economy

USAID Special Feature: USAID Helps Mindanao folk strengthen climate resilience

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BAGANGA, Davao Oriental – All his life, Edilberto Bohol lived off the sea. On good days, he catches just enough fish to provide for his family.

However, he and his colleagues struggle just to meet their basic needs. Edilberto catches fish in the traditional hook and line method, which can bring meager returns.

As a result, he, and many of the province’s 15,000 fishers, live below the poverty threshold. “I have been fishing since I was small. The same is true with my father. I only finished high school, and this is the only livelihood I know,” said Bohol.

Seeking to improve the plight of these fishing communities, government agencies such as the Department of Agriculture (DA) and the Bureau of Fisheries and Aquatic Resources (BFAR) conducted agriculture and aquaculture training and distributed seedlings, fish fry and other production inputs to help improve livelihoods in the area.

Unfortunately, Typhoon Bopha (Pablo) struck the province before these programs could reap their intended results.

Profitable and Sustainable
And the very resources that these fisher folk relied on for their survival were wiped out. More than 400 fishing boats were damaged and almost all fish-rearing structures in Boston, Baganga, and Cateel—municipalities severely affected by Pablo—were decimated. Projects that were underway were likewise wiped out.

During the immediate aftermath of Pablo, local governments tried to focus on underlying poverty issues of their areas and resume daily fishing activities. There was an obvious need, however, to introduce alternative livelihood opportunities that could be more profitable and sustainable.

The U.S. Embassy Manila’s United States Agency for International Development (USAID), through its Growth with Equity in Mindanao (GEM) Program, supports this idea.

Following a rapid assessment, USAID designed and implemented a multi-component disaster recovery program in Davao Oriental and Compostela Valley provinces, under the oversight of the Mindanao Development Authority.

Climate Adaption
USAID/Philippines Mission Director Gloria D. Steele said, “The recovery program is part of the U.S. Government’s Php768 million disaster assistance to help Typhoon Pablo victims recover from the catastrophe.

This consisted of education, infrastructure, climate adaptation strengthening, agriculture and aquaculture livelihood assistance for the most severely affected municipalities.”

The multi-component approach included the introduction of high-value aquaculture to typhoon-affected fisher folk in both provinces.

The provincial Government of Davao Oriental was also provided with a high-value aquaculture industry development plan, which presents the results of a study on the viability of grouper (or lapu-lapu) production to help drive sustainable economic growth in the province.

The plan was formally handed over to Davao Oriental Governor Corazon Malanyaon in August 2013. It notes that grouper is expected to give better returns to growers compared traditional aquaculture commodities, like milkfish and tilapia.

USAID GEM
This target commodity presents the most potential for promotion and development in the area, considering its high market price, local and export market demand, availability of suitable mariculture sites and advances in technology.

The short to long-term strategies presented in the plan may also take off from the activities implemented by USAID through GEM.

USAID, in collaboration with the provincial government and BFAR, conducted a series of workshops on grouper farming for select growers associations in coastal towns. To help strengthen their climate resilience, the skills expansion effort included the construction of weather-resistant fish cages using locally sourced materials.

Fisherfolk in landlocked towns were trained on inland freshwater aquaculture.
They were also taught climate adaptation and mitigation techniques to address flooding and unstable oxygen levels that occur in fishponds when water temperature rises.

Majority of these growers received hatchery-bred grouper juveniles, milkfish fingerlings, formulated feeds and other start up materials from USAID.

Fisherfolk
“The project reached about 2,000 fisherfolk. The technologies we introduced are cost-effective, highly replicable and will also avert potential losses due to adverse weather conditions,” said Lauro Tito Ilagan, USAID-GEM Aquaculture Team Leader.
“Lapu-lapu farming can be very profitable and sustainable. At two production cycles per year, a four-compartment fish cage will allow a net income of as much as Php200,000,” Ilagan explained.

Edilberto and members of the Kinablangan Fisherfolk Association, which he chairs, are about to enjoy their first harvest of grouper.

