From the News! – Your Daily News

Niceto Poblador
INQUIRER.net

ENTREPRENEURSHIP HAS long been regarded as an essential ingredient of economic development, especially in emerging markets. I fully agree. This observation is especially true in today’s innovation-driven “new economy.”

But I have some misgivings about certain commonly held views regarding entrepreneurship and by extension, entrepreneurship development.

My question is: What form should entrepreneurship take in today’s increasingly complex, fast-paced and highly interconnected knowledge world?

Entrepreneurs are traditionally assumed to possess certain distinguishing personal attributes. In his speech at the Annual MAP International CEO Conference held in Makati on Oct. 7, 2008, Fred Uytengsu, president and CEO of Alaska Milk, and Filipino Entrepreneur of the Year in 2006, listed five characteristics of entrepreneurial individuals: Vision, innovativeness, perseverance, passion, and focus.

Another frequently mentioned common characteristic of entrepreneurs is their willingness to take reasonable risks. In his introduction to “Extraordinary Stories for Aspiring Leaders,” a volume published by the Management Association of the Philippines in 2007, Vic Magdaraog adds two other traits that set entrepreneurial individuals apart from others: unwavering integrity and big egos.

Laudable traits

While all of these are laudable traits in any individual, they do have their downside. Being passionate about a vision and pursuing a goal with single-minded determination might for instance divert a would-be entrepreneur’s attention from what’s going on outside their immediate fields of vision. This drawback is particularly serious in a world characterized by relentless and unpredictable change, where even the most creative and innovative ideas have very short life spans and alternative opportunities come and go with alarming frequency. Also, if not handled “correctly,” big egos can backfire by turning off potentially innovative and productive individuals in the same work setting.

Moreover, while these are truly admirable traits, seldom, if at all, are they found in a single individual. To combine the required complementary traits together into a single production unit, it is necessary to bring several individuals together. This leads us to another question: Is entrepreneurship an individual initiative or a group effort?

The prevailing view seems to apply the term ‘entrepreneurial’ to individuals rather than to groups of individuals that comprise a team or an organization.

This is where I part ways with conventional wisdom.

The key point I want to stress is that in today’s knowledge-driven world, individual entrepreneurial skills have ceased to be the important determinants of business success that they used to be under more placid circumstances. In today’s world, organizational characteristics have assumed far greater importance.

In the knowledge economy, value is the outcome of the collaborative effort of networked individuals. Rarely is it the result of the initiative of a single person. To use a metaphor from Formula One racing, Lewis Hamilton’s feat on the track is less the result of his proven driving skills than they are of the collective effort of technical geniuses at McLaren and the skillful task execution at the pit stops.

Iconic leader

Arguably the most iconic innovator of all times is Steve Jobs, with whom we associate such innovative products as Apple II, the iPod, the iPhone, The Incredibles, and many more geeky products. The truth of the matter is that, for all the glitzy events marked by speeches and photo ops at one product launch after the other, Steve Jobs did not pull off these feats single-handedly. He was part of a team of highly creative individuals working together in an organizational environment conducive to knowledge sharing. By the same token, it was neither Larry Page nor Sergey Brin but the Google organization that gave us the world’s most widely used search engine, Google Earth, Google Map and many more cool web applications.

It is common knowledge that the success rate of entrepreneurial endeavors in the Philippines is very low. One possible reason, to quote DOST’s Fortunato Dela Peña, is that “only 15 percent of our entrepreneurs use innovative technology. We are too good at copying and adapting. We still have to do a lot to develop a culture of innovation.”

Culture, of course, is an organizational attribute, not an individual trait. To my mind, such a culture is the main factor behind the success of such knowledge organizations as Genentech, P&G, Google, and PLDT. These organizations amply demonstrate that in the knowledge-driven world, value is created through continuous learning, adaptation and innovation.

Even when successful, the innovation process does not end with one great product or process. Entrepreneurship is a continuing process. It requires organization culture and process that can sustain continuous innovation.

Coming up with a bright idea, a piece of creative work, or a practical gizmo is one thing. Developing a feasible “value proposition” and successfully bringing this to market is quite another. These steps require yet another set of skills and capabilities. All the more is networking necessary.

