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Power grid operator NGCP billed P2.4B worth of CSR, PR expenses to consumers

Since January 2023, the Energy Regulatory Commission has held 14 hearings to determine how much the NGCP should charge customers. The result of the investigation could mean refunds or higher electricity bills in the coming years.

By ELYSSA LOPEZ
Philippine Center for Investigative Journalism
November 7, 2023

MANILA – As the sole public utility in charge of power transmission lines, the chief mandate of the National Grid Corporation of the Philippines (NGCP) is to ensure the reliability of the country’s electricity. So when a government representative found that the company had included corporate social responsibility (CSR) activities as part of its operating expenses, she sought an explanation.

“Are CSR expenses necessary for the provision of the transmission services by NGCP?” asked Marbeth Laconico, corporate secretary of the National Transmission Corporation (TransCo), during a hearing called by regulators.

Transco is the state entity that owns the power transmission grid, which brings power supply from generating plants to electricity distributors. NGCP, owned by a consortium of Filipino tycoons and the State Grid Corporation of China, won the concession deal to operate it after a public bidding in 2007.

Questions over the NGCP’s finances have grown in recent years, as the transmission operator, a state-sanctioned monopoly, reported higher profitability. Last year, NGCP reported P34.7 billion in net income on nearly P62 billion in revenues. Net profit margin grew to 56.15% from 47.6% year-on-year.

Yet based on its financial statements from 2016 to 2022, NGCP passed on to consumers P2.4 billion in expenses for “public relations and corporate social responsibility,” P46.2 million in “charitable donations,” and a donation of P942 million for a “COVID-19 Preventive Drive.”

“NGCP values not only the quality of [its] transmission service. We also like to put [a] premium [on] engaging with communities, which I suppose all companies are undertaking as part of their corporate social responsibility projects,” Raymund Fontillas, financial controller of NGCP, told regulators.

Regulators have also sought explanations for the huge amount spent by the grid operator on salaries and benefits paid to employees, as well as expenses due to force majeure such as natural calamities.

Since January 2023, the Energy Regulatory Commission (ERC) has held 14 hearings to determine how much the NGCP should charge customers for the period 2016 to 2022, the fourth round of regulatory reviews.

TransCo and distribution utilities like Meralco grilled the NGCP during the hearings, where the exchange between TransCo’s Laconico and NGCP’s Fontillas happened.

Transmission rates are supposed to be set every five years, the length of a regulatory period. But that has not happened in the past decade. The last time the NGCP had a regulatory review was in 2010, which determined the maximum allowable revenue it could earn for 2010 to 2015, the company’s third regulatory period.

The ERC did not call for a formal review of the rates until it issued the Amended Rules for Setting Transmission Wheeling Rates (RTWR) in 2022, which officially began the fourth regulatory review.

It does not mean the NGCP has stopped collecting fees from customers, however. The company has maintained an average net profit margin of 47.83% from 2016 to 2022. Based on its financial statements, the company earned an average of P23 billion annually during the five-year period.

This delay had been the subject of multiple Senate and House hearings, on top of NGCP’s own delay in the construction of its interconnection projects that add to consumers' monthly electricity payments.

At least 9% of what Filipinos pay for electricity goes to transmission charges. This means that for every P100 spent on the electricity bill, P9 goes to the NGCP.

How much that 9% costs monthly is determined by the ERC, the quasi-judicial body in charge of regulating the energy sector.

Insurance bought from shareholder’s firm

The regulatory review hearings provided a venue for the NGCP to explain the expenses that had been questioned multiple times by critics.

Among other expenses questioned during the hearings were force majeure events (FMEs). For the fourth regulatory period, the NGCP is applying for P1.057 billion worth of FME claims, including related costs that occurred after 2010 or before the fourth regulatory period.

Such expenses can be passed on to consumers, subject to the approval of ERC. Natural disasters such as typhoons, earthquakes, and landslides, or man-made disasters such as war or riots, are considered as FMEs.

Under the concession agreement between the NGCP and TransCo, the former is mandated to insure its assets. NGCP’s financial statements showed the company spent P2.8 billion in insurance payments from 2018 to 2021, which include industrial all-risk insurance, a type of policy that allows the policyholder to protect assets from risks other than fire.

Almost half of insurance policies during the period, or about P1.3 billion, were procured from Prudential Guarantee and Assurance Inc, one of the country’s largest non-life insurers. Its chairman, Robert Coyiuto Jr., owns one of the shareholders of NGCP: Calaca High Power Corp.

Reeva Shane Viado, corporate financial analyst of the Power Sector Assets and Liabilities Management Corp. (PSALM), the state entity that restructured the energy sector, sought clarification during the hearing from NGCP if it had claimed any amount related to FMEs from its insurance providers.

“It is just our position… that if NGCP has already recovered any amount from its insurance providers, such amount should not be included in this revenue under the recovery proposal of NGCP,” Viado said.

The NGCP representative failed to respond to the question.

The ERC also posed “clarificatory questions” regarding the compensation package of NGCP employees. In August, the commission asked NGCP to provide a detailed breakdown and explanation of salaries, wages, and employee benefits from 2016 to 2020.

Salaries and employee benefits, which totaled P20.9 billion from 2016 to 2020, were the second biggest expense item during the review period.

Public records showed the NGCP employs about 4,700 employees. That means each employee earned P4.4 million a year on average, or about P371,000 a month.

Financial statements also revealed that key management personnel had enjoyed “short-term benefits” that averaged P346 million from 2016 to 2020. The documents however were silent on what kind of benefits were paid to these employees.

Fourth regulatory review

With the delay in its regulatory review, the NGCP has been billing customers based on 2010 rates. A paper by University of the Philippines economics professor Joel Yu found that the company “continues to enjoy the rates of return determined by the ERC which are no longer reflective of the opportunity cost of capital.”

As the rates were determined based on prevailing market conditions – just after a financial crisis – a premium was placed on the risk taken by the NGCP in operating the country’s transmission grid. The economy has since recovered.

The ERC uses a performance-based review in determining the NGCP’s wheeling rates. This means the company may obtain cash incentives in case it performs beyond the target criteria set by the commission. These criteria are supposed to be reviewed every regulatory period.

Because of delays in the review, the NGCP was allowed to recover an interim maximum annual revenue from 2016 to 2020 based on criteria set in 2010. In the ongoing review, the NGCP claimed that customers owed it P316 billion, or the total revenue requirement from 2016 to 2020.

Based on PCIJ’s analysis of available data, that amount was at least 28% higher than what the NGCP had charged customers during the review period.

ERC asked the NGCP during the hearings how much the revenue requirement would translate to per-kilowatt-hour rates, but the grid operator was unable to reply.

The ERC has decided to catch up on the delay and extend the duration of the fourth regulatory period, 2016 to 2020, up to 2022, or from five years to seven years.

The NGCP opposed this, citing the five-year intervals followed in previous regulatory periods. In October, the ERC denied the plea, which means the decision on the fourth regulatory review is set to be published soon.

How the ERC decides on which expenses the NGCP can pass on to consumers will result in either refunds or higher electricity bills in the coming years.

Agusan del Norte residents rebuild lives after armed conflict

By ICRC
October 5, 2023

MAKATI CITY – Yang-yang Subay remembers the time when conflict broke out in her village and she had to flee for her life along with her family and 185 other people in March 2022. All they wanted was a place they could live in without fear of violence. Barangay Puting Bato of Cabadbaran City, Agusan del Norte province, became that haven for them.

But the living conditions were a challenge. Their dilapidated, makeshift homes provided inadequate protection against heat or rain. A few of the families were forced to live together in a single house, which they built using scrap materials salvaged from their former village. They lacked both space and privacy. Without access to clean water, proper sanitary facilities or shelter, those were displaced began to have health problems. “People here began to fall ill because of the dirty water and many of us had regular stomach aches,” says 23-year-old Yang-yang, a farmer.

Julie Subay, who was also displaced, shares that the temporary house he built had only a tarpaulin roof. “Water used to seep in whenever it rained heavily and we used to get wet even inside our house,” he says.

A team from the International Committee of the Red Cross (ICRC) visited Barangay Puting Bato in March 2023 to assess the condition of the displaced people.

The community lives several kilometres away from their agricultural land and forestry area and have limited access to basic supplies, timber and water. This made it hard for them to build sturdy homes. We also discovered that the residents didn’t have proper toilets because of which they were even more susceptible to diseases,” says David King, the ICRC’s water and habitat engineer. Responding to the needs of those affected by armed conflict on a purely humanitarian basis, the ICRC built a new water pipeline in the village and provided water filters for each family. The ICRC team also built another water outlet so that villagers don’t have to queue up for several hours to collect water from the only outlet that the village had previously.

To ensure that community members can repair their homes, install proper roofs and set up toilets, the ICRC provided them with construction materials. The Philippine Red Cross also held sessions to raise awareness about the importance of cleanliness and good hygiene practices.

Melanie Subay, a 28-year-old farmer, says her family’s life has changed for the better since they received help from the ICRC. The water is no longer as dirty as it was and the additional water tap is helping villagers to use their time a little more efficiently. “We used to wait for many hours to collect drinking water from the single tap in our area. I used to go to the riverside and wash my clothes. But it was difficult to carry all the clothes and walk for miles. That is why all of us are happy that we have another water source near our homes,” she says.

Julie, her neighbour, agrees. “My house looks better now and I no longer worry about the rain. We also don’t feel as hot as before because we have used woven bamboo mats for the walls and the roof,” he says.

A Woman of Culture, LOREN LEGARDA

By DTI-Bureau of Domestic Trade Promotion
October 4, 2023

MAKATI CITY – The name Loren Legarda has always been synonymous with the conservation and promotion of Philippine culture and arts, traditional knowledge, and indigenous systems.

Senate President Pro Tempore Loren Legarda’s pursuit to increase the level of cultural heritage awareness to preserve and protect our age-old knowledge, traditions, and practices that we inherited from our forefathers can be seen through all her efforts to champion the cause of cultural preservation and advancement.

Capacitating culture-based livelihoods

With a distinguished career as a journalist and public servant, and a deep-rooted passion for cultural heritage, Legarda has emerged as a remarkable figure in Philippine society – a true woman of culture.

This advocacy has led her to author and sponsor legislative measures and support programs and initiatives that promote Philippine culture and arts, protect the rights and traditions of the indigenous peoples, and advocate for cultural integrity and culture-based livelihood.

“Tayong mga Pilipino ay sadyang malikhain. Our love for the arts is immeasurable, and this can be seen in our ancestors’ works. We have to promote it as well as embrace it. The world needs to know more about the Filipino culture and artistry – our own identity,” Legarda said.

As a long-time advocate of cultural heritage and Micro, Small, and Medium Enterprises (MSMEs), Legarda emphasized the need to capacitate MSMEs, including culture-based livelihoods, as part of the overall strategy on economic development, providing opportunities for support and growth, and ensuring that their needs are addressed.

