Keppel's community project helps to lift Philippine families out of poverty

PHILIPPINES - Going by the profits, the women running the village store at the Keppel-Gawad Kalinga Eco Village know a thing or two about return on equity.

Shortly after the village - a two-hour drive from Manila - was set up just over a year ago for 60 impoverished families, 49 households each stumped up the equivalent of $6 to set up a store in one of their homes selling common household items such as canned goods and noodles.

At the end of its first year of business, the venture made each household a net profit of $36. Instead of pocketing the money, they decided to pool their profits to build a proper store.

That success says a great deal about how these former squatters and slum dwellers were able to transform their once dire circumstances with help and guidance.

The village of brightly painted semi-detached units was built by Singapore's Keppel Corp. Keppel, which operates a shipyard a few kilometres away in Batangas province, partnered Gawad Kalinga, a local charity experienced in housing projects for the poor.

The Straits Times visited the village in June last year, shortly after the last families given units had moved in. They were relieved to be living in decent homes and looked forward to boosting their slender incomes. But there was little sense of a community then.

A lot has changed a year on. "We've become a barkada (group of friends)," says Ms Carmencita Balbuena, who heads the village council of five elected officials.

The council oversees community projects like its pre-school, manages a village fund of home owners' weekly contributions and is in charge of settling disputes.

As the 300 or so villagers enjoy a stable environment, breadwinners have found it easier to secure jobs or leverage their skills as micro-entrepreneurs. One of these is Ms Balbuena's husband Rogelio, who sells taho, a Philippine dessert snack, in a nearby town.

Average monthly household income has doubled to about $290, markedly higher than the region's $191 minimum monthly wage.

"Before, all our income was spent on rent, food and paying off debts," says home owner Analiza Macalipaye, the wife of a community organiser. The Macalipayes have since been able to afford a refrigerator and a television set.

The council has relaxed some lifestyle rules imposed on villagers during the early days; most notably, a total ban on alcohol.

"There's no drinking in public, but people can do that in their own homes," says Ms Balbuena.

The fine for drinking in public is $15 and the rule on smoking has been similarly amended. But all forms of gambling remain banned - "except solitaire", quips mother of four Rose Villalon.

Keppel chairman Lee Boon Yang paid a visit last month. "The village has the air of a happy and vibrant community," he told The Straits Times. In particular, he noticed that photographs of children who had graduated from schools and colleges were displayed with pride in the homes he visited.

Keppel-Gawad Kalinga Eco Village and similar communities around the Philippines are lifting thousands of informal settlers and squatters out of poverty. Yet, the big picture is bleak.

Latest official data shows the incidence of poverty - at 27.9 per cent of the population of 97 million last year - declined only marginally over the past several years despite economic growth being quite strong in this period. Poverty incidence was 28.6 per cent in 2009 and 28.8 per cent in 2006.

The government has set an ambitious aim of cutting the rate to 16.6 per cent by 2016. Achieving it will require substantial job creation for low-income Filipinos.

Sustaining the village's early progress in building a harmonious and economically active community will be its main challenge, says Keppel Philippine Marine's business development manager Alan Claveria, who has worked on the project from the start.

"Much will depend on choosing good community leaders in the future," he adds.

But, encouraged by the results, Keppel is looking at starting another village near its Subic Bay shipyard, says Mr Claveria.

Get a copy of The Straits Times or go to straitstimes.com for more stories.