FROM THE MARGINS
Some good news! Our employment and unemployment rates have returned to pre-pandemic levels based on recent PSA data. The country’s employment rate reached 95.5 percent in October with 47.11 million employed Filipinos, a significant jump from the 43.82 million employed in October last year. The country’s unemployment rate also dropped to 4.5 percent with 2.24 million unemployed, much lower than the 3.50 million in October 2021. Even the underemployment rate declined at 14.2 percent, lower than the 16.1 percent in October last year.
These gains reflect our 7.6 percent GDP growth rate from the reopening of our economy, but the rising prices of goods remains a challenge. Filipinos feel inflation where it hurts the most – in the stomach. Inflation accelerated to eight percent last November, a 14-year high. Food and non-alcoholic beverage prices accounted for 58 percent of the overall increase, with vegetables, rice and sugar topping the list of goods whose prices increased.
So what can we do? The key is to create more jobs, support micro-small-and-medium-enterprises (MSMEs), and promote financial inclusion. I agree with Private Sector Advisory Council head Joey Concepcion, when he said that the Marcos administration must focus on agri-microentrepreneurs to generate jobs and address food security issues. I hope the President, who met with them last Dec. 9, would support their proposal to scale up MSMEs, upgrade workers’ skills, and foster a policy environment that welcomes local and international investments.
Agri-microentrepreneurship
Adela Padilla-Rivadeneira is a living example of how agri-microentrepreneurship could lift people from poverty. In 1996, Adela’s husband lost his job. Since their province, Marinduque, is rich in bananas and Adela happened to attend a banana chips-making training with the Department of Agriculture, they were inspired to start a business. With a starting capital of only P500, they began selling banana chips in school canteens.
Their business grew and eventually became three Sisters’ Homemade Banana Chips. They needed additional capital, so Adela joined a microfinance institution (MFI) because they could not borrow from local banks. Adela completed several loan cycles with her MFI, starting with a loan of ₱2,000 in 1991, until her 45th loan worth ₱300,000 in 2021.
Her MFI gives Adela financial and business development assistance, but she also attends government programs to improve their business, like DOST’s training on production and packaging and DTI’s training on product promotion and licensing. When the Covid-19 pandemic happened, DTI taught her marketing strategies (e.g., promos like buy-one take-one) and to participate in a community project, Diskuwento Caravan, where MSMEs sell their products within the community. They donated their unsold products to health workers in hospitals and drug stores.
The pandemic paved the way for Adela to explore digital options for market expansion. Their products were featured in DOST and DTI regional websites, as well as in Radyo-Negosyo, DZRH-TeleRadyo, Go-Negosyo, Agripreneur-Live, Globe: My Business, and CARD-MRI Hijos Tours. Currently, the business employs 14 workers, all are Adela’s fellow members in the MFI. The business also helps the community, as their suppliers are mostly farmers in their area. The business now has more than a million fixed assets and annual profits from selling in digital platforms like Shopee, Lazada and Facebook Marketplace. They deliver via J&T, AP Cargo and JRS, and for payments, they use GCash, Maya, konek2CARD, Palawan Pay and online banking. These platforms reduce their transportation costs, and provide convenience for their resellers, customers, and employees.
Digital financial inclusion award
Adela is one of 24 microentrepreneurs who were recognized as “Digital Champions” by the Microfinance Council of the Philippines (MCPI) in a virtual awarding ceremony held last Dec. 6. Four MFIs — Cantilan Bank, CARD MRI, KMBI and TSKI – were also recognized in the first Digital Financial Inclusion Awards (DFIA), an MCPI program that is funded by Citi Foundation and supported by the Bangko Sentral ng Pilipinas. It was launched in March to recognize MFIs and microentrepreurs that thrive in the digital economy.
The DFIA is an outstanding way to promote financial inclusion through digitalization of the microfinance sector. All the DFIA winners were given cash incentives, which they can use to improve their digital financial services or use as additional capital for their microenterprises. By recognizing and supporting MFIs and microentrepreneurs who have successfully implemented digital solutions in their operations, the DFIA advances the inclusive digital finance agenda that is important for our economic development. The DFIA has a second component that focuses on awareness and readiness campaign, or digitalization training workshops for MFIs. The technical assistance on digitalization gives MFIs the chance to implement their pilot digitalization initiatives in their selected branches.
Initiatives like the DFIA motivate other MFIs and microentrepreneurs to adopt digital solutions in their institutions, expanding digital financial services and empowering local businesses. Congratulations to MCPI, Citi Foundation and the BSP for this wonderful program! My salute to Adela, and the winning microentrepreneurs and MFIs!
"A small business is an amazing way to serve and leave an impact on the world you live in.” -Nicole Snow
(Dr. Jaime Aristotle B. Alip is a poverty eradication advocate. He is the founder of the Center for Agriculture and Rural Development Mutually-Reinforcing Institutions (CARD MRI), a group of 23 organizations that provide social development services to eight million economically-disadvantaged Filipinos and insure more than 27 million nationwide.)