“We need to sustain our gains by strengthening our MSME programs because aside from generating employment opportunities and better incomes, MSMEs are powerful platforms for promotion of viable rural livelihoods, cultural preservation, socioeconomic empowerment of indigenous communities, and environmental protection,” Legarda, author and principal sponsor of the Magna Carta for MSMEs said.

Recently, the Cultural Mapping Law authored by Legarda was enacted, which sought to make heritage an inclusive tool for local and national development, employing a grassroots approach that empowers local communities to identify and assign cultural value to properties that are important to them.

Cultural mapping provides a powerful tool for MSMEs and indigenous communities to infuse cultural richness into their livelihoods. By preserving and celebrating their cultural heritage, these enterprises can differentiate themselves in the global marketplace, create sustainable livelihoods, and contribute to the preservation of cultural diversity.

“It is but fitting to help bring our culture closer to our people, to reawaken the citizens’ pride in our culture, history, and heritage, and to strengthen our nationalism. We must explore initiatives to reintroduce our culture and traditions, especially to the newer generation. We must gather more heritage warriors to conserve and protect the Philippine cultural heritage effectively,” Legarda said.

Empowering the Philippine Cultural Capital

Aside from the Magna Carta for MSMEs and the Cultural Mapping Law, the four-term Senator initiated several programs and policies to promote our people’s arts and cultural diversity.

To preserve the art of Filipino weaving, Legarda pushed for the strengthened implementation of the Philippine Tropical Fabrics Law, which she principally authored, as it seeks to expand the tropical fabrics industry and support the local and indigenous weavers and artisans. She also coauthored the National Cultural Heritage Act, which primarily protects the country’s cultural wealth and treasures.

Legarda also filed Senate Bill No. 1866, or the proposed National Writing System Act, which aims to promote patriotism among Filipinos by inculcating, propagating, and conserving the cultural heritage and treasures of the country through our indigenous and traditional writing systems. Moreover, Legarda proposed the establishment of a Department of Culture, which will initiate programs and activities promoting national identity and culture.

The Senate President Pro Tempore provided support for the Schools of Living Traditions (SLT) Assistance to Artisans, Enhanced SLT Program; the establishment of weaving, natural dye, and processing centers; and the establishment of pineapple farms and fiber extraction facilities and abaca fiber production in some localities in the country. She spearheaded projects covering the protection and promotion of various cultural traditions, including Hibla ng Lahing Filipino, the Philippines’ first permanent textile gallery; the Baybayin Gallery, the Philippines’ permanent ancient scripts gallery in the National Museum; and the Likha-an in Intramuros, a space and repository for Philippine traditional arts. She also supported and honored the Manlilikha ng Bayan (National Living Treasures) through the establishment of cultural centers and a permanent gallery at the National Museum of the Philippines.

Legarda’s tireless crusade for the arts does not end in the traditional. She has been the visionary and driving force behind the Philippines’ return to the Venice Biennale after a 51-year hiatus, considered as the Olympics of contemporary art. To further cement the Philippine presence, she filed a bill that institutionalizes the participation of the Philippines in the said exhibition. Through her initiative, the Philippines is also set to be the Guest of Honour for the 2025 Frankfurt Book Fair, the world’s oldest and most prestigious book fair. To strengthen cultural diplomacy, she initiated the advancement of Philippine studies in United Kingdom, Germany, Spain, Singapore, United States of America, South Korea, Australia, Canada, Mexico, Belgium, Canada, and France.

Just last year, the Philippine Creative Industries Development Act, which she coauthored, was enacted, marking yet another milestone in her relentless efforts to support cultural workers and advance Philippine culture and arts.

Reignite and Reconnect: NACF returns after a three-year hiatus

In 2016, to further showcase Filipino creativity and ensure that the legacy of the Philippine culture and heritage lives on, Legarda launched the 1st National Arts and Crafts Fair in collaboration with the Department of Trade and Industry to create a nurturing environment where our indigenous crafts and artistry can flourish.

Legarda posed the question: “The challenge against a fast-changing globalized world is this: How do we promote, preserve, and sustain the artistic creativity and culture-based crafts of our artisans deeply rooted in our respective cultures? How do we support talented weavers, our culture-bearers, and encourage them to continue their crafts and to pass on their expertise and art to the next generation?”

The National Arts and Crafts Fair emerged as a robust platform to address these challenges. It was designed to support indigenous communities and local entrepreneurs by providing them with the means to reach broader local and even international markets. The fair became a venue that showcased innovative products and celebrated the indigenous culture and traditions of various Philippine regions.

However, in 2020, the world grappled with the unprecedented challenges brought about by the COVID-19 pandemic. The NACF faced an unforeseen hurdle, leading to a three-year hiatus.

As the world slowly recovers, the NACF returns with renewed vigor and purpose that drive Filipino artisans and indigenous communities to continue creating, innovating, and inspiring.

The return of the NACF after the three-year hiatus signals a fresh opportunity for us to showcase the rich and diverse heritage of our country which we must protect, preserve, and rightfully pas on to the next generation.

“The NACF is back to open doors of opportunities for our indigenous communities and local entrepreneurs. Our culture is our soul, and while many do not realize it, we need to release our cultural energy, which motivates us to work and engage in meaningful and profound social interaction. With the return of the NACF, I encourage our artisans to embrace our diversity and always bring with you the legacies of Filipino cultural heritage,” Legarda said.

“Undeniably, our MSMEs, IPs, and culture-based livelihoods have been among the most affected by the pandemic. To ensure the inclusive and sustainable development of our cultural communities, we are happy to bring back the NACF. I invite everyone to visit and participate in this year’s National Arts and Crafts Fair, not just as spectators but as active contributors to our cultural revival. Together, let us reconnect with our roots, rediscover the culture and traditions that reflect the identity and history of a community, and support the talented individuals who keep our heritage alive,” she continued.

The Appeal of Bananas

Delicious fruit products from the Philippines are best-sellers in the EU market

By Knowledge Management and Information Service
August 24 2023

MAKATI CITY – The relaxed charm of fourth-generation farmer 35-year-old Raymund Aaron does not show the hard work he puts into successfully running his small family business of manufacturing food products.

The company Villa Socorro Farm and their factory are situated in Pagsanjan, Laguna province, south-east of Manila.

The self-styled 'Banana Chief' of this social enterprise, Raymund, oversees the production and marketing of the company's famous banana chips.

He inherited his passion for agriculture and farming from his father, incorporating a streak of his own.

Right after obtaining a Bachelor of Science in Management from Ateneo de Manila University in 2009, Raymund joined the budding family business.

"I wanted to be an entrepreneur for as long as I can remember. We used to grow bananas on our land in Pagsanjan, and so, after graduating, doing business using bananas seemed the perfect fit," Raymund shared.

An indirect start

The idea of exporting came through his father's work in marketing for a multinational company, which inspired him to engage in international business.

Starting off in 2008 with an initial capitalization of P5 million, the company produced banana chips, with the first export in 2014 to the United States.

The Health Safety Certification from the Food and Drug Administration (FDA), a requirement of the Philippine authorities, was obtained in 2012, which further added credibility to the business as an exporter.

"We began exporting indirectly through a local company that expressed interest in distributing our products to buyers there."

Department of Trade and Industry (DTI) helps reach Europe

Raymund, a regular at the Philippine government’s DTI business matching events, recently returned from a similar event held in Dubai coinciding with Gulfood 2023.

Regular participation in business networking events and seminars since 2015 has provided valuable knowledge and insights on export market access, including the European Union (EU).

Be it the DTI or the Center for International Trade Expositions and Missions (CITEM) handling the International Food Exhibition (IFEX) Philippines, the biggest international food trade show in the country, he always found participation in the trade fairs to be beneficial.

"You never knew who you would meet. I always carried samples of my products along." At one such event arranged by the DTI-Export Marketing Bureau (EMB), Raymund established a connection with the Philippines’ diplomatic mission in Switzerland. Soon, samples from Villa Socorro reached a few Swiss companies with the help of this link.

The products were a hit with one distribution company. By the end of 2019, a 20-foot container with 1,000 boxes that cost USD14,000 has been shipped to Switzerland. "It was support from the EMB that helped us pursue direct exports to Europe. We made our first link through them."

Recognizing the support he received, Raymund is always willing to share his skills and knowledge with other entrepreneurs and to contribute to local DTI capacity-building initiatives.

Why the EU?

The EU appears to be a lucrative market for the company as Raymund gradually expands the product range by including sweet potato chips and corn snacks. About 80% of total current revenue comes from exports, while 20% comes from sales at hotels, restaurants, canteens, airports, kiosks, and selected supermarkets in the Philippines.

Villa Socorro's exports to Europe are at 5%, with buyers in Switzerland, Norway and EU member state the Netherlands. Raymund wants to increase business with Europe, specifically with EU member states, which he regards as the best destinations for healthy organic food products made from tropical fruits.

"It is a market that is willing to pay a premium for natural products."

EU buyers' requirements

Raymund's drive to grow specifically in the EU market is evident in his readiness to comply with the necessary requirements.

The REX number to avail of the EU Generalized Scheme of Preferences Plus (GSP+) scheme to export tariff-free to the EU was obtained on the recommendation of the buyers to strengthen the business.

The Registered Exporter System (REX) is a self-certification system wherein the origin of goods is declared by economic operators themselves by means of so-called statements about origin. To be entitled to make out a statement of origin, an economic operator must be registered in a database by the competent authorities. The economic operator then becomes a "registered exporter."

Product and packaging development were also adjusted. There is a shift to use a more natural Brown Muscovado Sugar to suit customer preferences in the EU.

The company also created a sub-brand, Farmony, to market its products in the EU. "Farmony creates harmony between farmers, manufacturers, and consumers. Our existing brand, Villa Socorro Farm Sabanana Banana Chips, really targets Filipinos or people looking for Filipino products. We created Farmony to have a product that can easily blend on the shelves of the EU market," Raymund shared.

Social entrepreneur

Being on a farm allowed Raymund to become a social entrepreneur. He understands well the needs of the farmer.

To support banana farmers around his family plantation, Raymund buys 98% of the fruit from the community that he fondly refers to as “partner-farmers."

"We buy bananas from more than 200 farmers in a radius of 5km around our farm. We only plant 2% of the bananas that we use for banana chips," he shared. By processing 600,000 tons of bananas every year, he provides the local farmers with a market for their produce.

He considers himself lucky that things fell into place, enabling him to give back to the community that helped him get to where he is today.

Gearing up for the future

"I am still here. I look forward to expanding our business. Sticking with the snacks theme, we're looking at making use of the abundant farm produce in our region and the rest of the Philippines to create fun and healthy snacks.

Raymund is determined to transform the business into a reliable food company by creating an entire line of banana products and drawing in loyal customers at home and abroad.

The ARISE Plus Philippines project is enabling Philippine exporters to take advantage of European Union (EU) market access and the trade privileges granted under the Generalized System of Preference (GSP+). It supports the overall EU-Philippines trade relationship and trade-related policies.