The current buzz word is “collaborative entrepreneurship” (CE), a term which I think captures my major point, that entrepreneurship today involves not one but a large number of networked individuals and organizations willing to share their complementary resources. CEs are communities of networked individuals who share an open culture, and through whose interaction with one another (often in social networks) enable them to continue to come up with innovative and creative ideas.

Implications

These developments have important implications on entrepreneurship development which I think should now lay greater emphasis on enhancing organizational competencies and the required support systems, rather than on developing the usual individual skills, values and attitudes.

The author is an active academic and a knowledge management consultant. Feedback at map@globelines.com.ph. For previous articles, please visit map.org.ph

Manila Times

Microsoft Philippines announced the availability of NGO Connection, an online resource specifically for nongovernment organizations (NGOs) around the globe—designed to help the NGOs to be equipped in various aspects of management, marketing and other critical tools for development work.

NGO Connection is a virtual workspace rich in technology resources for NGOs and its primary goal is to provide a convenient one-stop portal that meets the technology and networking needs of NGOs, according to Microsoft.

Microsoft has partnered with other organizations like the Education department and Philippine Business for Social Progress for its program to empower local organizations through IT.

Moreover, the company has also partnered with NGOs to provide Information Technology (IT) skills training to underserved community, such as Overseas Workers Welfare Administration. Also with Visayan Forum Foundation that has currently trained more than 6,000 people through its project, “Stop Trafficking and Exploitation of People Through Unlimited Potential, or Step Up.”

Prior to the launch of the portal, Microsoft also organized a one-day workshop dubbed as “Microsoft NGO Day,” giving NGOs the chance to appreciate technology and practical knowledge as its best.

“Once a year we hold ‘Microsoft NGO Day’ providing with additional information that we hope will help the organizations,” said Rafael “Pepeng” Rollan, managing director for Microsoft Philippines.

Among the speakers during the event include: Ma. Cecilia Flores-Oebanda of Visayan Forum Foundation Inc., a private and a non-profit NGO working for the welfare of marginalized migrants, domestic workers, and traffic women and children; Danilo Songco of PinoyME Foundation, an organization caters to smaller microfinance institutions.

– Cris-Ann Odronia

Chupsie Medina
INQUIRER.net

MANILA, Philippines — Next to having your own company website, the “in” thing now is to be part of an SME business networking site, a take-off from successful social networking sites like Facebook.com, Friendster.com, MySpace.com, Multiply.com, and LiveJournal.com.

This is exactly how SME Solutions, Inc., an IT-enabling company owned by Planters Development Bank, envisioned Bizster.com.ph to be. Still in its beta mode, Bizster has attracted already over 200 members and subscribers after just two months in cyberspace.

This early, Russelle Trinidad, SME Solutions’ sales and marketing head, says that a number of their network participants are already realizing benefits from logging in and using the Bizster site.

Just recently, Edwin Que of Winspire Marketing, a fledging importer and retailer of oral care products, signed up for SME Solutions to design his company’s website after noticing some visible exposure from his Bizster posting.

Like most social networking links, participation in Bizster is for free. SME owners need not spend a single centavo to have their profiles including a gallery of photos uploaded.

Should the Bizster member want its own website, SME Solutions is capable of designing for a modest fee of P8,000 per year hosted in the sme.com.ph site; add P4,000, and SME Solutions would register a unique domain name for the company. “It’s a graduation of sorts,” Trinidad says, when a Bizster decides to expand its web-based marketing and advertising playground.

Bizster now gets 20,000 to 40,000 hits per day, says Trinidad, from about 12,000 unique visitors every month. Still a far cry from vastly popular social networks, but encouraging enough for the Planters bank subsidiary formed in 2000 whose mission is to help Filipino entrepreneurs use information and communications technology as a tool in enhancing their business.

The Bizster home page gives the reader a quick view of new members that have signed up. The professional and clean look was designed to make one linger and explore featured products or services. Members are classified in terms of what they offer or promote.