“We can sell these at about Php500 a kilo,” he said, thanking USAID for helping his hometown. “We will reinvest part of our income to buy fingerlings and other inputs so that we can continue to improve our lives.”

Other growers groups that participated in the project, such as the Mabini Fisherfolk Association, are also on their way to recovery.

Prior to their foray into grouper production, the members were engaged in traditional cage culture of low-value milkfish which they sold for about Php100 per kilo in local wet markets. On their first cycle of production, they stand to earn approximately Php260,000.

“The seeds of recovery that we planted a year ago through a strong partnership between the Philippine and United States governments are beginning to bear fruit.

The U.S. Government will continue to work with our Philippine Government partners to help Typhoon Pablo-affected provinces recover and achieve lasting peace and greater prosperity for all of its residents,” Director Steele said.

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The Poor as Profit Center

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Companies in Asia are discovering that. helping the poor can be profitable

These companies, which are engaged in what is called “inclusive business,” are commercially profitable operations whose core business model is to provide large-scale innovative solutions to the problems of people who live on less than US$3 a day – or about 60% of Asia’s population.

This group of people, sometimes called the “base of the pyramid,” is neglected by many companies as customers. They are often only helped by companies through corporate charity or other programs.

“Inclusive business differs from corporate social responsibility and social enterprise because of its business scale, growth potential, and focus on systemic changes for poor people,” said Armin Bauer, a Principal Economist with the Manila-based Asian Development Bank (ADB).

Inclusive business is also distinguished from impact investments in that it places the impact on poor and vulnerable people and de-emphasizes impact on the environment or good governance, he said.

Inclusive business relies on profit-making as an incentive to improve the well-being of low-income and vulnerable populations.

Manila Water: A business model

The Manila Water Company, which provides water utility services to about seven million people in the eastern part of Manila, is an example of this business model.

The company took over as the public water provider for the eastern part of Manila in 1999. Rather than focusing on wealthy or middle class neighborhoods, the company prioritized serving slum areas, in which about one in four people had access to clean, piped water.

The company, part of listed conglomerate Metro Pacific Investments Corp., connected about a million people, mostly the poor in urban slum areas, with water and made significant profits.

“The business plan of Manila Water was to start with providing service to poor areas, not just do it as an add-on later,” said Mr. Bauer. “They upgraded service to the wealthy areas after they made substantial profits serving the poor first.”

ADB and its partners are supporting such inclusive business models through a variety of means. This includes a US$3.6 million grant that will help companies throughout Asia become better at inclusive business, or assisting the poor while making a profit.The grant will help ADB improve its expertise at making inclusive business deals with private sector companies, and also help ADB member-countries develop policies that promote businesses that directly benefit the poor.

This includes, for example, linking inclusive business startups to existing government resources, such as small business loans. Other assistance includes supporting government job creation programs thatbenefit the poor, such as slum upgrading programs and climate-proofing poor neighborhoods.

Among the potential projects to receive support this year are a cacao project and seafarers scholarships in the Philippines; spice production in Cambodia and India; a water project in China; a drip irrigation program in India; and rural bank loan projects in Pakistan and Tajikistan.Prior to this most recent grant, ADB conducted market studies in countries throughout Asia to better understand the potential for inclusive business in the region.

The studies looked at how many inclusive business companies are already operating in the region, how many financial institutions support inclusive business, the problems the companies face and possible solutions, as well as opportunities to start new inclusive businesses.

ADB’s investments in inclusive business companies have steadily increased in recent years. Six out of the 22 approved private sector projects in 2013 were considered inclusive business. This was up from 5% from the period between 2000 and 2012.

My Town

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The summer heat is driving more people to spend their breaks in Tagaytay City. To most Metro Manilans, Tagaytay is the next option to Baguio City. This is, however, misplaced. Tagaytay can never be cooler than Baguio and, most of all, it definitely cannot offer the kind of rich, mystical culture that the Cordillera has. Tagaytay, in fact, is losing its bucolic charm and giving way to an urban frenzy that, if it runs away, will make it looking like any other burgeoning Philippine city, with the same malls, same cafes, and same space-gnawing condominiums.

