DLSU Center for Business Research and Development (CBRD) Director Dr. Raymund Habaradas delivered his professorial chair lecture titled “What is absent in the PRESENT Bill? Why cash is not necessarily the answer to scaling social enterprises in the Philippines” on August 24, 2018 at the DLSU Faculty Center. Habaradas is the holder of the Doña Engracia Reyes Chair in Service Oriented Entrepreneurship.
During his lecture, Habaradas talked about the factors that contribute to the scaling of social enterprises in the Philippines, which he derived from several case studies he and his co-researchers have conducted under CBRD’s Social Enterprise Research Network (CBRD-SERN). According to him, organizational factors that contribute to successful scaling include business acumen, collaborative network, innovative product / service, and innovative business model; while the environmental factors are ecology of support, and competitive / market pressures.
Drawing insights from the experiences of local social enterprises, Habaradas identified possible improvements on Senate Bill No. 176, also known as the Poverty Reduction through Social Entrepreneurship (PRESENT) Act, which aims to support the growth of social enterprises in the Philippines. Sponsored by Senator Bam Aquino, the bill is being supported by the PRESENT Coalition, an alliance of various social entrepreneurs and advocates, which include academia and civil society. Mr. Gomer Padong, Development Cooperation and Advocacy Director of the Philippine Social Enterprise Network (PHILSEN), served as reactor.
The PRESENT Bill
While the PRESENT Bill addresses some important points such as the need to get social enterprises integrated in the value chain, there are some provisions (or the absence of relevant ones) that betray a lack of understanding of the mechanisms that result in the successful scaling of social enterprises or in the scaling of innovative solutions to social problems. Habaradas mentioned that the proposed law provides for the establishment of a social enterprise development fund, and also provides for special credit windows. He wonders, though, what makes these different from the credit facilities already made available by government financial institutions to micro-, small and medium enterprises (MSMEs), and which are not fully availed of anyway.
He also questioned the enforceability of certain provisions, such as the encouragement of local government units to collaborate with social enterprises, and the call for DepEd, TESDA, and CHED to “cause the integration of SE content and inclusion of SE courses in the curricula at all levels, especially at the secondary and tertiary levels.” He said that a more concrete mechanism must be in place to enforce these provisions.
To improve the PRESENT Bill, Habaradas recommended the following: (1) including provisions that will build cultural and social capital, rather than focusing on economic capital; (2) providing support to organizations that provide the platform for social enterprise development; (3) establishing mechanisms for effective cross-sector partnerships, (4) involving local government units in identifying problem areas with ‘neglected positive externalities’, and (5) removing certain provisions of the bill that are not enforceable.
Padong said that the PRESENT Bill is continuously evolving, and that revisions are still welcome at this point. Since the initial draft of the bill was formulated in 2012 by 47 social entrepreneurship practitioners, it underwent eight changes mainly due to transitions from one leader to another. Padong cites that the PRESENT Bill is different compared to legislation introduced in other countries in the sense that social entrepreneurship in the Philippines mostly focus on poverty reduction. This distinction, he adds, is what makes social enterprises in the Philippines unique. “We have a different framing of social enterprises here in the Philippines because a big portion of our population is poor,” he said.
One of the ways by which the PRESENT Bill can undergo further improvements is through a more thorough collaboration with the academe. Due to its dynamic nature, the social enterprise sector entails a more dynamic collaboration among the different sectors involved in the legislation process.
Habaradas’ lecture was organized by CBRD-SERN in collaboration with the Management and Organization Department.