ARISE Plus Philippines is a project of the Government of the Philippines, with the Department of Trade and Industry as lead partner together with the Department of Agriculture, Food and Drug Administration, Bureau of Customs, the Department of Science and Technology, as well as the private sector. It is funded by the EU with the International Trade Centre (ITC) as the technical agency for the project.

Nature’s Legacy home décor: Dare to innovate

Eco-friendly home décor makes space in Europe

By Knowledge Management and Information Service
August 14, 2023

Respect for nature and humans

The founders of Nature’s Legacy, husband-wife team Cathy and Pete Delantar, came from humble beginnings with no plans to start a manufacturing business.

Witnessing the poverty in their surrounding community, they made a commitment to help by creating employment opportunities.

“Our Filipino upbringing instilled in us a thrifty attitude towards the resources we were given. We would use woven baskets or buyots when going to the public market,” recalled Pete.

Cathy and Pete transformed natural resources into patented sustainable materials to create inspired pieces for the home, for business, and for life.

In turn, the couple accommodated unskilled craftsmen, taught them the basics of material application, and turned them into productive individuals.

Ditching dead wood

Nature's Legacy faced a challenging journey as a sustainable manufacturer.

Its flagship product, Stonecast – a handmade material that mimics real limestone – was quickly imitated by other players in the industry.

“Realizing that we could not compete on price, the company decided to focus on creating something unique and different,” Pete shared.

During a walk on their property in Compostela, Cebu, the founders stumbled upon piles of forest debris that were being used solely as firewood.

With a background in material application, they soon transformed the readily available but ignored raw materials into the sustainable invention Naturescast.

Their current range of products includes Naturescast, Nucast, Marmorcast, and Stonecast. All four products align with the manufacturing company’s sustainable product principles: recycled, biodegradable, ethical, and communal.

Destination: export

In 1983, Nature’s Legacy began exporting to Canada and the United States. At that time, the company's revenues ranged between P5.0 to P6.0 million per year and the foreign exchange rate was P18 - P20 to the US dollar.

In 2002, the company made its first exports to Germany. Today, almost 40% of Nature’s Legacy’s total exports go to Switzerland and EU member states including the Netherlands, France, Italy, and Slovenia.

GSP+ does the trick

One of the company’s objectives is to attract customers who prioritize sustainability, and who recognize the value and significance of sustainable, circular, and innovative products and practices. This is the reason the company has zeroed in on the EU as its niche market.

The EU’s Generalized System of Preference Plus (GSP+) scheme for Philippine exporters has created an attractive incentive for firms to do business with EU member states since 2017, according to Pete, who learned about the scheme through the Philippine Exporters Confederation, Inc. (PHILEXPORT) and the Philippine government’s Department of Trade and Industry (DTI).

“We learned that it provides advantages not only to our company but also to other Philippine exporters who sell products to the EU. The elimination of tariffs on over 1,000 Philippine products under GSP+ can enhance exports and increase competitiveness.”

Sustainable partnership with the government

Pete expressed their appreciation for the continued support from the DTI.

The company received training, seminars, participation in trade shows, support in product development, and business matching and networking.

“The agency allowed us to know customers better – their European culture and design preferences. By knowing the market, we can tailor-fit our products and innovation to match their needs,” Pete shared.

DTI’s publications were instrumental in Nature’s Legacy products getting noticed by the buying public. Pete and Cathy’s engagement in various missions and programs added to the buyer’s familiarity with the products.

Walking the talk

Pete and Cathy have not forgotten their original resolve to support their community through their business.

Some of the 89 current employees of the company are second-generation workers who are equipped with higher education.

“We make sure to take care of our employees’ basic needs like food, clothing, and shelter. We also provide them with subsidized housing and quarterly bonuses,” shared Cathy, who, together with her husband, believes in the Sustainable Development Goals in uplifting the lives of their workers.

Their employees live a mere 15-minute walk from their factory in Cebu and are therefore contributing to reducing the carbon footprint of their operations.

Looking upwards with ARISE Plus

Upon the recommendation from PHILEXPORT, the company was engaged in the ARISE Plus Philippines project, an endeavor designed to support small- and medium-sized businesses in the country and open new doors of opportunity.

“Our aspiration is that, with the support of ARISE Plus, we can expand our reach to more buyers and customers who prioritize and share the same values of Sustainability, Circularity, and Innovation,” said Cathy.

This is also in line with Pete and Cathy’s future goals for Nature’s Legacy.

Pete and Cathy, tenacious experts who never give up, plan to introduce into the market a compact yet revolutionary shelter for people facing disasters or in need of temporary lodging during a transitional period.

The envisioned shelter is a breeze to assemble, making it an ideal solution for women and elderly members of the community looking to contribute to building a resilient dwelling during trying times.

Nothing is holding back the couple in daring to undertake innovative solutions, making smart choices with the use of ingenious materials to produce a quick-to-install shelter.

The ARISE Plus Philippines project is enabling Philippine exporters to take advantage of European Union (EU) market access and the trade privileges granted under the Generalized System of Preference (GSP+). It supports the overall EU-Philippines trade relationship and trade-related policies.

ARISE Plus Philippines is a project of the Government of the Philippines, with the Department of Trade and Industry as lead partner together with the Department of Agriculture, Food and Drug Administration, Bureau of Customs, the Department of Science and Technology, as well as the private sector. It is funded by the EU with the International Trade Centre (ITC) as the technical agency for the project.

A bagful of success

Trendy PH handbags impress fashionistas in Europe

By Knowledge Management and Information Service
August 10, 2023

MAKATI CITY – Jennifer Lo is a living proof that an eye for aesthetics can be inherited. Based in Makati City, Metro Manila, the third-generation entrepreneur has carried on her family’s business of handicrafts – the Larone Crafts, registered in 1984.

Growing up, she helped her mother during trade shows, observing how business was conducted with foreign buyers and taking minutes of business meetings.

After completing a short course on Manufacturing Management at the Fashion Institute of Design and Merchandising in Los Angeles, United States of America (USA) in 2006, she worked with various fashion companies before coming back to the Philippines to help in her mother’s handbag business.

“I’m the steward of my parents’ and grandparents’ hard work. My goal is to make the business sustainable for another 20 years,” shared Jennifer.

Operating out of a compact 500-square-meter office that includes a production area and warehouse on the top floor, she exudes a hands-on demeanor.

Tradition à la mode: When tradition meets fashion

Larone Crafts’ designs are modern but remain true to Pinoy traditions by incorporating Tinalak weaves and the woven fabric Inabel. Natural plant fibers such as abaca, raffia, and seagrass sourced from all around the Philippines add an indigenous charm to her products.

The results are timeless accessories that buyers can keep in their wardrobes season after season.

“The bags are meant to be used all year round. We do not make items that are just for a certain season to be thrown away the next. We manufacture them to last.”

In the collection of Larone Crafts’ handbags, the signature hand-embroidered clutch bags are a particular hit with buyers.

Carrying on the export mission

The agility of Larone Crafts in staying abreast with technological advancements and design trends has kept it exporting successfully over the years.

The company’s first exports were made in 1984 to the USA. Back then, Jennifer was only three years old.

“I can see how conducting international business at a time when the Internet was not yet existing must have been quite a challenge,” said Jennifer, expressing her appreciation for the ease and speed that technological advancement has brought about over the years.

In 2009, when Jennifer joined the company, she continued to step up to evolving market trends.

“Smaller niche brands were coming into the field. Rather than large containers of orders with thousands of pieces of the same style, orders of several styles and colors in a few hundred pieces were preferred.”

In 2022, following the pandemic, 3% of Larone’s customers were from the European Union (EU), 90% from the USA, and the rest a mix from other countries.

Going international with help from the government

For a long time, the only way to start an international business was through participation in trade fairs, which is not an easy thing to do alone.

The company has been part of the Manila FAME almost every year since the 1980s. Showing at Maison et Objet, NY Now, and Ambiente over the last 10 years has also been fruitful.

“We received support from the Center for International Trade Expositions and Missions (CITEM), the export promotion arm of the Philippine government’s Department of Trade and Industry (DTI), to participate in international trade shows in the EU and in the USA. Before the internet and emails, this was the only way of gaining new overseas customers.”

Jennifer feels that her company’s participation in these trade shows has been instrumental in reaching customers, particularly in the EU. Trade shows boost market research, linkages, design aesthetics, and competitiveness.

She emphasized that CITEM’s support in terms of product design, booth design and implementation, and pre-show marketing has been invaluable in upgrading her business.

“These are all high costs that would be difficult for our small business to absorb when initially trying to enter into a new market.”

GSP+ for the EU

Jennifer sees many benefits from the EU Generalized System of Preference Plus (GSP+).

“The EU GSP + makes our products more competitive in the EU market by reducing the cost of importing our goods into the country for our buyers. It improves access to the 27 countries in the EU.”

Larone Crafts is already exporting to Spain and the Netherlands, with samples sent recently to Italy which are expected to generate more orders.

“The EU is an attractive export market for our company because of the ease of doing business with their bilingual teams, the market’s love for sustainable, handmade, and natural products, and the favorable trade policies such as the GSP+.”

Leaving no one behind

As Jennifer works towards expanding her product assortment in home and lifestyle products, she is cognizant of those who work for her.

Depending upon the volume of orders, in any given season, she employs approximately 100 workers.

She not only retained artisan families from her mother’s time, but also sources from small businesses that employ women.

“We work with weavers and artisans in their communities from all over the Philippines, giving them a reliable livelihood and helping to preserve the region’s traditional crafts.”

The ARISE Plus Philippines project is enabling Philippine exporters to take advantage of European Union (EU) market access and the trade privileges granted under the Generalized System of Preference (GSP+). It supports the overall EU-Philippines trade relationship and trade-related policies.

ARISE Plus Philippines is a project of the Government of the Philippines, with the Department of Trade and Industry as lead partner together with the Department of Agriculture, Food and Drug Administration, Bureau of Customs, the Department of Science and Technology, as well as the private sector. It is funded by the EU, with the International Trade Centre (ITC) as the technical agency for the project.

Moneyed kin, personal coffers paved Senate victories in 2022

Senatorial candidates in the 2022 polls won fresh terms by financing their campaign with money from family members and money from their own pocket.

By CHERRY SALAZAR
Philippine Center for Investigative Journalism
May 10, 2023

Loren Legarda won big time in her comeback bid in the Senate last year, coming in second with 24.3 million votes. She got a lot of help from her son and father, whose combined contribution to her campaign kitty totaled P136 million, based on her own declarations.

Sherwin Gatchalian reported receiving a hefty P89 million from three family members, while Juan Miguel “Migz’’ Zubiri and Joseph Victor “JV’’ Ejercito each accepted at least P20 million from their parents to secure fresh terms in the Senate during the 19th Congress.

Zubiri was eventually elected Senate president.

It is expensive to run for office in the Philippines. The 12 winning senators reported a total campaign spending of P1.5 billion in their SOCEs, an amount that watchdogs said may be an underreporting. Three candidates ran ads on mainstream media that were worth more than P1 billion, based on published rate cards or before discounts were given to the candidates.