Intoxicating Aroma

When we first transferred here more than a dozen years ago, we were seeking for a quiet environment. Our humble house was hemmed in by a coffee plantation on one side and a pineapple farm on the other. And whenever the coffee flowers bloomed, the air would be filled by an intoxicating aroma. Whenever I would take my early morning walks, birds of various colors would dart from one clump of trees to another. But these are all gone. Even the fireflies that used to light the huge camachile tree in front of our house have left for good.

Today, there are high buildings puncturing the blue skies of the chartered city. Except for those who have the wherewithal to buy units in them, I have yet to meet somebody who is ecstatic about the condominiums. The consensus is that they are ugly, perhaps expecting that Tagaytay retain its country air forever. To the credit of Ayalas, they have made their own versions of condominiums here follow the contours of the land, carefully working around old trees.

There used to be a Metro Tagaytay Master Plan which stipulated strict restrictions on how high structures could be built in the city. The idea was when you look at Tagaytay from Laurel or Talisay in Batangas, for instance, there wouldn’t be any edifice jutting out and violating the undulating horizontal lines. The Master Plan was also clear on the principle of easement of views – that no structure should be built that would obstruct the view of neighbors. Tall buildings should be in the inner districts, with much regard for the environment. The planners weren’t saying so but they probably meant: go slow on the carbon footprints.  But, today, impelled by mounds of cash, developers cannot resist building tiers upon tiers of rooms with a commanding view of Taal Volcano – a magical mirage shimmering on an ever-blue lake.

Mushrooming Edifices

Just a few years ago, there was hardly anything else to do in Tagaytay but to settle into a meditative groove.  You get infected by the prayerful vibes that come from the scores of churches, chapels, and retreat houses that densify the city. For your dine-out dates, there were just Josephine’s, Diners, and Kaye Ryan. If you want to go dancing, there was One Bagger. For groceries and banking, you had to motor down to Alabang.

In one sweep of a wand, restaurants with differentiating market positions have sprung up everywhere in Tagaytay. I have nicknamed a cluster of restaurants as the bulalo belt, all of them jostling for customers who hanker for hot beef soup and heavenly bone marrow, a fare to die for. Starbucks has three outlets within a five kilometer stretch. The strongest, highest grossing Starbucks in the Philippines is in Tagaytay, that is why its management send their new baristas here for them to perfect their caffeine preps.

Government Initiatives

Tagaytay was probably among the first movers as a smoke-free, plastic-strict city. To the city hall’s credit, it has been able to prevent billboards from proliferating in the city. The leaders may also want to make the city din-free. The influx of visitors have made the streets unkind to people. In a stroke of irony where the rich collaborate with the poor, the macho men in hot leather jackets and big bikes unite with the tricycle drivers in stinking sando and safe-suspect contraption in assaulting the environment.  The ridge road has formed a noise tunnel for transposed urban traffic.

At the same time. our barangay leaders in San Jose are apparently inutile in curbing noise in their neighborhood, with karaoke singers doing their ghastly thing 24 hours a day. Dyaskepatawarin! Don’t tell me it is a national malady like indolence is.

Thankfully today, the city hall is replacing the multicolored street lamps with tall no-nonsense posts and bright streetlights. The leaders have to respond to the economic upsurge and the changing demographics of the city. Already, we are experiencing unexplained waterless days. This can really be frustrating. It is easy to suspect that the flurry of construction and the growing number of people in the city are pressing on the capability of the local government to deliver basic needs.

The city cries for wider roads with safe sidewalks to boot. Tagaytay could probably do what Dasmarinas City did and that is, do not wait for the national government and spend local money to improve at least the main arteries. The Sta. Rosa-Tagaytay Route, once a farm-to-market road, has become too narrow with rumbling bumper-to-bumper traffic wasting fuel and time. Perhaps Congressman Bambol Tolentino is working on a solution now.

