• Phl firms mostly clueless on inclusive business
Majority of local companies are unaware and do not engage in inclusive business, citing government bureaucracy and existing regulatory environment as main constraints, a joint study by the Board of Investments (BOI) and the United Nations Development Programme (UNDP) showed.
The “Business+ Philippines” study released yesterday, which surveyed 223 local companies from more than 17 sectors, provided insights on the level of inclusiveness among Philippine firms today.
The study revealed that the current levels of awareness and engagement of local firms in inclusive business are low, as even those companies that exhibited inclusive business practices “were not aware that they were actually already doing it and they did not consider themselves inclusive businesses.”
In terms of the level of awareness of the inclusive business concept in the country, it showed that local companies had a mean score of 1.51 out of seven, where a score of one indicated “not aware at all.”
Based on the classification of the companies surveyed, social enterprises had the highest levels of inclusiveness, followed by large national companies, small and medium enterprises and multinational corporations, respectively.
“Inclusive business terminology is not very common in the business world in general. In some cases, companies which had already adopted inclusive business models did not consider themselves an inclusive business when asked, which points out an urgent need to close the gap in terms of the adopted terminology among different stakeholders,” the report said.
“The lack of awareness regarding their own practices in inclusivity can easily result in their not being able to go further with it and benefits not being maximized in terms of reaching the poor,” it added.
The study indicated that Philippine companies see the national and local government bureaucracy and the existing regulatory environment in the country as the most significant challenges in doing inclusive business.
“In general, in our scoring for competitiveness, the ease of doing business is something we really, really have to work on collectively as government,” Trade Assistant Secretary Felicitas Agoncillo-Reyes said in a briefing yesterday.
Inclusive business is a concept that offers an opportunity to not only generate profit but also help those at the base of the economic pyramid and thereby contribute to reducing poverty in the country, according to the BOI.
The report showed, however, that local companies, despite their low levels of awareness and engagement, thought that the situation could be improved by strengthening the inclusive business ecosystem through raising awareness, building capacity, encouraging collaboration and initiating certain policy interventions.
“It is quite significant to note that the low levels of awareness about the principles and terminology of inclusive business and especially its successful application might have served to increase the hesitation to adopt this new mindset and approach,” it said.
As for the companies who are already doing it, meanwhile, the report said they consider inclusive business models effective in helping them reach both their business and social goals.
“Although the Philippines experienced economic growth over the last few years, poverty and underemployment, especially among the youth, remain significant issues. Inclusive business models can help in making those at the bottom of the economic pyramid become part of and really benefit from the growth process. Inclusive Business offers opportunities to go beyond traditional business models to ensure both commercial success and social impacts.” UNDP Philippines country director Titon Mitra said.
“It is our hope that our respective initiatives on inclusive business align with these recommendations and seek to complement the government’s thrust to reduce poverty by including the small community enterprises in the formal economy,” Agoncillo-Reyes added.