THE Board of Investments (BoI) is preparing a national development plan that will accommodate inclusive business (IB) models at the provincial level.
“We are in the process of developing a national IB framework to integrate it with the programs of the DTI (Department of Trade and Industry),” BoI’s IB Division Director Melanie L. Moleño said in an interview with BusinessWorld last week in Makati City.
“The idea is for us to have a solid document to show that we can implement IB in the provincial level, because until we [don’t] have such framework, it will be hard to push,” she added.
The government conducts livelihood training and dialogues on IB to prepare local government units to work with investors establishing projects in their jurisdictions.
However, Ms. Moleño said public awareness of the concept remains low.
Citing a 2017 report, Business+ Philippines, jointly produced by the BoI, the United Nations Development Programme Philippines and the UNDP Istanbul International Center for Private Sector in Development, she said 1.51 out of 7 companies interviewed for the study still had very low levels of awareness of the IB concept.
Some also tend to confuse IB with corporate social responsibility activities.
Ms. Moleno said IB models aim to ensure that the poor members of the community make an impact on the company’s financial performance. This is achieved through directly employing them and procuring their goods and services.
The Philippines has standards to evaluate the IB friendliness of investments. Under the 2017 to 2019 Investments Priority Plan, at least 25% of total cost of services must be accounted for by micro and small enterprises for a venture to qualify as an IB.
Tourism projects are required to generate at least 25 direct jobs within target communities while agri-modernization projects should engage at least 300 marginalized individuals.
Of these quotas, about 30% must be women.
Income for those employed should be minimum wage or an alternative baseline income plus 20%, whichever is higher.
IB firms are also required to provide technical assistance and capacity-building to small enterprises, and facilitate access to finance.
Those who qualify are offered a five-year income tax holiday incentive.
However, the BoI said gaining eligibility is difficult for some firms.
“It’s not easy for companies to actually say they will engage 300 farmers… many change business models in the long run. What we want is long-term sustainability,” she added.
Since early this year when it started accepting applications, the BoI-IB has approved two projects for IB incentives. These are the Ayala Group’s P1.7 billion Seda LioResort in El Nido, Palawan and the Bulacan-based poultry processing plant of the Cargill Joy Poultry Meats Production, Inc., a joint venture between Cargill and Jollibee Foods Corp.
Asked if the BoI will review the policy guidelines to make applications easier, Ms. Moleño said the criteria are under review.
She said the BoI is looking for ways to recognize existing projects that employ IB practices but are no longer eligible for perks on offer. The current law prevents existing investors to apply for another set of incentives and be granted more than one incentive package.
As such, the BoI-IB is looking at establishing an accreditation system that will recognize existing and future projects as implementing IB practices
“That will at least acknowledge that a project is practicing inclusive business and they can add that to their portfolio,” she added. — Janina C. Lim