I heard from the grapevine that Metro Manila Development Authority chairman Francis Tolentino is contemplating on getting back the mayorship position in Tagaytay. Running the MMDA is a thankless job. Sala sa lamig, sala sa init ang ano mang gawin mo don. In spite of that, he is doing a splendid job. His bent to put hanging gardens in that dreary urban jungle probably stemmed from his stint as head of a then sleepy town. It was clean and really green. Perhaps, if ever he re-assumes the helm of the city, he would like to bring the bitter lessons of Metro Manila and this is, resist the allure of concrete and neon that only accelerate the decay of any city. – 30

Fao And Canada To Help PH Coconut Farmers

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Small scale coconut farmers in the Philippines will soon receive assistance to restore their livelihoods severely affected by last year’s Typhoon Haiyan, the UN’s Food and Agriculture Organization said today.

It is estimated that in Region VIII alone, some 33 million coconut trees were either damaged or destroyed, affecting the livelihoods of more than one million coconut farmers.

Given that coconut trees take six to eight years to reach productivity, small-scale coconut farmers need interim support to engage in livelihood diversification activities to ensure an income, as most relied solely on coconut trees as a source of livelihood.

Working with the Government of the Philippines, and supported by the Government of Canada, FAO will work to enable small-scale coconut farmers to begin the process of intercropping, crop-diversification and livelihood/poultry raising activities. This will help these communities secure their livelihoods while waiting for the newly planted coconut trees to become productive.

Canada’s Ambassador to the Philippines, H.E. Neil Reeder, reaffirmed in Manila today the commitment made last week by Canadian Prime Minister Stephen Harper to early recovery and long-term reconstruction programmes including disaster risk reduction activities in the Philippines.

The CAD$ 6 million confirmed by Canada to FAO will help FAO and the Government of the Philippines support the rehabilitation efforts for small scale coconut farmers. Acting FAO Representative in the Philippines, Rajendra Aryal, highlighted the importance of the community and needs-based approach so as to ensure that what is being delivered meets the real needs of the typhoon affected small scale coconut farmers.

“I want to express my sincere thanks for this Canadian contribution, as it will enable FAO to support more than 11,000 coconut farming households. After having consulted local communities, in close collaboration with the Department of Agriculture, Department of Agrarian Reform, Philippine Coconut Authority, Bureau of Animal Industries and other relevant Government institutions, we will be providing small-scale coconut farmers with vegetable seeds and also seeds for tubers such as cassava and sweet potatoes, which take only about three months to grow,” Aryal said. “Further, the farming communities will be provided with poultry and small livestock ruminants and post-harvest equipment.”

Crop diversification and intercropping will provide key access to income and restore self-sufficiency, building the resilience of communities to withstand future disasters.

“Our approach is very much demand based and very much community driven,” Aryal emphasized.

Making landfall four months ago, Typhoon Haiyan (locally known as Yolanda) claimed over 6,200 lives, displaced millions and devastated the agriculture and fisheries sectors. Striking between two planting seasons, the typhoon destroyed ready-to-harvest, harvested and newly planted rice crops, and severely affected the livelihoods of the coastal fisher communities.

FAO responded to an official Government request for support to affected rice farmers, providing 75 percent of the Government-requested rice seeds. Thanks to this coordinated response by FAO, the Government and other partners, farmers who would otherwise have been unable to plant in time for the December/January planting season were able to go back to their fields, and will soon be harvesting the first rice crop since the typhoon hit the country.

Paper Tiger!

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Nothing much can be expected from US President Barack Obama in his April 28-29 official visit in Manila.While he is likely to reassure the Philippines of Americans’ commitment to defend the Philippines in its raging territorial dispute with China, it will not make a difference, given how the US has been badly treating its Asia-Pacific ally over the past decades.

Since both countries forged their so-called Mutual Defense Treaty (MDT) in 1951, the US hardly cared about the poor state of the Philippines’ military capability.

Calls by Manila for increase in American military aid usually fell on deaf ears among policy makers in Washington. Whatever the Americans gave were nothing more than second-hand hardware – either of World War II vintage or their leftovers in the Vietnam war era.

Now that the geo-political situation has vastly changed, it’s time for both strategic allies to redraw their treaty or risk overtaken by new and bold challenges.

