MANILA, Philippines, Aug. 7, 2018 /PRNewswire/ -- The Philippine Board of Investments (BOI) is encouraging local businesses to take advantage of the 2017-2019 Investment Priorities Plan's (IPP) preference for Inclusive Business to scale up sustainable business models from existing corporate social responsibility (CSR) programs. Taking its cue from the United Nations' (UN) Sustainable Development Goals 2015-2030, the BOI reiterated the private sector's essential role in ending poverty.
"CSR has been a traditional response by the private sector to the plight of the poor. By switching from CSR to Inclusive Business, entrepreneurs can help the poor in a way that generates both business growth and creates social impact," said Philippine Trade Undersecretary and BOI Managing Head Ceferino Rodolfo.
While CSR is not profit-generating, Inclusive Business trains communities to become supplier and business partners so they can have more stable livelihood sources.
According to Business+, a joint study by the BOI and the United Nations Development Programme's (UNDP) Istanbul International Center for Private Sector in Development (IICPSD), companies can create their Inclusive Business models regardless of size.
Micro, small, and medium enterprises (MSMEs), which make up 99.57 percent of Philippine establishments, have the greater flexibility to adopt Inclusive Business models. On the other hand, Inclusive Business models in large companies have the reach to deliver a wider scale of impact.
While integrating poor communities in business, value chains is essential in creating Inclusive Business models, skills development is vital to business sustainability. Small-scale suppliers, for example, need trainings in the fields of marketing, entrepreneurship, and finance to develop skills and ensure high quality supply. Business+ also recommends increased multisectoral collaboration to deliver these learning experiences.
For Inclusive Business to flourish, a conducive regulatory environment is crucial. The Philippines, for example, already introduced incentives for qualified Inclusive Business models. Under the IPP, medium and large enterprises in tourism and agribusiness that incorporate micro and small enterprises in their value chain may receive five-year tax holidays.
Inclusive Business models, however, also exist in other Philippine industries such as health, finance, and energy.
"To create Inclusive Business models, businesses need a certain level of expertise and experience. Making the transition from CSR to IB is an opportunity for the companies to engage in multi-sectoral collaboration as they try to meet the requisite knowledge and capability," Rodolfo said.