PBSP pushes inclusive business to help Mindanao catch up

Source: Philippine Business for Social Progress

President Benigno Aquino III found a formidable ally in Philippine Business for Social Progress (PBSP) which promotes its Inclusive Business Imperative (IBI) campaign to reinforce his inclusive growth agenda.

During PBSP’s Mindanao Membership Meeting (MaMM) and Inclusive Agribusiness Launch last September 8 at the SMX Convention Center in Davao, the President urged businessmen to invest more in Mindanao, citing the region’s great potential in agriculture.

Aquino lauded PBSP for being the pioneer organization to initiate corporate social responsibility in the country. He underscored the invaluable role of the private sector not only in income generation but also as a partner of the government in promoting development.

“PBSP worked on a very realistic premise—that the success of business could not be divorced from the development of the communities in which they operate,” said the President in his speech during the MaMM.

The affair turned out to be a homecoming of sorts for Aquino whose first job was as an assistant to the executive director at PBSP.

PBSP was founded in December 1970 by 50 Filipino businessmen who vowed to help in social development by devoting a percentage of their annual profits for use by the organization to implement projects that help the poor. Now, PBSP is promoting IBI as a bolder move in engaging businesses in socio-economic development.

“Instead of viewing communities as mere locations for factories or markets for their products, PBSP and its partners sought to develop those communities into partners towards development,” Aquino said.

Inclusive Business is a core business activity within a company’s business strategy that incorporates the poor within the company’s value chain as suppliers, consumers, and distributors or as employees, in such a way that it creates shared value. Inclusive businesses achieve commercial financial returns, while addressing systematic problems of poverty and inclusive growth.

PBSP’s Mindanao Regional Committee headed by its chair, Mr. Paul G. Dominguez, and Mindanao Development Authority (MinDA) chair, Secretary Luwalhati Antonino signed a Memorandum of Understanding and together launched the Mindanao Inclusive Agribusiness Program to continue the private-public sectors partnership in community development.

“We see this as an opportunity for promoting inclusive growth in the countryside, particularly in Mindanao,” said Dominguez.

The goal of the program is to increase production, generate income and increase job opportunities, focusing on the region’s high value crops like coffee, cacao, palm oil, rubber, corn and seaweeds.

Aquino is confident that the program will help Mindanao which had been left behind in terms of economic growth, to catch up.

“The Mindanao Inclusive Agribusiness Program comes at an opportune time, as we seek to transform Mindanao from the Land of Promise to the Land of Promises Fulfilled,” he said.

At present, some companies are taking the lead in adopting Inclusive Business in Mindanao, with the help of PBSP. Among them are Nestle Philippines, Bali Oil Palm Produce Corporation and Kennemer Foods International.

The NESCAFE Plan is a global initiative by Nestle that promotes coffee farming as a more profitable and sustainable livelihood for many coffee-dependent communities. It has two programs in the Philippines: The Agronomy program and the Farmer Connect.
The Agronomy program aims to equip local farmers with the best available technologies and techniques to help them increase their harvest. The Farmer Connect, on the other hand, is a direct-buying system that encourages small farmers and small-scale intermediaries to sell their product directly to Nestle.

“We’ve opened the buying stations throughout the country. We have nine at the moment, and we have plans to open more so the farmer can then bring their crops to the buying stations. They would get paid on the day and on the world market price for coffee,” explained John Martin Miller, chairman and CEO of Nestle Philippines

In the Philippines, Nestle is the biggest buyer of Robusta coffee, which is the main ingredient needed to produce Nescafe. Now, 30 percent of its Robusta coffee comes from the local farmers. Nestle hopes to increase it to 75 percent by 2020.

Bali Oil Palm Produce Corporation invests on Palm oil production in Mindanao. It taps poor farmers as contract growers.

In the next five years, Bali Oil is aiming to develop contract growers in Region 10 with a minimum target collection of 45,000 hectares. In Bukidnon, it bats for a minimum target collection of 15,000 hectares while 30,000 hectares is expected in Misamis Oriental.

“To uplift the lives of poor farmers, we believe that we should have a holistic and integrated approach where all stakeholders participate in the program that promotes inclusive growth for farmers,” said Manuel G. Boniao, chairman of Bali Oil Palm Produce Corporation.

Kennemer Foods International Inc. (KFI) is a small-to-medium enterprise focused on the buying, processing and exporting of high quality cacao beans to global confectionaries such as Mars.

The company, which currently sources its fresh cacao beans from smallholder farmers, runs programs that provide support to farmers such as cacao seedlings, agri-technology and farming training, ongoing mentorship and supervision, post-harvest assistance, guaranteed sale and financing assistance programs.

“The benefits are significant for all partners. For us, it means that we can scale up our production, and if we continue on this pace, it means we can establish a cacao manufacturing plant,” said Simon Bakker, CEO and president, Kennemer Foods International.

President Aquino also emphasized in his speech the advantage of bringing the public and private sector together to create a positive output.
“If the public and private sectors remain committed to the same vision and if we maintain the synergy and trust that we have so far harnessed to bring about positive results, we can look forward to a Mindanao that will serve as a true convergence point of trade and opportunity, not only for the Philippines but also for our region,” said President Aquino.