Billionaire donors and business executives have always played key albeit covert roles in the campaign of national candidates.

But the 2022 senatorial race showed that some candidates relied more on the money of family members as well as their own to fund their campaign.

Election lawyers said receiving financial support from relatives could lead to a possible conflict of interest especially if the family members also have business interests.

“[T]here is a tendency for campaign contributors to be able to dictate or influence the candidates should they win the election. So when you have a business interest… then this particular influence is magnified,” said lawyer Izah Katrina Reyes, policy consultant of poll watchdog Legal Network for Truthful Elections (Lente).

The “quid pro quo agreement” for a business to benefit from the influence of an incumbent official can be “really a possibility,” Reyes said.

Election lawyer Donnah Guia Lerona-Camitan said it also “raises questions whether elected officials can make impartial decisions against the interests of their family businesses for the benefit of the public’s interest.”

Six of the 12 winning senators received a total of P291.91 million from their own families, according to the statements of contributions and expenditures (SOCEs) that the candidates submitted to the Commission on Elections (Comelec).

Family and personal funds accounted for a fifth of the P2.18 billion total spending reported by 48 candidates in their SOCEs. Sixteen candidates did not submit a finance campaign report to the Comelec.

Two neophyte senators – Mark Villar and Rafael “Raffy” Tulfo – funded their campaign from their own pocket. Their combined campaign bill ran up to P170.61 million, based on their SOCEs.

A “limited or confined support base,” such as electoral campaigns largely funded by relatives or personal money, is not ideal, Reyes told Philippine Center for Investigative Journalism (PCIJ) in an interview.

“What we really want is a more distributed support base for our candidates in terms of seeing their campaign contributions… We want more active participation from our voters and the public,” she said.

Top donors backed Legarda

Two of the top five donors backed the campaign of Legarda, who came in second behind actor Robinhood “Robin’’ Padilla.

Her son Leandro Leviste gave her P100 million, while her father Antonio C. Legarda shelled out P36 million. These account for 86 percent of the senator’s declared contributions.

Leviste is the founder and president of solar energy firm Solar Philippines.

According to an earlier PCIJ report, Leviste’s Solar Philippines cornered a significant share of the government’s Green Energy Auction Program (GEAP), a Department of Energy program that allows renewable energy developers to bid for supply contracts at a set ceiling price.

During the first auction in 2022, the firm won 90.58 percent of auctioned solar capacity, or 1,350 of 1,490.38 megawatts (MW), and 70.16 percent, or 1,380 of 1,966.93 MW, of renewable energy capacity across all technologies.

Solar Para sa Bayan Corp., a subsidiary of Solar Philippines, also received a 25-year distribution franchise from Congress which then President Rodrigo Duterte signed into law in 2019. At the time, Legarda held the lone congressional seat for Antique province.

Some lawmakers, renewable energy groups, and energy advocates opposed the legislative franchise, as it “effectively grants a monopoly and exempts one private company from the rules of competition and oversight.”

Former Comelec Commissioner Luie Guia said a donor’s relationship with a candidate, “whether there is a violation or not, is already a red flag for a potential conflict of interest.” But he added that it is more important that disclosures are honest.

Legarda said she did not defend the bill on the floor and abstained from voting “out of delicadeza” because the firm is owned by her son. “In fact, I would always be out to make sure that there is no conflict,” she said in 2019.

Reyes said Legarda’s abstention was “a good start to maintain neutrality…but what we don’t see are the discussions maybe among colleagues.”

Currently, eight bills on solar and renewable energy are pending at the committee level in the Senate. None of the bills were authored by Legarda, but she has publicly supported green initiatives in the past.

Gatchalian and family firms

Family and business partners helped Gatchalian secure his reelection. He ranked fourth in the race with 20.6 million votes.

More than half of the contributions he received, or P81.91 million, were from his kin: over P58.41 million from his mother Dee Hua; P15.5 million from his brother Kenneth; and P8 million from his maternal aunt Elvira Ting.

Dee Hua is the second top individual donor, next to Leviste.

The Gatchalians have interests in various industries from plastic manufacturing to hotels and casinos, banking, and mining.

Earlier this year, Kenneth, director of Altai Philippines Mining Corp., was embroiled in a controversy over alleged illegal mining operations in biodiverse-rich Sibuyan Island in Romblon. Protesting residents accused the company of operating without necessary permits and violating environmental policies.

The senator himself owns 9.71% shares in Wellex Industries, Inc., a mining and oil exploration firm, according to the company’s reports to the Philippine Stock Exchange (PSE) as of April 2023.

In separate bills, Gatchalian proposed amendments to the Oil Exploration and Development Act and the Philippine National Oil Company charter. He also proposed income tax incentives for petroleum service contractors. These bills were referred to the committee on energy, where he sits as vice chair.

Bills on the suspension of excise taxes and value-added tax on petroleum and petroleum products were also referred to the ways and means committee, which he chairs.

The Gatchalian family was also earlier linked to at least nine offshore companies, according to the Pandora Papers. The family’s legal counsel claimed that the offshore companies were incorporated for “legitimate investment purposes” with plans to venture into “global trading.”

Gatchalian’s other backers included Sergio Ortiz-Luis and wife Margarita, who chipped in P9.5 million and P2 million, respectively, to his campaign.

Sergio is the president and chief executive officer of Philippine Exporters Confederation, Inc. and chairman of the Philippine Chamber of Commerce and Industry. He also sits on the board of Gatchalian-owned businesses, including Waterfront Philippines, Inc.

Waterfront subsidiaries won government contracts worth P234.5 million between January 2021 and March 2023, according to data from the Philippine Government Electronic Procurement System (Philgeps).

Of these, 86.7 percent were sealed through direct contracting and negotiated procurement.

Direct contracting does not require submission of voluminous bidding documents, such as price quotation or a preliminary (pro-forma) invoice with conditions of sale. Negotiated procurement, on the other hand, is resorted to under “extraordinary circumstances” such as two failed biddings.

The law distinguishes between individual and corporate donors, but Lerona-Camitan said it is “a red flag” if there is a “direct and causal link” between an individual donor and a company that holds government contracts.

“This would be an indirect violation of the Comelec prohibition,” she said. “What cannot be done directly cannot also be done indirectly.”

The Omnibus Election Code prohibits natural and juridical persons who hold contracts or subcontracts to supply the government with goods and services from making campaign contributions.

Parents for Zubiri, Ejercito

The parents of Zubiri and Ejercito also poured money into their campaign, propelling them into the winner’s circle. Zubiri ranked eighth with 18.7 million votes, while Ejercito placed 10th with 15.8 million votes.
Zubiri’s mother Maria Asuncion and his mother-in-law Lourdes Tan donated P20 million each to his campaign.

His other top donor is businessman Francisco Tiu Laurel, Jr. who also gave P20 million.

Laurel also contributed P30 million to Partido Federal ng Pilipinas, the political party chaired by now President Ferdinand “Bongbong” Marcos, Jr.; and nearly P8.75 million worth of airtime in GMA Network for Padilla, SOCEs showed.

Laurel is president of Frabelle Group, which ventures into deep-sea fishing and aquaculture, food manufacturing and processing, cold storage, shipyard operations, and real estate, among others.

Frabelle Shipyard Corp., a subsidiary, won six different contracts from the Mines and Geosciences Bureau (MGB) between January 2021 and March 2023 totaling P15.69 million, according to Philgeps quarterly reports.

Laurel also has interests in the energy sector through Markham Resources Corp., which develops hydroelectric energy projects in northern Luzon and in Mindanao.

After the elections, Laurel was appointed as a member of the agriculture group of the Private Sector Advisory Council that was formed in July 2022. The group was expected to help the government address food security issues. Mr. Marcos concurrently serves as agriculture secretary.

Antonio Tan and his son Miguel Alissandro also donated P10 million each to Zubiri’s campaign. They are the corporate secretary and president, respectively, of real estate company MVT Group and cladding firm Fasclad, Inc.

Ejercito, for his part, disclosed getting P20 million from his father, former President Joseph Ejercito Estrada, and P10 million from his mother, former San Juan City mayor Guia Guanzon Gomez.

The senator also received P10 million from Edward William Tan, founder and director of the Brent Group, distributor of liquefied petroleum gas and other petroleum products, among others.

Ejercito called for the suspension of excise tax on fuel to mitigate soaring prices of petroleum products during the campaign.

Meanwhile, Ejercito’s brother Sen. Jose “Jinggoy” Estrada did not report receiving support from the former president. He identified several media outfits as donors in his SOCE. The outfits denied this.

Estrada secured the 12th spot with 15.1 million votes.

Cousin, sibling support Hontiveros, Cayetano

Reelectionist Sen. Ana Theresia “Risa” Hontiveros reported a P3-million contribution from her cousin Marianne, former chair of AirAsia, Inc., while returning Sen. Alan Peter Cayetano disclosed receiving P500,000 each from his brother Rene Carl and sister-in-law Mary Bianca Calalang.

Outside the family, Cayetano also benefited from the contributions of big business, including P10 million from Jaime Santos dela Rosa of Puregold Price Club, Inc.

Puregold was awarded government contracts between January 2021 and March 2023 worth P1.67 billion, according to Philgeps data.

Cayetano’s other donors included businessmen Jorge Villacorta Pascual, Jr. of JJ Drilltek Corp. and Danilo Michael Yamsuan of Elaia Green Vehicles, each donating P10 million.

Yamsuan is the first cousin of Bicol Saro Partylist Rep. Brian Raymund Yamsuan, who also chipped in P10 million to Cayetano’s kitty.

Hontiveros placed 11th in the race with 15.4 million votes, while Cayetano came in seventh with 19.3 million votes.

Self-funded campaign for Senate neophytes

Villar and Tulfo financed their own campaigns in their first bid for a Senate seat, finishing sixth and fourth in the race and garnering 19.5 million votes and 23.4 million votes, respectively.

Villar’s campaign cost him P131.86 million. He is the son of real estate mogul Manuel “Manny” Villar, Jr., who topped Forbes’ list of Filipino billionaires in 2023 with a net worth of US$8.6 billion.

Tulfo, a prominent and feisty broadcast personality, meanwhile, reported spending P38.74 million on his campaign.

His family is no stranger to politics and governance.

His wife Jocelyn Pua and son Ralph Wendell Tulfo are both members of the House of Representatives, representing ACT-CIS partylist group and the 2nd district of Quezon City, respectively.

His sister Wanda Tulfo Teo was the tourism chief for two years during the Duterte administration, while his brother Erwin Tulfo had a short stint as social welfare secretary during the first few months of the Marcos administration in 2022.

While self-funded campaigns may lead to greater autonomy and minimize external influence when a candidate gets elected, legislating or encouraging such may be considered “anti-poor,” Lerona-Camitan said.

“It would in effect bar less fortunate candidates from running for public office. Additionally, it would undermine the well-protected principle on equal representation enshrined under our Constitution,” she said.

Padilla’s ‘secret weapon’ not disclosed in SOCE

Padilla, who topped the race with 26.6 million votes, identified his biggest donor as Jose Arturo “Jay Art” Tugade, who pumped P10 million worth of airtime in GMA Network for the candidate.

