SSS). “Our partnership with SSS will realize this so that low income groups will benefit fron social safety nets of the government,” he added.

Social Security System (SSS), a government-owned and controlled corporation, provides social security protection to all self-employed persons and other qualified Filipino workers against hazards of disability, sickness, maternity, old age, death and other contingencies. On May 2019, SSS signed a memorandum of agreement with SEDPI to intensify the coverage of workers in the informal sector. SEDPI is now accredited and authorized to receive and screen non-collection and collection related transactions for SSS.

Members and their families are now provided easy and convenient access to SSS services through SEDPI. Previously, the service is extended only regular and associate members of SEDPI, as well as their family members, who are at the same time self-employed or voluntary members of the SSS. With the agreement, non-SEDPI members can now also course their voluntary contributions to SSS through SEDPI since it is an authorized collection agent of the institution.

SSS promotion thru SWePP

The Social Welfare Protection Program (SWePP) is the consolidated market-based and indigenous microinsurance and social security program of SEDPI which aims to provide security and financial safety net to members through adoption of various insurance schemes. With the agreement making SEDPI a collection agent, SSS now becomes one of the social security programs under SWePP. Through SWePP, SSS is further promoted to communities and individuals.

Membership to SWePP is open to Filipinos of legal age. Interested individuals should fill up an application form to become SEDPI members. Once filled up, SWePP services could be offered to them. The forms are available online or in SEDPI offices. These are also available during SWePP orientation programs in community gatherings and events of SEDP..

SEDPI members who avail of SWePP may course their voluntary contributions to SSS through SEDPI. It will also assist members in processing claims or benefits from SSS.

SSS promotion to Overseas Filipino Workers (OFWs)

As part of SEDPI’s commitment to promote SSS to marginalized sectors, the organization conducted training events with SSS representatives locally and abroad. Approximately 1,500 microenterprises attended training events promoting SSS in Agusan del Sur and Surigao del Sur. Abroad, around 2,230 participants, mostly domestic helpers, attended training events promoting SSS in Macau, Abu Dhabi, Dubai Doha, Bahrain, Egypt and Singapore. Recently, a series of trainings promoting SSS was held in different countries including Bahrain, Qatar, South Korea, Egypt, Spain, and Switzerland, where around 1,730 OFWs attended.

Most of the events abroad were in collaboration with the Philippine embassies, consulates, Philippine Overseas Labor Office (POLO) and Overseas Worker Welfare Administration (OWWA). The events became an opportunity to encourage Filipinos to patronize SSS and realize the benefits it offers.

Milestones and prospects on SEDPI’s partnership with SSS

At present, more than 800 individuals are registered with SSS thru SEDPI. Their contributions amount to more than PhP390,000.

Last June 2019, SEDPI conducted a training among its staff on the implementation of its SSS service. Targets on SSS registration were also set during the training.

SEDPI looks forward to register and make its members, especially OFWs and microenterprises, to become active members of SSS. With its 8,500 member microentrepreneurs and 500 member OFWs, it plans to register at least 3,000 of these member-clients and investors to remit a total of PhP1.0 million in contributions 2020.

Shelter for all: SEDPI partners with Pag-IBIG Fund to benefit more micro-entrepreneurs

“SEDPI’s partnership with Pag-IBIG Fund is a step closer to the organization’s vision of financial empowerment and financial inclusion for Filipinos,” Vince Rapisura, SEDPI President said when asked how the partneship is relevant to nation building.

The organization’s members consist of self-employed individuals in the informal sector with need for improved social protection and access to decent and affordable housing. This led SEDPI to agree to act as the conduit through which Pag-IBIG Fund membership shall be provided to its members.

“With this collaboration, decent and affordable housing is now reachable to all SEDPI members who belong to low income groups in Agusan del Sur and Surigao del Sur, two of the poorest provinces in the Philippines,” Vince Rapisura added.