SME.com.ph, the brand name that SME Solutions supports, had been through some teething pains during its first three years, a period where the company was “testing the waters,” said Trinidad. Last year, the company broke even, and things are looking upbeat this year.

“SME.com.ph is now ranked as among the 20 most popular business networking sites in the country. And we aren’t doing too poorly in the world’s ranking,” says Trinidad. They have so far more than 150 websites for members.

Aside from designing web sites for its members, SME.com.ph also offers resources and tools that would nurture SMEs to grow. The accounting and timekeeping software packages developed by the Planters Bank subsidiary allows for affordable financial and operational automation systems for most growing companies.

Trinidad says SME Solutions will soon be offering a payroll software tailor fitted to the unique Philippine labor market and its business operating environment. This would complete the basic suite of SME toolkits that most start-ups need when pushing for higher growth.

On the SME.com.ph site too is a section that matches people with business issues or queries with experts in the fields of human resource, franchising and business management. Advice is free and best of all, sensible.

GO NEGOSYO team
Philippine Star

Cecilia Cañalita knows from experience how harsh life can be. With the death of her mother at an early age and with eight other siblings, young Cecilia worked in the farm and sold goods at the market.

When she had her own family, Cecilia’s husband opted for early retirement because he was too weak to work after undergoing major surgery. Their hospital bills reached P137,000. They survived by borrowing money from relatives and neighbors.

Although 50-year-old Cecilia never finished her degree in chemical engineering, she was knowledgeable about weaning and raising piglets.

The key to raising piglets, she said, is to keep the piglet warm using a lamp when taken away from its mother. Heat from the lamp makes the piglet’s body more resistant to cold or any form of infection.

With the effective knowledge and skills, sufficient water supply and a starting capital provided by the Cebu Micro-Enterprise Development Foundation, Inc., Cecilia turned backyard hog-raising into a very profitable business.

With her success, Cecilia also started lending capital to her neighbors for raising piglets. She aims to meet the high demand for pork in the markets of Naga and Talisay City, especially during the Christmas season.

Cecilia’s merchandise store started out as a small sari-sari store beside their nipa hut. With the profits from her hog-raising business, she slowly added more merchandise. Cecilia’s neighbors are regular customers because her store sells goods at prices lower than other stores in their community. Today, the sari-sari store beside the nipa hut is now a merchandise store that stands beside a concrete house.

Looking back, Cecilia says she lived on the foundations of hard work and strong faith to carry her through those trying times. “Ang kakugi, duna jud kay ma-ani. Naanad man mi og kakugi aron mabuhi (If you work hard, you will earn. We survived because of hard work,)” she said.

As her way of showing gratitude, Cecilia holds a banquet every December at her home where all relatives and neighbors are invited. She says her business continues to thrive because she maintains good relations with clients and understands them when they are unable to pay.

These days, Cecilia divides her time between duties as a mother, wife, entrepreneur and public servant as the first councilwoman of Ilaya.

Keeping the vows

Imelda Alinsonorin is more than lucky to have a supportive husband by her side in the most trying times of her life. Discipline and earnest resolve in making a living not only kept their marriage intact but also put their lives in order.

Currently, her business endeavors – the cull chicken business and the general merchandise store – are both doing well and have, in fact, enabled them to stay together and not have to work abroad and leave their children behind.

Imelda believes that her main measure of success is being able to provide for their four children, three of whom are in school (her eldest is in college). Still, there are more years of work ahead, as her youngest has yet to reach proper schooling age. But this only inspires her to work harder.

If her past is any indication, it is that she is relentless in achieving her goals. There is nothing that would make her give up on her dreams.

Imelda was only 22 years old when she left her strife-torn hometown of Catbalogan in Western Samar and moved to Cebu. She stayed with her relatives and worked as a dressmaker for a clothing company, earning P10 for every pair of short pants she made. Imelda considered her first job literally “back-breaking,” having to finish more than 100 pairs every day to meet her needs. It was during this time when she met her husband, Aurelio.

When they got married, her husband worked as a laborer while she sold food items and general merchandise in the neighborhood to further augment their incomes.