Tugade, son of former Transportation Secretary Arthur Tugade, was appointed Land Transportation Office chief in November 2022, following a weeks-long stint as acting general manager of the Manila International Airport Authority.

In August 2022, Padilla proposed a cable car project to help address traffic congestion in Metro Manila. In the same month, a bill was filed by Sen. Ramon Bong Revilla, Jr. for the creation of a “mobility czar” office that will address transport and traffic issues. A similar bill was filed the following month by Estrada. Both Revilla and Estrada faced plunder and graft charges in relation to the multi-billion “pork barrel” scam.

The measures were referred to the committees on public services, constitutional amendments, and finance. Padilla chairs the committee on constitutional amendments.

In a social media post in June last year, Padilla shared that he owed his victory to former President Gloria Macapagal-Arroyo, her husband Jose Miguel “Mike” Arroyo, and their son Juan Miguel “Mikey” Arroyo.

Padilla called them his “secret weapon.”

“Ngayon naman eleksyon, nabalitaan ni ninang (Gloria Macapagal-Arroyo) wala akong logistics. Nagsagawa siya ng mga conference at convention para sa akin,” Padilla posted.

“Inikot ako sa Pampanga at sa Iloilo. Sagot lahat ni FG (Mike Arroyo). Wala akong kagastos-gastos. Kaya ang naging katapos-taposan (sic) number 1 ako sa Pampanga! At kahit hostile and Iloilo sa Uniteam, ako ay nakakuha ng mataas na boto,” he said.

However, Padilla did not include any of the Arroyos in his campaign finance disclosures. He listed only 15 individual and corporate donors.

This should prompt a Comelec investigation, said Guia. “All donations need to be reported; that is the law. Violation is an election offense.”

Lente executive director Rona Caritos agreed. But Caritos, a lawyer, also acknowledged that the poll body’s campaign finance office “is undermanned, understaffed, [and] the skill set of most of the individuals [comprising] the office… is not compatible with their duties and functions.”

Gov’t contractors, new appointees

Returning Sen. Francis “Chiz” Escudero and reelectionist Sen. Joel Villanueva benefited from the donations of government contractors.

Escudero finished fifth in the race with 20.3 million votes, and Villanueva ninth, with 18.5 million votes.

Escudero received P30 million from Lawrence Lubiano, president of Centerways Construction and Development, Inc. The amount is less than 1 percent of the construction firm’s awarded contracts.

Centerways bagged P5.75 billion worth of contracts between January 2021 and March 2023 from Department of Public Works and Highways (DPWH) offices in the Bicol region, according to Philgeps data.

At least P2.43 billion worth of DPWH projects awarded to Centerways was undertaken in Sorsogon province, where Escudero served as governor from 2019 to 2022.

Maynard Ngu, chief executive officer of Cosmic Technologies, Inc. (Cherry Mobile), also contributed P30 million to Escudero’s senatorial comeback. Ngu also donated mobile phones worth P1 million to Padilla in kind.

Between January 2021 and March 2023, Ngu’s company won P1.73 billion worth of contracts from local government units and the Department of Education.

Lubiano and Ngu are among the top five donors in the 2022 senatorial race.

Escudero also received P10 million from Arnel Isilen Peil of A.I.P. Construction, which won P1.74 billion worth of government contracts between January 2021 to March 2023, Philgeps data showed.

Escudero’s donors got presidential appointments after the May 2022 vote.

Ngu was appointed special envoy to China for trade, investment, and tourism in March. Leo Tereso Magno, who donated P10 million to Escudero, was also appointed presidential assistant for Eastern Mindanao in November last year.

Magno, board chairman and chief operating officer of the Rizal Memorial Colleges, said his office cannot approve projects and contracts but is tasked to monitor and evaluate the implementation of such in the region.

Josue Gocella Tesado and Jessimar Catatista Panisales, both linked to Davao-based construction and trucking firms with government contracts, also donated P10 million each to Escudero’s campaign.

Tesado and Panisales, respectively, are secretary and treasurer of Maxan Construction & Trucking Services, Inc., according to Securities and Exchange Commission (SEC) records.

Maxan bagged P819 million worth of government contracts between January 2021 and March 2023, according to Philgeps data. Nearly 85 percent of this amount, or P693.84 million, are for hauling services of garbage and shredded currency notes.

Tesado also leads the San Josue Group, which ventures into real estate and leasing, metal roofing manufacturing, container yard operations, and banana plantations, among others.

Meanwhile, Villanueva received P20 million from a certain Ben Co.

Real estate firm New San Jose Builders, Inc. (NSJBI), founded by housing czar Jose “Jerry” Acuzar, also donated P20 million to the campaign of Villanueva.

NSJBI emerged as the top corporate donor in the senatorial race. It supported only Villanueva.

Lerona-Camitan acknowledged that “[m]aintaining impartiality in the face of direct or indirect influence from campaign donors can be challenging.”

But she said a public official’s decision-making “should never be swayed” because his or her authority “stems from the collective will of the majority who elected them, rather than the financial contributions they received during the campaign period.”

The election lawyer said it should be incumbent upon public officials “to refuse support from persons who may have potential conflict of interest or from those people who may have business interests in their campaign.”

Poll watchdogs have repeatedly called for stronger transparency and accountability legislation. Pending since the 17th Congress, a proposed “Comelec integrity bill” seeks to reinforce the independence of the poll body by providing office spaces separate from local governments and appropriating funds from the annual government budget, among others.

As of March this year, a technical working group has been formed to deliberate on the measure.

Wonders of the Coconut

By DTI-MSG-Knowledge Management and Information Service
March 3, 2023

Eating without guilt

Almost 12 years ago, the doctors made it clear to Leyte-born Andy Albao that he would need to adopt healthier diet options if he was to fully recover from his kidney ailment. With his condition, he switched to an alternative and healthier food sweetener, the coco sugar.

Soon, he and his family – including his four children – began using coco sugar for their dietary requirements. However, sourcing affordable coconut sugar was difficult, and this is when Andy’s interest in developing coconut by-products germinated.

At the time, Andy was running a smooth business from Makati supplying industrial spare parts.

Turning a quest into an opportunity

The need and drive towards a healthier lifestyle led to the founding of Andy Albao’s Corporation - CocoWonders in 2011. Andy’s personal interest in using coconut sugar led to the company to produce 60 coconut products including coconut jam, coconut chocolate spread and virgin coconut oil.

Today, the entrance of the administrative office premises of Coco wonders in Makati City is adorned with a range of value-added coconut products indicative of the many uses of the fruit.

Award-winning export journey to Europe

Set up with an initial capital of 2.5 million pesos (approximately $135,000 today), CocoWonders was already exporting coconut products to Australia after obtaining the FDA certification by the third quarter of 2011.

Initially, the export revenue was approximately $10,000 per year. Today, it stands between $50,000-$60,000 per year with 35 permanent employees providing their services.

The company now exports to all major markets including Spain, Netherlands, Switzerland, Poland and the Czech Republic in the European Union, where CocoWonders enjoys a good following.

Approximately 40% of Cocowonder’s production is exported to the EU.

The European market holds a special place in Andy’s heart. “European buyers are aware and have the purchasing power. In 2014, we began exporting to Europe as well. We penetrated more markets than others and have been awarded ‘Best SME’ by the Philippine Coconut Association (PCA) and the Department of Agriculture (DA) two years in a row, in 2020 and 2021.”

Andy grows coconuts at a rented farm in Quezon, that are processed at his production facility nearby.

All these years, the family has been working hard to achieve excellence with two sons helping their father with accounts and production. With progressive introduction of automation, today approximately 70% of production is mechanised. While business is going well, there are some challenges.

“The war in Ukraine resulted in lower sales, but we continue. Most of the customers in Europe are health conscious and do not compromise on that.”

Andy is hopeful that the situation will improve soon.

Do that which is needed

The Philippines is one of the major producers of coconut sugar in the world. CocoWonders produces coconut sugar that is EU organic certified and compliant with good manufacturing practices (GMP).
In fact, this is one of the first requirements that Andy recalls he had to meet before beginning to export to Europe

“In 2013, I participated in Anuga Trade Fair held in Germany. Customers did not buy from us because we were not EU organic certified at that time.”

He then set himself the duty to correct this quickly.

“In 2015, we applied for organic certification. This opened the doors for us to European buyers.”

Andy worked with Netherlands based Control Union Certifications to obtain the required certifications.

Support from government

Andy fondly recalls the support he received from the Centre for International Trade Expositions and Missions (CITEM), the export trade promotion arm of the Department of Trade and Industry (DTI).

Certified endorsement from DTI to participate in the international fairs, renting of appropriate exhibition space, and support with visa requirements has always been useful, according to Andy.

Being a member of the Virgin Coconut Oil Producers and Traders Association of the Philippines (VCO Philippines) was also instrumental for Andy in maintaining a strong connection with the DTI to receive support to participate in international trade fairs. The company also improved its marketing thanks to government support.

He attributes his company’s achievements in the export arena to being actively engaged with DTI to remain on top of the latest developments for Philippine exporters.

Accessing the EU market through the GSP+

The DTI also enabled CocoWonders to register in the EU’s Registered Exporter system (REX system), a system of self-certification of origin for exporters wishing to benefit from GSP+.

DTI assisted Andy along with other exporters in taking advantage of the EU-GSP+.

“Availing of the GSP+ has made me more competitive in the European market. Customers don’t need to pay tariffs once we avail of the GSP+. We don’t need to pay for Certificate of Origin every time we make a shipment. Now we just include our REX number in the commercial invoice, and we are sorted.”

As a result, exporting to Europe has become manageable for CocoWonders.

Expanding through ARISE Plus Philippines

With the opportunities available for coconut producers in Europe, Andy responded to the call for application launched under ARISE Plus Philippines for MSMEs in Coconut flour and VCO interested in receiving support on Export Marketing and Market Linkages, including the EU market.

Offered in partnership with the DTI and private sector organizations, the support package is providing CocoWonders and others with comprehensive capacity-building through coaching and training on branding, marketing, and export strategy and planning, as well as preparation for trade fairs, including sales and negotiations. Selected beneficiaries may also benefit from the support to participate in trade fairs and other trade events, including overseas.

Marawi buildings – with a price tag of P10B – are ready but empty

Marawi homes remain in disrepair as P10-B is poured into the construction of government buildings. Displaced residents are now pinning their hopes on the newly constituted Marawi Compensation Board. But big challenges lie ahead.

By CARMELA FONBUENA
Philippine Center for Investigative Journalism
March 2, 2023

The bridges and the roads in Marawi City are sparkling and brand new, but close to six years since followers of jihadist group Islamic State laid siege to its city center, it’s still the sight of abandoned and bombed out homes that immediately welcome visitors of the former ground zero.

Past the Mapandi Bridge, which separated the safe zone and the battle area in 2017, the pink walls of a newly painted commercial building stood tall amid ruins. Nearby, a repaired house was painted a neutral gray. They were few and far between.