From what was once dubbed the “sleeping giant,” China has suddenly awaken, emerging as the biggest threat to the Philippines’ security interests as both have interlocking claims to the oil-rich Spratlys islands.

With superior naval assets patrolling the disputed chain of islands, China has bullied the Philippines, long perceived as militarily weak.

In the face of China’s aggressiveness in asserting its sovereign claims to the Sprawls, also referred to  as the west Philippine sea, Manila in not a few times wanted to invoke the MDT which many politicians label as a mere  paper tiger.

But thanks to cooler heads, the MDT remains as a last resort mechanism to avoid what’s likely to be a bigger problem – war.

Hopefully, Obama will use his two-day visit to assess the Philippines’ defense needs, especially in light that the two countries will enter into a new security alliance under the banner of the so-called enhanced defense security agreement.

An offshoot of months of hard bargaining, Filipino negotiators were hard put as they had to reckon with the Constitutional ban on the presence of foreign bases on Philippine soil.

In the end, they had to compromise as Manila agreed to allow US forces the use of Philippines-builtmilitary installations.

For both countries, it’s a win-win situation as they usher in a paradigm shift in their strategic ties, given China’s surging aggression in the hotly contested Spratlys.For the US, Manila’s nod to a new pact gives the Americans the leeway needed as they reposition their defense forces from theMiddle East to Asia.

Under Barack’s pivot policy, the Philippines plays a crucial role because of its strategic location in keeping peace and stability in the Asia-Pacific region.

But more than the much-needed military materiel, the Philippines badly requires America’s political succor as its row with China has assumed complex dimensions.Neither has China eased up in its flexing its military muscle in the high seas nor has it showed signs of flexibility in its diplomatic rapport with the Philippines.

As the world’s policeman, the US is in the best position to cool the tensions between Manila and Beijing for the sake of regional peace and stability.

(Mis)Taxes For Sari-Sari Stores

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“A bad beginning makes a bad ending” ~ Euripedes

Laoag City – The slow and tedious, not to mention expensive, processes of registering a business and compliance with tax requirements with the Bureau of Internal Revenue make Teresita* question her decision to open a sari-sari store to augment her husband’s, a tenant farmer, income. For the privilege of operating a sari-sari store, she has to issue official receipts and deal with the BIR every month, for percentage tax** among others.

“Issue an official receipt for every sale even if the buyer didn’t ask for it, but if the sale is below P25 and the buyer didn’t ask for one, then you don’t have to issue a receipt,” the BIR officer emphasized during the tax  briefing at the Revenue District Office No. 1 in Laoag City. “If you don’t issue a receipt, you will be fined P10,000! If your customer asked for a receipt and you didn’t give him, that’s a fine of P20,000!” she warned.

“Everything is very confusing,” Teresita told her seatmate at the briefing. “To travel to the city every month to pay taxes, I will spend an additional P184 for public transportation expense,” she added.

Additional transportation expense is not the only additional costs Teresita has to think of is she wants to open a sari-sari store. Not only will she need to pay 3% of her monthly sales to BIR, but she also have to pay for the cost of printing official receipts. For a farmer and a housewife, just the additional P184 in monthly transportation expense is a lot.

Isn’t there an injustice in this tax requirement for sari-sari stores? Is it really fair to ask them to issue official receipts? Is it fair that sari-sari store owners, who are mostly marginal earners, be burdened with monthly tax compliance? Is it fair that people who barely earn enough to buy for their necessities are burdened with additional costs in exchange for the privilege of owning a sari-sari store?

When asked why this so much tax compliance burden for sari-sari stores, the same BIR officer said that the official receipts will help BIR determine if sari-sari stores are truly earning marginally. She added that it is not enough for sari-sari store owners to declare they are marginal earners, but they have to show BIR receipts that they only sold so much.

I understand the country, through the BIR, needs to increase its tax collections so it can improve basic services to the country, but ensuring that all sari-sari stores report their actual sales and requiring them to pay taxes on these sales every month too much of a burden? The combined annual sales of all sari-sari stores in the country couldn’t possibly equal the one year sales of PLDT which, as of 2013, was P 164.1 billions. So isn’t BIR efforts more aptly rewarded if it focuses its efforts in policing the country’s biggest corporations and ensuring that they pay the right taxes?