Their big break came after her husband quit his job and decided to work in a poultry farm in his hometown in Pangdan, Naga. This incident turned out to be their window of opportunity for the cull chicken business. They bought live cull chicken from the poultry where he was working and sold them to retailers and direct customers, slowly learning the ropes of the business.

As business progressed, there came opportunities for expansion, but Imelda had to borrow capital from the Cebu Micro Enterprise Development Foundation Inc. (CMEDFI). She made sure to properly pay her dues on time. Currently, she avails herself of minimal loans, having learned discipline in handling finances.

Imelda believes that hard work and perseverance make any endeavor successful. She also acknowledges how having a business has changed their lives and made her relationship with her husband more fulfilling, as they have become partners not only in marriage but also in business.

Cecilia and Imelda will be two of the Most Inspiring Cebuano Micro Entrepreneurs to be honored on June 20 at the Go Negosyo sa Cebu, the latest leg of the continuing Go Negosyo campaign spearheaded by Presidential Consultant for Entrepreneurship Jose Concepcion III, at the Cebu International Convention Center.

Go Negosyo 2 is presented by the Philippine Center for Entrepreneurship in partnership with the Cebu Chamber of Commerce and Industry president Edward Gaisano, Cebu Go Negosyo chairman Jay Aldeguer, and Cebu Business Month 2008 chairman Tess Chan.

Go Negosyo sa Cebu will also be graced by Presidential Management Staff Director General Cerge Remonde, who heads the Inter-agency Committee helping the Micro SMEs. Member agencies will be present to reach out to the participants.

The Micro Finance Council of the Philippines, Bangko Sentral ng Pilipinas, Citigroup, Ramon Aboitiz Foundation Inc., Cebu Micro Entrepreneur Development Foundation Inc., and Taytay sa Kauswagan Inc. endorsed the awardees.

Go Negosyo sa Cebu is also made possible with partners PLDT SME Nation, Smart Communications, RFM Corp., San Miguel Corp., Condura, Ariel Detergents, Nokia, Splash Group of Companies, Banco de Oro, Vintel Logistics, Sterling Group of Companies, Lamoiyan Corp., and President Social Fund.

Fel V. Maragay
Manila Standard

Small entrepreneurs can now easily locate and communicate with government agencies that provide micro-financing for their business ventures, thanks to the wonders of text messaging.

President Gloria Macapagal Arroyo yesterday pushed the green button on the innovative scheme that made the location and contact numbers of government financing agencies just a text away.

The President launched the “Micro Asenso” Text Facility that made it easier for small and medium-sized businessmen to locate micro-financing centers right in their communities.

By pushing the green button, Mrs. Arroyo sent the template message that the more than 60,000 small entrepreneurs could text to Globe’s 2973 to get information on the P180-billion credit market available, via more than 3,000 micro-financing institutions.

To find an MFI in Metro Manila, the borrower should type the following message: “MICRO (space) FIND (space) NAME OF CITY” and send to 2973.

To find an MFI in the provinces, micro entrepreneurs could text the following message: “MICRO (space) FIND (space) NAME OF PROVINCE (comma) NAME OF TOWN” and send to 2973. Each text costs P2.50.

The President’s texted message located the MFI in Lubao, Pampanga—CB Pampanga in Barangay Sta. Cruz with telephone number (045) 860-1660 and (045) 963-0709.

Joining the launching of the Micro Asenso Text Facility were People’s Credit and Finance Corp. president Edgardo Generoso and Globe Telecom president Gerardo Ablaza.

The People’s Credit is the government’s lead agency for micro-finance services delivery, with the company president also acting as the chairman of the micro-finance program committee.

Also present was Presidential Management Staff chief Cerge Remonde, who gave an overview of the government’s micro-finance services. Remonde is Malacañang’s oversight officer for micro, small and medium entrepreneurship.

Mike Frialde
Philippine Star

The Supreme Court (SC) yesterday upheld the constitutionality of a provision of Republic Act 9257 or the Expanded Senior Citizens Act of 2003 giving senior citizens a 20 percent discount in the purchase of medicine.