The former site of battles is now called MAA or the “most affected areas.” Life stood still here unlike the rest of Marawi City, called the least affected areas or LAA, where residents returned and rebuilt after the siege and new hotels have risen as well as coffee shops that cater to visiting donors and development agencies.

There was a heavy downpour when the Philippine Center for Investigative Journalism (PCIJ) visited the MAA in late January. The first villages upon entry showed the presence of some residents, and a few tricycles and private vehicles drove by. The humming sound of electric saw and hammers hitting nails could be heard here and there.

But deeper into the MAA, there was hardly no one. There were new gates, but no work was done on the rest of the property.

Homes in these areas survived military air strikes during the battles. The government wanted to demolish many of them at the start of the rehabilitation work, citing safety considerations, but residents protested. The large graffiti of the names and mobile numbers of owners on walls pockmarked by bullets and bombs are declarations of ownership, an assertion of their right to decide what they would do with the property. A few cases of illegal demolition are pending in courts against Task Force Bangon Marawi (TFBM), the agency in charge of rehabilitation.

Time has doomed the abandoned Marawi homes to decay. But not the government buildings. They were bright and shiny. New barangay complexes, which cost almost P14 million each, have been completed as well as village mosques and some school buildings. The police, jail, and fire stations were almost done.

Electricity lines were in place. There was no power yet but the MAA is expected to be connected soon. There were sun-powered light posts, too. It’s the water source that is problematic.

A total of P10.2 billion was released for the rehabilitation through the years. The big-ticket infrastructure projects could be seen past the rows of derelict homes, where modern public infrastructure was built by the banks of scenic Lake Lanao. Many buildings were ready, but without the residents, they were empty.

Samira Gutoc, an NGO leader, said the residents’ return to their properties should have been the priority. She has been fighting for residents’ right to return “without conditions.”

“Each house is crying for help. Naging secondary na ang bringing back people. Di ba ‘right to return’ naman ang battlecry (Bringing back people became secondary. Isn’t the battlecry ‘right to return’)?” Gutoc said.

Not even 1% of MAA residents have returned

Only 100 families have been permitted to return to the MAA after some repairs or reconstruction, based on data from TFBM, although residents claimed a few families have returned without government approval. It is not even one percent of over 17,793 households displaced at the MAA during the siege.

A total of 953 families were resettled in permanent shelters and 4,916 others are still in transitory shelters elsewhere. The rest have found temporary homes elsewhere.

PCIJ chanced upon Rashmina Macabago, 57, at her family compound in Brgy. Kapantaran. They secured a building permit before the pandemic hit in 2020, but they did not have the funds to repair the property. She and a few family members arrived with some construction materials to reinforce a post that was already tilting. They hoped to avert any further damage to the structure.

“Pera ang problema. Naghihintay kami sa ipamimigay. Wala pa rin (We don’t have the money. We are waiting for what they will give us. There’s none yet),” said Macabago.

Drieza Lininding, chairman of Marawi civil society organization Moro Consensus Group NGO, said many residents cannot afford the requirements to secure building permits, and not all who have permits already have the money to buy construction materials. Many others now live far away and cannot afford to return, he said.

The Marawi City local government unit (LGU) has so far only received 2,947 applications or 16.6% of households in MAA. Even for those who could manage to afford processing building permits, Lininding said there were fears that residents who have repaired their homes will no longer be eligible for compensation. They will need the assurance that it’s not true.

P10-B poured into government infra

The accomplishments of the rehabilitation can be seen at the banks of Lake Lanao, the heart of Marawi’s former city center which saw the fiercest battles and where the siege leaders were killed. All but a few old structures were demolished to make way for new buildings. It’s a reclamation area that the city government said is government property, but which residents are contesting.

The new Sarimanok Sports Complex can seat 3,700 spectators. The running track was newly painted and goal posts were already placed at the football field. It can host games for the youth not just in Marawi and Lanao Del Sur province but all over the country. Marawi Mayor Majul Gandamra’s smiling photo appeared in a banner on a makeshift stage, hung during his enthronement and coronation as sultan, a traditional leader. Events like this occasionally bring residents back to the MAA, but they leave as soon as the activities are done.

Adjacent to the sports complex is a one-hectare convention center that can host indoor events such as weddings of Marawi’s rich and powerful. Inside, there’s an auditorium with 1,000 seating capacity. Workers were already installing seats. An engineer introduced himself to PCIJ to say that visitors were not allowed yet, but the TFBM staff sorted it out immediately.

The white and green minaret of Bato Mosque, where the militants holed up with their hostages for months, now stands beside the newly built Marawi museum. Bato mosque itself has been reconstructed and has taken a modern look. The Grand Mosque, too, has been repaired and has changed its color from green to gold.

The rehabilitation work was divided into 22 projects, out of which 17 were completed or almost completed as of December 2022, according to TFBM’s December 2022 report. The rest of the projects are to be completed by December 2023, the report said.

More than half or 56% of the funds went to the National Housing Authority (NHA). It cost the agency P2.3 billion to clear bombs and debris and P3.17 billion to construct a road infrastructure, which has an underground facility.

The Marawi City LGU received almost P2 billion or 19% of the funds for the construction of projects such as the Grand Padian Central Market (P443.25 million), the Peace Memorial Park (P312 million), the Lake Lanao Promenade (P380 million), and 24 barangay halls.

The Local Water Utilities Administration (LWUA) was allocated about P1 billion for the construction of a Bulk Water System and Sewerage Treatment Plant, but the agency has yet to begin its work. TFBM Field Office Manager Felix Castro Jr. said they are expecting quicker action from the new head of the agency.

Marawi Compensation Board

Residents are now pinning their hopes on President Ferdinand Marcos Jr. to fulfill the failed promise of his predecessor. Marcos finally appointed the members of the Marawi Compensation Board (MCB), a body created under Republic Act 11696 to provide compensation for the loss or destruction of properties and loss of lives as a result of the 2017 Marawi siege.

Lawyer Maisara Dandamun Latiph, the newly appointed MCB chairman, told PCIJ the board will fast-track its processes. She said they are planning to conduct consultations in the next two to three months in order to finish the implementing rules and regulations (IRR) of the law.

The board aims to formally begin accepting claims by May or before the siege marks its sixth year.

She recognized that big challenges lie ahead. “We are expected to deliver our mandate to pay the monetary compensation for the personal properties as well as [compensation to the families] of [those who are] legally presumed dead and missing persons. We will also recommend interventions for further recovery and rehabilitation,” Latiph told PCIJ.

The board has an initial budget of P1 billion for the compensation of siege victims. The maximum amount claimants may receive is yet to be determined, she said.

Latiph, who once belonged to the NGO community, has the support of civil society organizations. They are counting on her to champion their causes.

Bean There, Done That: Exporting to the European Union

Philippine chocolate firm exports to the EU

By DTI-KMIS Information and Creative Service Division
January 16, 2023

New beginnings

It was in 2013, while finishing her university degree in Chicago, that Kelly Go got a taste of an American craft chocolate using Philippine-origin cacao.

From this point, her career aspirations became clearer. After graduation, she decided to learn more about this craft by enrolling in Le Cordon Bleu in Paris for a Diploma in Culinary Arts. This training further enhanced her knowledge and skills about the food business.

The love for food, culture, and chocolate directed her destiny in Germany where she deepened her expertise in industrial chocolate production.

“We saw the potential of elevating the fine chocolate market in the Philippines and an opportunity to pursue our shared dream to move back home and contribute,” Kelly shared.

Responsible production

Their company, Auro Chocolate, was eventually launched in 2017 as a tree-to-bar chocolate brand and social enterprise introducing community development programs and premiums above commodity price for supporting farmers.

With all beans directly sourced, Auro is promoting sustainability by working directly with local farmers to cultivating fine cacao beans, improving ingredients, and expanding retail products with unique and bold tropical flavours, such as dried mango.

From a team of 20 staff, it has grown to over 100 employees working towards the export of its products to the European Union (EU) and other countries since 2018.

We involve ourselves in every step of the process by consistently working with our partner farmers to enable them to produce fine quality cacao beans that meet international quality standards,” Kelly added.

Breakthrough

There were challenges to be hurdled before successful exports to EU could materialize.

“At selling events, people would question the quality of our products as chocolates from the Philippines are unheard of,” Kelly said.

To win the trust of consumers regarding chocolate products grown and made in the Philippines, Kelly must be abreast of mandatory procedural requirements.

The Philippine Department of Trade and Industry (DTI) – Export Marketing Bureau (EMB) assisted Auro in completing the mandatory regulatory requirements for exporting in EU. The Centre for International Trade Expositions and Missions (CITEM) further supported the company in organizing country booths in key international trade fairs such as Salon du Chocolat in France.

The initiatives worked wonders for generating interest in Auro’s fine cacao.

A plus for the business: GSP+

Sales have increased by almost 200% since the Covid pandemic. Auro is directly exporting to more than 15 countries with over 40 European chocolate makers using the company’s fine cacao beans to make Philippine-origin chocolate.

Kelly was delighted to learn that chocolatiers in the EU countries were using her company’s chocolate products. Being able to export to the EU means that Philippine cacao can compete globally with other well-known chocolate brands.

The EU’s Generalized Scheme of Preferences (GSP+) removes import duties from products coming into the EU market from developing countries, thus, Kelly was able to competitively price her products vis-à-vis other brands.

“Our chocolate bars are doing well due to GSP+, which serves as a gateway support to the EU market,” Kelly added.

Kelly is proud of her products being able to stand side-by-side with other internationally known brands, allowing her company to continue to grow business with their EU partners.

Gaining together

The resultant increase in sales has benefited Kelly, together with those who work for her company.

“Thanks to the GSP+ status, we have become part of the international cacao beans market, which led to an increase in our sales. This means there is a growing demand for our partner farming community’s beans, thus generating more income for them, while providing a stable market for their cacao.”

Moving Forward

Auro chocolates is ready to set higher standards of achievement under Kelly’s leadership:

“We have exciting plans. On the farm side, we are to launch more community initiatives that are interwoven with our current cacao program. We are also expanding our sourcing to introduce new, exciting origins of chocolates. Shifting to more environmentally friendly practices and materials across the supply chain is also on the cards.”

She leaves an inspiring message for aspiring exporters from the Philippines: “Do not feel intimidated when trying to apply for GSP+. DTI is there to assist you throughout the application and help make your brand marketable. It’s also a great opportunity for your products to be introduced and grow in the EU Market.”

Detained mother reunites with daughter after 30 years

By ICRC
October 20, 2022

MANILA – "Nasaan ang anak ko? (Where is my daughter),” asked Anne* looking straight at Jennifer*, who was introduced to her by a staff of the International Committee of the Red Cross (ICRC). Smiling, 36-year-old Jennifer pointed to herself. They had last seen each other over 30 years ago. Continuing to look at the younger woman with some disbelief, Anne recalled that her daughter had a birthmark somewhere around the nape of her neck. As she spotted it on Jennifer, they were both overcome with emotions and embraced tightly.