The cost of ensuring that every single sari-sari store comply with this rule and the additional benefit, increase in tax collections, are clearly not commensurate. Isn’t there a better, less onerous way for the government to collect taxes from sari-sari stores? With the combined brilliance of the people at BIR, I am sure they can think of something.

The tax rules governing tricycle and jeepney drivers and operators are an example of this brilliance. I don’t know how it is in the other parts of the country, but in the boondocks I call home, our neighborhood tricycle driver earns more than the nearest sari-sari store. Why not require sari-sari stores to pay a fixed amount of taxes every quarter? If Teresita is required to pay P750, which is equivalent to a total sales of P25,000, a quarter in taxes, this would still be preferable to spending almost P600 every quarter in transportation expenses for monthly tax compliance.

What is it with sari-sari stores that they are dealt with differently? Could it be that requiring sari-sari stores to issue official receipt with the threat of thousands of pesos in fines if they don’t is a sign of a wider epidemic? Is this the beginning of the slow death of common sense in BIR?

What will be the next result of this slow death of common sense? Maybe, ask the fish vendor at the wet market to issue official receipts, too?

*Not her real name

**Percentage tax is a computed as 3% of total sales and is paid monthly to the BIR

Liza M. Gaspar is a wealth coach and personal finance enthusiast. She also volunteers for the Rotary Club of Makati McKinley (rcmmckinley.org) and the Gerry Roxas Leadership Awardees (grlawardees.org). Engage her in a discussion about anything you fancy at http://www.thegirlninja.com, liza@thegirlninja.com or www.facebook.com/annalizagaspar

 

 

Farmers, Fisherfolk to Get Full Subsidies for SSS Contributions From DA

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In its continuing campaign to extend social protection to informal sector workers, the Social Security System (SSS) has formalized a key partnership with the Department of Agriculture (DA) for the latter to fully subsidize farmers’ monthly SSS contributions as self-employed members.

The agreement is expected to benefit up to 200,000 agricultural workers nationwide who may qualify for the subsidy as members of Rural Based Organizations (RBOs) or Community Extension Workers (CEWs) in good standing, with 100 farmers already selected as the first batch of beneficiaries.

Despite their invaluable role in our nation’s food security, farmers often struggle with seasonal incomes and their livelihood’s vulnerability against typhoons, floods and other whims of nature.

SSS President and Chief Executive Officer Emilio de Quiros, Jr. and Agricultural Secretary Proseso Alcala signed the agreement during ceremonies at the DA Main Office in Diliman, Quezon City on March 14, with SSS Senior Vice President Judy Frances See and DA-Agricultural Training Institute (ATI) Director Asterio Saliot in attendance as witnesses.

Apart from farmers, fisherfolk will also be added to the list of beneficiaries for the subsidized SSS contributions. At present, over 450,000 farmers and fisherfolk are covered by SSS as self-employed members.

The DA-ATI, with RBOs and CEWs as its partners, implements extension and training activities to promote state-initiated food sufficiency programs and other priority thrusts of the DA. The subsidy for SSS contributions forms part of DA-ATI’s compensation for the qualified members of RBOs and designated CEWs. Included in the list of RBOs are Rural Improvement Clubs (RIC); the youth-based 4H Clubs; Pambansang Mananalon, Mag-uuma, Magbabaul, Magsasaka (P4MP); Magsasaka Siyentista (MS); and Indigenous People (IP).

The subsidies will be based on P3,000 monthly salary credit, which is equivalent to a contribution of P330 per month. DA-ATI Regional Offices will remit the contributions to SSS quarterly via bank deposits as well as submit a regular payment list showing the beneficiaries of the monthly subsidies.

The chosen beneficiaries have the option to increase their monthly contribution, on top of the subisidized amount, to become entitled to higher SSS benefits and loans in the future.

Many farmers and fisherfolk lack social security coverage and face difficulties in remitting regular contributions. This is something that SSS aims to address through initiatives such as its new partnership with DA.