In a 15-page decision penned by Associate Justice Adolfo Azcuna, the Court junked the petition filed by drugstores Carlos Superdrug Corp., Advance Drug, Botica de la Serna and Leyte Serv-Well Corp. seeking to declare Section 4 (a) of RA 9257 unconstitutional for constituting deprivation of property.

 The provision states that “senior citizens are entitled to 20 percent discount from all establishments relative to the utilization of transportation services, hotels and similar lodging establishments, restaurants and recreation centers and purchase of medicine anywhere in the country, the cost of which may be claimed by the private establishments concerned as tax credit.”

The drugstores argued that the provision violates Article III Section 1 of the Constitution which states that “no person shall be deprived of life, liberty, or property without due process of law, nor shall be denied of the equal protection of the laws.”

In addition, the drugstores further argued that the 20 percent discount on medicine violates the constitutional guarantee in Article XIII Section 11 that makes “essential goods, health and other social services available to all people at affordable cost.”

They contended that compelling drugstore owners and establishments to grant the discount will result in a loss of profit and capital since they impose a mark-up of only five to 10 percent on branded medicine.

The petitioners also noted that the law also failed to provide a scheme whereby drugstores would be justly compensated for the discount.

The petitioners further insisted that for every P1 in senior citizen discount that they give, 68 centavos would be shouldered by them and 32 centavos will be refunded by the government by way of tax deduction.

However, the Court said that what the petitioners are actually questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the 20 percent discount that they will extend to senior citizens.

The SC said the petitioners were referring to the opinion issued by the Department of Finance on July 10, 2004 on the query of the Drug Stores Association of the Philippines (DSAP) concerning the meaning of tax deduction under the Expanded Senior Citizens Act.

Based on the opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior citizens since the discount is treated as a deduction.

Under the scheme, the establishment concerned may claim the discounts as tax deduction from gross income, based on the net cost of goods or services rendered.

 In terms of foregone revenues, the government, according to the DOF, loses an amount equivalent to the marginal tax rate the establishment is liable to pay the government.

The amount, the DOF said, is equivalent to 32 percent of the 20 percent discount granted to the establishment while the latter shoulders the remaining portion of the granted discount.

 The Court admitted that the imposition of the 20 percent discount reduces the net income of the private companies concerned. But it also stressed that the State can impose on private establishments the burden of partly subsidizing a government program in order to promote the health and welfare of a special group of citizens.

The Court stressed that Republic Act 9257 is a legitimate exercise of a police power aimed at protecting the welfare of the country’s senior citizens.

“Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated,” the court said.

“Moreover, in the absence of evidence demonstrating alleged confiscatory (nature) of the provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor,” the SC declared.

The computation of the petitioners, according to the decision, was also erroneous as it was based on the assumption that their customers consisted wholly of senior citizens.The SC further explained that the 32 percent tax rate is to be imposed on income, not on the amount of the discount.

“It is unfair for petitioners to criticize the law because they cannot raise the prices of their medicine given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the mark-up at 5 percent… Inasmuch as pricing property right, petitioners cannot reproach the law for being oppressive, simply because they cannot afford to raise their prices for fear of losing their customers to competition,” the Court said.

By Manuel T. Cayon
Reporter

DAVAO CITY-Seven of Mindanao’s poor provinces crowd the list of 10 poorest provinces in the country, underpinning the slow development work or lack of attention to uplift the South.

The 2003 Official Poverty Statistics, the latest report on the country’s poverty situation posted by the National Statistical Coordination Board (NSCB), said Zamboanga del Norte in Western Mindanao was the country’s poorest, with poverty incidence of 64.6 percent.

The national incidence is 24 percent.

The province was joined on the blighted list by the other Mindanao provinces Maguindanao (60.4 percent), Surigao del Norte (54.5 percent), Agusan del Sur (52.8 percent), Surigao del Sur (48.6 percent), Misamis Occidental (48.1 percent) and Lanao del Norte (46.5 percent).

Poverty incidence refers to the proportion of families or individuals who have incomes lower than the poverty threshold, versus the total number of families or individuals of the same given province or area.