Jennifer was only six years old when Anne was offered a job as a saleslady in Malaysia. Like many Filipinos in search of a better life, she accepted it. “I did not tell my mother that I wanted to work abroad because she would have refused to let me go. So, I just left without a trace. I was sure I would come back and my family would understand me because I did it for them,” said Anne.

But the job in Malaysia turned out to be a scam. Anne was tricked into becoming an entertainer with a measly salary. When she was released from that job, Anne became a domestic help and then toiled as a construction worker.

After her contract ended, Anne returned to the Philippines in 2006. However, she did not go back to her family because she was afraid to see her mother. “I thought she would reproach me for what I had done. I convinced myself to pretend as if I were dead to my family,” she said, adding that she chose to settle in another village in Mindanao and started a farm.

Detained in the Philippines

In 2017, Anne was arrested in relation to armed conflict. The ICRC visited her at Taguig City Jail a few months after her arrest as part of its humanitarian mandate and activities in the Philippines. “We have been helping detainees all over the world for more than 150 years, focusing on people deprived of their liberty in relation to armed conflicts and other violence. We look into how detainees are treated during their arrest and detention and monitor their health and living conditions. We also help to restore and maintain communication between detainees and their family members,” explained Alvin Loyola, the ICRC staff who accompanied Jennifer to meet Anne.

Anne learned about the ICRC’s Family Visit Programme (FVP), under the Restoring Family Links (RFL) initiative, to help detainees separated from their loved ones because of armed conflicts. The RFL initiative involves tracing detainees’ family members, re-establishing and maintaining contact, reuniting families and seeking to clarify the fate and whereabouts of those who remain missing. Through the FVP, families of detainees can travel from their hometowns to visit their detained loved ones. “It is very important because it allows detainees to re-establish or maintain contact with their families and improves their psychological well-being,” said Mariegen Balo, ICRC staff.

Anne also desired to meet her daughter when she found out her whereabouts through relatives. But the programme was suspended in 2020 because of the COVID-19 global pandemic. When the travel restrictions were eased in 2022 and family visits resumed, the ICRC scheduled Anne’s long-awaited reunion with her daughter.

Together at last

In July, an ICRC team accompanied Jennifer to visit her mother, who is now detained at the Correctional Institution for Women (CIW) in Mandaluyong City. Anne said she did not know how she would approach her daughter, whom she had last seen three decades ago. “I wondered, should I ask for forgiveness first, or do I just hug her?”

But Jennifer, who had managed to beat the odds and graduate from college with her grandmother’s help, said her mother did not need to worry at all. Even though they had not been in contact for 30 years, Jennifer said she did not harbour any resentment against her mother. In fact, every year on 30 January – Anne’s birthday – Jennifer would put a post on social media in her honour. “The only photo I had of my mother was destroyed in a flood so I used photos of my siblings and me for the posts. I used to pray hard for the day that I would see her again,” said Jennifer.

The mother and daughter’s reunion happened just a few days after Jennifer’s 36th birthday, so the ICRC team asked Anne about her wish for Jennifer. “I wish her more happiness in life and that she may be given more opportunities,” said Anne.

As part of the FVP, Anne’s family will make two ICRC-supported visits every year to meet her. Now that she has been reunited with Jennifer, Anne said she looks forward to making up for lost time.

*Names have been changed to protect identity.

2021 Eastern Visayas poverty situation

22 in every 100 families in Eastern Visayas are poor

By PSA-8
October 14, 2022

TACLOBAN CITY - Poverty incidence among families in Eastern Visayas in 2021 was estimated at 22.2 percent. This implies that in 2021, about 22 in every 100 families in the region were poor or have income that were below the poverty threshold, or the amount needed to buy their basic food and non-food needs.

Among provinces, Eastern Samar posted the highest poverty incidence in 2021 at 29.4 percent, while Southern Leyte registered the lowest poverty incidence among families at 16.0 percent. Eastern Samar and Samar registered higher poverty incidences among families than the regional level in 2021, while the rest of the provinces posted lower poverty incidences than the regional estimate at 22.2 percent.

Significant improvements in poverty incidence among families were noted in Eastern Samar and Northern Samar. Poverty incidence among families in Eastern Samar dropped to 29.4 percent in 2021 from 40.9 percent in 2018. The province of Northern Samar, meanwhile, registered 19.3 percent poverty incidence among families in 2021, lower than the 27.6 percent in 2018. On the other hand, poverty incidence among families in Biliran significantly increased to 19.9 percent in 2021 from 13.7 percent in 2018. Samar registered 27.0 percent poverty incidence among families in 2021, significantly higher than the 22.2 percent in 2018 (Table 1).

Given the new master sample, PSA was able to generate reliable statistics down to the provincial level as well as for highly urbanized cities (HUCs). Poverty incidence among families for Tacloban City, the lone HUC in the region, was significantly higher in 2021 at 10.7 percent compared with its recorded 5.3 percent poverty incidence among families in 2018.

Around 29 out of 100 individuals in Eastern Visayas are poor

Poverty incidence among population in Eastern Visayas in 2021 was estimated at 28.9 percent. This implies that in 2021, around 29 in every 100 individuals in the region belonged to the poor population whose income were not sufficient to buy their minimum basic food and non-food needs.

Among provinces, Eastern Samar posted the highest poverty incidence among population in 2021 at 37.7 percent, while Southern Leyte registered the lowest poverty incidence among population at 21.5 percent. Eastern Samar, Samar, and Leyte (excluding Tacloban City) registered higher poverty incidences among population than the regional figure in 2021, while the rest of the provinces posted lower poverty incidences than the regional estimate at 28.9 percent.

Significant improvements in poverty incidence among population between 2018 and 2021 were noted in Eastern Samar and Northern Samar. Poverty incidence among population in Eastern Samar dropped to 37.7 percent in 2021 from 49.5 percent in 2018. The province of Northern Samar, meanwhile, registered 25.9 percent poverty incidence among population in 2021, lower than the 34.3 percent in 2018. On the other hand, poverty incidence among population in Biliran significantly increased to 27.2 percent in 2021 from 19.6 percent in 2018 (Table 2).

Further, poverty incidence among population in Tacloban City in 2021 significantly increased to 15.6 percent from 8.1 percent in 2018.

Subsistence Incidence among Families

The subsistence incidence among families in Eastern Visayas in 2021 was estimated at 7.2 percent. This means that in 2021, about 7 in every 100 families in the region have income below the food threshold or the amount needed to buy their basic food needs and satisfy the nutritional requirements set by the Food and Nutrition Research Institute (FNRI) to ensure that one remains economically and socially productive.

Among provinces, Eastern Samar posted the highest subsistence incidence among families in 2021 at 12.1 percent, while Northern Samar registered the lowest subsistence incidence among families at 3.7 percent. Eastern Samar, Samar, and Leyte (excluding Tacloban City) registered higher subsistence incidences among families than the regional figure in 2021. The rest of the provinces posted lower subsistence incidences than the regional estimate at 7.2 percent.

Significant improvements in subsistence incidence among families between 2018 and 2021 were noted in Eastern Samar and Northern Samar. Subsistence incidence among families in Eastern Samar declined to 12.1 percent in 2021 from 16.5 percent in 2018. The province of Northern Samar, meanwhile, registered 3.7 percent subsistence incidence among families in 2021, lower than the 7.2 percent in 2018. On the other hand, subsistence incidence among families in Biliran significantly increased to 6.6 percent in 2021 from 2.2 percent in 2018 (Table 3).

In addition, subsistence incidence among families in Tacloban City significantly increased to 2.1 percent in 2021 from 1.0 percent in 2018.

Subsistence Incidence among Population

Subsistence incidence among population in Eastern Visayas in 2021 was estimated at 10.4 percent. This translates that in 2021, about 10 in every 100 individuals in the region have income below the food threshold or the minimum amount needed to buy their basic food needs.

Among provinces, Eastern Samar posted the highest subsistence incidence among population in 2021 at 17.1 percent, while Northern Samar registered the lowest subsistence incidence among population at 5.8 percent. Eastern Samar, Samar, and Leyte (excluding Tacloban City) registered higher subsistence incidences among population than the regional figure in 2021. The rest of the provinces posted lower subsistence incidences than the regional estimate at 10.4 percent.

Significant improvements in subsistence incidence among population between 2018 and 2021 were noted in Eastern Samar and Northern Samar. Subsistence incidence among population in Eastern Samar decreased to 17.1 percent in 2021 from 22.0 percent in 2018. The province of Northern Samar, meanwhile, registered 5.8 percent subsistence incidence among population in 2021, lower than the 10.6 percent in 2018. On the other hand, subsistence incidence among population in Biliran significantly increased to 10.1 percent in 2021 from 3.5 percent in 2018 (Table 4).

Subsistence incidence among population in Tacloban City significantly increased to 3.3 percent in 2021 from 1.6 percent in 2018.

Food Threshold

In 2021, a family of five (5) in Eastern Visayas needed at least P7,819 per month, to meet the family’s basic food needs. This amount represents the average monthly food threshold for a family of five (5). This figure is 6.5 percent higher compared with the 2018 level of P7,345.

Biliran posted the highest food threshold among the provinces in Eastern Visayas with P8,471 average monthly food threshold for a family of five (5) in 2021. On the other hand, Samar had the lowest average monthly food threshold for a family of five (5) at P7,342 in the same year (Figure 5).

Increases in food threshold between 2018 and 2021 were observed in all provinces, except in Eastern Samar, which registered a -0.5 percent decrease in food threshold. Biliran posted the biggest increase in food threshold at 20.5 percent (Table 5).

Meanwhile, average monthly food threshold for a family of five (5) in Tacloban City was estimated at P8,075 in 2021. This registered an increase of 16.4 percent compared with its P6,940 level in 2018.

Poverty Threshold

The average monthly poverty threshold for a family of five (5) in Eastern Visayas in 2021 was estimated at P11,187, an increase of 7.4 percent from its 2018 level of P10,411. This represents the amount needed every month to meet the family’s basic food and non-food needs.

Among the provinces, the highest average monthly poverty threshold for a family of five (5) was observed in Eastern Samar at P12,052 in 2021. On the other hand, Samar registered the lowest average monthly poverty threshold for a family of five (5) at P10,525 in the same year (Figure 6).

Increases in poverty threshold between 2018 and 2021 were observed in all provinces, except in Eastern Samar, which registered a -0.5 percent decrease in poverty threshold. Biliran posted the biggest increase in poverty threshold at 16.8 percent.

Meanwhile, average monthly poverty threshold for a family of five (5) in Tacloban City was estimated at P11,564 in 2021. This registered an increase of 16.4 percent compared with its P9,935 level in 2018. 

Clustering of Provinces based on Poverty Incidence

All provinces in the country were clustered from 1 to 5 using poverty incidence among families as the clustering variable. Cluster 1 comprises the bottom poor provinces and Cluster 5 comprises the least poor provinces.