Home Development Mutual Fund more popularly known as Pag-IBIG fund seeks to improve the quality of life of Filipinos by providing them sufficient shelter, an integrated nationwide provident savings, and housing through the mobilization of funds for shelter finance. It is mandatory for all Filipinos with monthly income of at least PhP1,000 to become Pag-IBIG Fund members. In addition, it is not only for formally-employed but also for self-employed and those from the informal sector.

SEDPI recognizes the value of Pag-IBIG Fund membership and the benefits of savings and home financing it provides for its members. Moreover. Pag-IBIG Fund and SEDPI agreed to jointly work in providing Pag-IBIG Fund membership for the self-employed members of SEDPI towards providing them access to provident savings and decent and affordable shelter financing through Pag-IBIG Fund’s programs.

Information dissemination

Since the agreement has been in place, Pag-IBIG Fund and SEDPI have been assisting each other in disseminating information and increasing awareness on the benefits of Pag-IBIG Fund membership. Pag-IBIG Fund has rendered orientations for the members, personnel and officers of SEDPI and has provided information materials such as leaflets, posters, tarpaulins, audio-visual presentation files and similar items on Pag-IBIG Fund membership and benefits.

SEDPI, on the other hand, displayed tarpaulins, posters and leaflets on Pag-IBIG Fund membership and benefits in conspicuous areas of its units and areas. It distributed and made available Pag-IBIG Fund program leaflets during its regular meetings and provided a timeslot in its meetings for the playing of audio-visual presentations on Pag-IBIG Fund membership and benefits, whenever feasible. SEDPI also made its own promotional materials for Pag-IBIG membership, which comes in various forms — articles, videos, etc.

Pag-IBIG also became part of SEDPi’s Social Welfare Protection Program (SWePP), a consolidated microinsurance and social security program which aims to provide security and financial safety net to members through adoption of various insurance schemes.

Interested members must fill out the SWePP application form at the SEDPI MF office or during SWePP orientation programs in community gatherings and events. SWePP with Pag-IBIG is available to SEDPI members who are existing Pag-IBIG members.

SEDPI conducted training events to promote Pag-IBIG locally and abroad. In partnership with Pag-IBIG Fund, approximately 1,500 microenterprises attended the events promoting Pag-IBIG in Agusan del Sur and Surigao del Sur. Abroad, 2.230 participants, mostly domestic helpers, attended financial literacy training that promotes Pag-IBIG in Macau, Singapore, Bahrain, Qatar and United Arab Emirates. The events became an opportunity to encourage Filipinos to patronize Pag-IBIG and realize the benefits it offers.

Registration and membership

Pag-IBIG Fund and SEDPI also assisted each other in the membership registration of SEDPI’s members to Pag-IBIG Fund. To facilitate this, Pag-IBIG Fund trained SEDPI’s authorized representatives in the membership registration process and conducted membership registration for SEDPI’s members.

In the agreement, Pag-IBIG Fund is to provide SEDPI members of their statement of membership savings (contributions) which include their contributions and the corresponding dividends earned annually.

Pilot housing project

A very exciting part of this partnership between SEDPI and Pag-IBIG Fund is the pilot housing project. SEDPI shall undertake a pilot housing project to benefit qualified SEDPI members. SEDPI shall provide or identify land that can be developed as its housing project for its member-beneficiaries capable of paying housing loan amortizations and who possess good moral character.

SEDPI will identify qualified members based on eligibility requirements provided in the Pag-IBIG Fund’s housing loan program and enter into a collection servicing agreement with Pag-IBIG Fund for the collection of the monthly housing loan amortization of the member-beneficiaries.

For its part, Pag-IBIG Fund shall extend individual housing loan to qualified SEDPI member-beneficiaries of the proposed housing project. It shall also enter into a collection servicing agreement with SEDPI for the collection of the monthly housing loan amortization of their member-beneficiaries and assist SEDPI in coordinating with other key shelter agencies for the successful implementation of the proposed housing project.

In 2019, SEDPI already procures a small lot in Rosario, Agusan del Sur that will serve as the pilot site. It is cureently undergoing negotiation for another lot in municipality of Veruela in the same province.