Region 9, or Western Mindanao and the Caraga Regions, have most of their provinces in the list. The Zamboanga peninsula has Zamboanga del Norte and Misamis Occidental on the list; only one of the four Caraga provinces, Agusan del Norte, was not on the list. This region is in the northeastern part of Mindanao and embraces the two Agusan provinces and the two Surigao provinces. The Dinagat Island group was poised to become Caraga’s fifth province.

The Mindanao lineup was broken only by Masbate, the third poorest with a poverty incidence of 55.9 percent, Mountain Province is in the No. 8 rung (46.7 percent) and Biliran Province, in the ninth rung (46.5 percent).

An improvement was shown by the Autonomous Region in Muslim Mindanao (ARMM), which has most of its five provinces and one city in previous editions of poverty lists. The region has only Maguindanao on the list now: its other provinces like Sulu, Tawi-Tawi, Basilan and Lanao del Sur having been pulled up from the cellar by the concentration of official development aid to the region.

Sulu used to be in the doldrums but its graduation from the list was already noticed in 2003 when the Mindanao Economic Development Council (Medco) came up with a situation report that year on Mindanao’s state of poverty and human security. Sulu graduated from the list in 2000, along with Lanao del Sur.

The ARMM could be an inspiration on how to draw up a resuscitation list to pull these provinces up. Medco cited the big contribution of the local chief executives and their decision to agree to put up transparent governance and accountability mechanisms.

The ODA factor has helped largely in putting up professional local government management. The ARMM obtained 46 percent of the total ODA funds going to Mindanao, with P1.325 billion in 2006.

The poverty list also indicated an improvement in the number of families living below poverty level, with about 124,000 families bailed out from very dire straits.

The NSCB said the statistics it culled last year showed that 24 in every 100 Filipino families “did not earn enough in 2003 to satisfy their basic food and nonfood requirement”. The NSCB said, however, that this was an improvement in 2000 when there were 28 families in every 100 families which suffered below the poverty threshold.

The agency said there was a 3.1-percent difference in the two study periods covered, 2000 and 2003, and would translate to 124,000 families.

The annual per capita poverty income threshold in 2003 was pegged at P12,309. The government has pegged this year’s household monthly income to reach P6,195 for a family of five.

Armando Bartolome
Manila Times

It could happen to anyone. You see an ad for a franchise, contact the company and, soon you are a franchisee! All goes well, then one day you realize your franchise business is failing and there is little you know to save it. What could be going wrong?

First of all, examine the business:

How is it failing? Knowing what the problem is will help you find the solution.

Assess your team’s strengths and weaknesses. Is everyone doing well at his or her role? What could be done differently or better?

Once you’ve tried to solve the problem internally but cannot conquer it, ask the help of your franchisor. For example, if the store sales are affected by construction work nearby or new competition, ask if you could move your store to a more viable location.

If you planning to be a franchisee, here are some tips that you do well to heed:

Know your strengths and weaknesses. Franchisees need to have skills in handling people, handling money and handling the business. Of course, you can hire people to do these things but you have to possess some level of business acumen to be successful.

Know your reasons. It is not enough to want to make money. You have to believe in the product and the brand, and have a passion for the type of business you are getting into.

Be ready to follow. Fran­chising is applying a proven system developed by the franchisor. Thus, this system must be followed to a tee for a franchisee to replicate the success of the original business. There is little room for innovation in a franchise system.

Be ready to work. Businesses that are regularly visited, even managed hands on by the franchisee have proven to be more successful. Owners can decide then and there how to adjust rules to make the customer have a better experience.

Choose carefully. Do not get blinded by sales gimmicks. Does the product or service have staying power? Does it fill a need? Also, be suspicious of franchises that can be bought for a song. If the franchisor does not value his brand and system that much, could there be much to it?

Pay attention to numbers. Have an accountant go over the franchise’s numbers with you. Be wary of those who promise a fast ROI. Make sure the experience of the company can back it up. Also, expenses do not stop at the franchise and investment fee – consider how much it costs to run the store as well as emergency expenses.

Observe the industry. Is the franchise you intend to buy in a growth industry or a sunset industry? Is the brand you intend to franchise a major player? How do you think the industry will develop in the next decade? Remember you are in this for at least five years!

Avoid culture shock. Examine the franchisors’ company culture. Do you have the same values as the company? Remember that you will deal with them on a regular basis. Strained relations will certainly affect how your franchise will perform.

Hope this helps!

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The Franchise Times is a public service project of the Association of Filipino Franchisers, Inc. (AFFI) and The Manila Times. This week’s contributor, Mr. Armando O. Bartolome is a founding member of AFFI and Chief Executive Officer of GMB Franchise Consultants. For feedback, please email editor@filfranchisers.com. For more info on AFFI, visit www.filfranchisers.com, call the AFFI Secretariat at 873-8144, or text AFFI to Smart 326.

Jefferson Antiporda
The Manila Times

THE Bayanihan Program of the government has generated some P58.5 million in savings since it started its operations in February 2003.

The savings were realized by the 4,436 Bayanihan centers organized in 622 local governments throughout the country under the Bayanihan Savings Replication Project of the Department of the Interior and Local Government.

DILG Secretary Angelo Reyes said the project is being implemented by the Bureau of Local Government Development as part of the antipoverty program of the Arroyo administration.

Under the Bayanihan scheme, groups of 20 to 30 people in a community voluntarily contribute their individual savings to a common fund from which members may borrow in case of emergency, unexpected expenses or to finance small businesses.

The DILG is promoting the program for replication in barangays especially in urban areas where residents need loans for personal or business purposes.

“The program gives people the opportunity to find alternative means of livelihood and improve economic development at the grassroots level.”

DILG records showed that Region 4-A posted the biggest savings with P11,693,016.91, followed by Metro Manila with P9,627,484.34 while the Caraga region generated P9,440,313.23.

Other areas that recorded huge savings were Central Visayas with P5,020,140.07; Region 4-B, P4,464,954.50; Eastern Visayas, P3,005,590.76; and West2ern Mindanao, P2,876,931.87.

DILG records showed that Cagayan Valley had P2,140,861.15; Western Visayas with P1,806,546.05; Bicol region with P1,464,954.00; Central Luzon with P1,144,818.49; Central Visayas with P941,200.50; Ilocos with P725,961.63; the CAR with P630,011.97; Western Mindanao with P626,093.97 and Northern Mindanao with P201,513.44.

Members are taught values formation that operates on trust, cooperation, mutual help, family values, moral recovery and biblical principles.

Alex V. Pal
Inquirer

DUMAGUETE CITY—A program designed to help debt-trapped provincial employees by buying out their loans from high-charging lending institutions and giving them lower interest rates through a cooperative, is failing.

This is because the employees went back to the lending institutions as soon as their debts were cleared.

“We can’t stop the employees from going back to the lending institutions because it’s their personal decision,” said lawyer Ismael Martinez, head of the Provincial General Services Office and chair of the Negros Oriental Provincial Employees Multi Purpose Cooperative (Nopemco).

The Nopemco had obtained a P1- million loan from the provincial government to be used for the loan buyout program to be given to the members at only seven-percent interest per annum.

Under the terms of the provincial board resolution, the loan to be given to the cooperative will buy out the outstanding loans of the cooperative members from lending institutions so they will no longer patronize the same.

About 90 cooperative members availed themselves of the loan buyout program as of July.

Martinez said the program almost threw the lending institutions out of business, forcing them to lower their interest rates from a high of 18 percent to only 12 percent per annum.

The lowered interest rates also enticed the employees to return to the lending agencies to seek additional loans. “Some employees are really desperate. They need money for urgent matters, such as for the hospitalization of family members,” Martinez said.

But a 12-percent interest, in addition to a four-percent service charge, does not necessarily come cheap. Computations done by cooperative officials revealed that one could only take a net amount of P29,000 out of a P40,000 loan.

This is because the interest for two years, as well as the service charge, is deducted from the amount that one intends to borrow.

There are about 400 Nopemco members out of the 1,500 employees of the provincial government.