Advantages of the partnership

For those with maximum monthly compensation of PhP5,000, monthly savings with Pag-IBIG Fund is PhP100. With the partnership between SEDPI and Pag-IBIG Fund, however, members of both institutions only need to pay PhP20 per month or PhP5 per week. Contributions are paid during weekly group meetings held within the barangay where the members live; it saves them costs in visiting the nearest Pag-IBIG Fund branch, which is one town away, at best.

As members, they gain access to Pag-ibig Funds affordable housing program. This gives them the opportunity to avail housing loan as much as PhP450,000 with only 3% interest per annum. This loan amount will already give them enough funds for purchase of lot or house and lot, house construction, or home improvement which can be paid up to thirty (30) years.

Milestones and prospects

At present, SEDPI was able to register more than 2,500 member-beneficiaries with contributions amounting to around PhP400,000. SEDPI has now also already submitted several applications from its members for the availment of various Pag-IBIG benefits.

With the continued support of Pag-IBIG Fund, SEDPI anticipates more of its members and even non-members to be encouraged to become member of both Pag-IBIG and SEDPI. The organization looks forward to more microentrepreneurs benefiting from the programs of Pag-IBIG Fund.

SEDPI partners with ACSent to promote social entrepreneurship nationwide

In 2019, Social Enterprise Development Partnerships, Inc. (SEDPI) and Ateneo Center for Social Entrepreneurship (ACSEnt) mounted series of events to fulfill their partbership agreement to promote social entrepreneurship in the Philippines.

SE Clinics with PwC

SEDPI and ACSent partnered with Isla Lipana & Co. Price Waterhouse Coopers Philippines (PwC) to conduct social impact clinics in key cities in Manila, Cebu, and Davao.

Small business owners, students and faculty members participated in the clinics. SEDPI and ACSent partnered with University of San Carlos which hosted the event on January 11, 2019. Ateneo de Davao was tapped for the Davao leg which was held on January 25, 2019. ACSent, located in Ateneo de Manila University, hosted the last leg held in Manila on February 22, 2019.

The event provided venue for those running an enterprise or wanting to get involved to access expert advice on social entrepreneurshio and network with other entrepreneurs.

Vince Rapisura, a lecturer from Ateneo de Manila University (ADMU) and president of Social Enterprise Development Partnerships, Inc. (SEDPI) was the lead facilitator of the events. A personal finance expert and social entrepreneurship specialist, he discussed social entrepreneurship, resource mobilization, and business strategies.

Ana Tan, Director of ACSEnt presented the social enterprise landscape during the clinics. Other resource speakers were Mr. Allan Cao, Mr. Dennis Bautista, and Ms. Rose Dale Ando from Isla Lipana & Co., Price Waterhouse Coopers Philippines. They shared their expertise on taxation, governance and compliance. They also provided tips on pitching and presenting in order to win investors.

Study and cultural visits for Singaporean students

ACSEnt hosted students from Ngee Ann Polytechnic of Singapore who were on a study and cultural visit to the Philippines. Vince Rapisura shared his experience and rigor on social enterprise development.

Social entrrprise conversations

In an effort to bring together social enterprise practitioners in the country, SEDPI and ACSent pioneered social enterprise conversations. The event is envisioned to be a venue where important topics and issues concerning social enterprise development could be discussed and shared.

For its first offering held last September 30, 2019., Anna Meloto-Wilk of Human Nature,. Reese Fernandez-Ruiz of Rags2Riches, and Vince Rapisura of SEDPI shared challenges they faced as social entrepreneurs. They detailed out the struggles they faced behind the awards they recieved in the past decade.

Deepening social enterprise practice in the Philippines

SEDPI looks forward to more collaboratioba with ACSent in delivering valuable discussions and expanding engagements on social entrepreneurship. Both organizations believe that social entreprneurship should be the standard of doing business in the Philippines so that development objectives and financial sustainability are achieved and mutually reinforce each other.