In 2021, two (2) provinces moved one (1) cluster lower from their cluster categories in 2018, namely Biliran and Samar. Two (2) provinces, Northern Samar and Southern Leyte, moved one (1) cluster higher from their cluster categories in 2018. The rest of the provinces maintained their 2018 cluster categories.

Among the provinces, only Southern Leyte was categorized as Cluster 4. Three (3) provinces, namely: Biliran, Leyte (including Tacloban City), and Northern Samar belonged to Cluster 3, while Eastern Samar and Samar were classified in Cluster 2.

Massive fraud observed in Philippine elections

Press Release
June 28, 2022

QUEZON CITY – The International Coalition for Human Rights in the Philippines (ICHRP) has completed its independent monitoring and assessment of the Philippine elections that took place on May 9, 2022. The main finding is that the election was not free, honest, or fair by international standards. It was a classic ‘guns, goons, and gold’ contest and marked by a successful massive social media campaign to rebrand the kleptocratic Marcos family’s brutal dictatorship as the golden age of Philippine politics. The return of the disgraced Marcos family to center stage in the Philippines is consistent with the feudal dynastic system that is the centerpiece of political life in the country.

Evidence gathered by the International Observers Mission

The Philippine Election 2022 International Observer Mission (IOM) was established as a response to Investigate PH’s independent international investigation into human rights violations in the Philippines. The IOM has had over 60 observers from 11 countries on the ground since April 1, who have meticulously documented the campaign, the vote, and the aftermath in various areas including Central Luzon, National Capital Region, Southern Tagalog, Southern Luzon, Central Visayas, Western Visayas, Eastern Visayas, and Mindanao. IOM observers included members of national parliaments, lawyers, trade unionists, church people, youth and students, educators, scientists, and human rights advocates. At various times, the IOM observers themselves were subjected to harassment and red-tagging by the police and military.

“The observers reported that the May elections showed a higher level of failure of the electronic voting system than ever before, along with a higher level of blatant vote-buying, a disturbing level of red-tagging of candidates and parties, as well as a number of incidents of deadly violence. A large number of voters did not get to cast their vote, and many had to trust that election officials would later put their marked ballot paper through a Vote Counting Machine, thus undermining the secrecy of the vote,” said Lee Rhiannon, former Australian Senator and Commissioner of the IOM.

Massive fraud and failure of the democratic process

The main conclusion of the IOM is that the recent Philippine national elections were a failure of the democratic process. The elections took place in the most repressive context seen since the time of dictator Ferdinand Marcos. Military and state officials openly campaigned against the opposition by red-tagging the Leni Robredo campaign, as well as other candidates for Senate and partylist groups. “Throughout the election campaign, the Duterte government continued its orchestrated campaign of state terror. As part of its war on dissent, the government marshalled the entire machinery of government, including the judiciary, the military and police; and government departments of education, social services, and local governments,” said Danilo Arao of the anti-election fraud organization Kontra Daya. The IOM observed soldiers in Eastern Visayas up to the election day intimidating people not to vote for Bayan Muna and other progressive party lists.

The May 9 election did not meet the standard of “free, honest, and fair” because of these prevailing conditions. It robbed voters of access to reliable information, access to voting places without intimidation, and a credible vote counting system. The IOM has reported election-related violations of human rights since early March in the form of political killings, shootings, abductions, death threats, political arrests, harassment and surveillance of candidates and supporters, large-scale red tagging, widespread vote-buying, media manipulation and repression, fake news, and harassment of journalists by the Marcos campaign. IOM researchers identified that the 2022 election results were the first time in five presidential elections in the Philippines that the number of votes garnered by an Automated Electronic System (AES) president is higher than the number one AES elected senator, suggesting massive fraud.

Rule of political dynasties

“The tendency towards a one-party state evident under the Duterte regime was omnipresent in the results of the May vote. In essence it was an exercise in para-military democracy fused with a system of feudal dynastic rule,” said Chris Ferguson, IOM Commissioner and former General Secretary of the World Communion of Reformed Churches. While there remain many political parties, most pay fealty to the Marcos-Duterte bloc. The opposition was all but wiped out in the Senate, with only one of the 12 candidates elected not allied with the Marcos-Duterte bloc in one way or another, and 3 political dynasties now controlling a quarter of the Senate seats. Similarly, the partylist system has been corrupted by dynastic politics to the point where only a shrinking sliver of the successful groups represent disadvantaged or marginalized sectors in Philippine society. “The partylist system should return to its intended purpose because now it is yet another failed attempt to democratize the Philippine political process,” continued Ferguson.

Democratic reforms needed within the Philippine political system

The results of the May election are the latest in a series of chronic failures of the Philippine political system to offer the economic and social reforms required to advance social rights and speaks to the need for major reform. These political reforms required to democratize the Philippine polity include removing the feudal family dynasties from politics, reviewing the efficacy of the AES and renewing the partylist system to give a greater voice to the marginalized and dispossessed sectors.

“For the international community and proponents of human rights, the results of the election represent a worst-case scenario. ICHRP’s concern is that the new Marcos-Duterte government will continue to provide legal and legislative cover for past and future human rights violations and crimes against humanity,” said Rev. Michael Yoshii, Commissioner of the IOM and member of the ICHRP Global Council.

Yoshii continued, “the return of a Marcos to the presidency and the virtual elimination of legislative opposition represents a huge challenge for the international community. There must be a renewed effort to strengthen civil society and the organizations representing the popular sectors. A renewal of the democratic foundations of Philippine society will be essential to combating the pervasive authoritarian tendencies in Philippine society.” This ultimately means elimination of oppressive institutions such as the National Task Force to End Local Communist Armed Conflict and reducing the role of the military in public affairs, both of which played such a strong anti-democratic role in the electoral process.

Monitoring and reporting of the international community

“Looking forward, there needs to be an intensified international focus on the new Marcos-Duterte government and their ongoing human rights record. The international community needs to strengthen the capacity of internal and external human rights organizations to monitor and report on the situation in the Philippines,” said Peter Murphy, Chairperson of the ICHRP Global Council.

“At the same time, the international community should continue to hold the outgoing Duterte team accountable for its abysmal human rights record. This work is underway at the International Criminal Court, and in the United Nations Human Rights Council processes, and can be pursued in national jurisdictions with Magnitsky-style laws. There should be no hint of a green light for continued human rights violations under the incoming Marcos-Duterte administration,” Murphy concluded.

A new leg and renewed hope for a single father in Mindanao

By ICRC
June 6, 2022

MAKATI CITY – “My heart is crushed each time my children ask for something that I cannot provide because of my disability,” says Ricardo Tapican.

In July 2019, Ricardo Tapican lost his right leg in a motorcycle accident. “I was riding home with my cousin and nephew after a long day at work when the brakes of my motorcycle failed,” he recalls.

Although his relatives, who were riding pillion, emerged unscathed from the accident, Ricardo suffered severe injuries in his right leg. “I thought I was going to die. On regaining consciousness, my first thoughts were of my children. I told my nephew to take care of them if anything were to happen to me,” says the 34-year-old single father of three.

The doctors told Ricardo that the severity of his injuries had left them no choice but to amputate his leg. To this day, Ricardo cannot believe what happened to him. “It’s been three years since the accident and I still cannot fully accept what happened. My disability has made life very difficult for me as a single father. I feel that the accident took a big part of me. I can no longer provide for my children,” says Ricardo, who is from Agusan del Sur in Mindanao.

The loss of his right leg made it difficult for him to land a stable, well-paying job. And the money he earned from odd jobs wasn’t enough to support his children, forcing him to send them to live with their mother and other relatives. It was a heart-breaking decision and not one that he wanted for his kids.

“My children are only 13, 12 and 9 years old. I could not take care of them on my own, especially with no stable income. I tried, but no one would hire me after knowing about my disability,” says Ricardo.

He tried to go back to his old job as a rubber tapper, but the once enjoyable job became an intensely challenging task with only one leg. “The uneven and sometimes muddy terrain made it difficult to move around with crutches. Several times I lost my balance and fell to the ground,” says Ricardo.

Finding solutions

But Ricardo is not giving up. He wants his children to finish school because he knows that an education will open many doors for them in the future.

“I had made a promise to myself not to neglect or let my children suffer just because their mother and I separated. When I was still a student, I didn’t take my education seriously; I want my children to finish school and not end up like me,” says Ricardo.

Determined to get his life back on track, Ricardo realized he needed an artificial leg. Three years after his motorcycle accident and following months of research, Ricardo came across the Facebook pages of the non-profit foundation Davao Jubilee Foundation (DJF) and the International Committee of the Red Cross (ICRC), which supports the DJF. He learned about DJF’s rehabilitation work with disabled people in Mindanao.

Ricardo travelled from his hometown, San Francisco in Agusan del Sur, to DJF’s Davao City office where, after an evaluation by the DJF staff, he was declared eligible to receive a prosthesis. Ricardo felt that God had finally answered his prayers.

“As a father and padre de pamilya [head of the family], I don’t want to depend on others to provide for my family. I can’t wait to complete my physical rehabilitation programme here at DJF and look for a decent job,” he says.

Ricardo’s physical rehabilitation journey started on 29 March 2022. The DJF provided him with a physical rehabilitation programme, including a custom-made prosthesis. He also received unconditional cash grants from the ICRC to meet his family’s basic needs.

“I was in disbelief when I first heard that I’d be given a new leg. It felt like a dream. But after arriving at DJF, the reality of what is happening started to sink in, that my dream of walking on two legs again is about to come true,” says Ricardo.

About Davao Jubilee Foundation

DJF is a non-governmental organization located in Davao City, Philippines, that provides a variety of physical rehabilitation services to disabled people and people in need of supportive braces, wheelchairs, artificial limbs or other mobility support devices. The DJF helps all disabled Filipinos, wherever they may be.

DJF’s physical rehabilitation services include physical therapy, custom manufacturing of artificial limbs, providing orthosis wheelchairs and mental health and psychosocial (MHPSS) counselling for disabled people. The ICRC’s close partnership with DJF has improved disabled people’s access to comprehensive and high-quality physical rehabilitation services, mitigating the challenging circumstances they face in the Philippines. The ICRC also supports the socio-economic needs of vulnerable DJF beneficiaries.

For more details, please contact Davao Jubilee Foundation at 0975-781-7514 or message them directly on their Facebook page (https://www.facebook.com/DavaoJubileeFoundation).

Weaving towards success

By LYNFA A. TAN
April 6, 2022

SAN PABLO CITY – For the longest time, creating handicrafts has been one of the major businesses in the Philippines. Handicrafts promotes the Filipino heritage and culture. In the Quezon Province, one of the most popular raw products is buli or the buri tree.

Buli is a common palm found in the Philippines and can live up to more than 30 years.

Being widely found and due to its life span of more than 30 years, the palm tree became a popular resource in the province. In fact, it became the inspiration for the Bulihan Festival every April in Sampaloc, Quezon Province. During this time, local producers and investors display their buri products.

Mary Ann Parado is a local Buli weaver and microentrepreneur who used to join this festival. She started making buli products in 2010, allowing her to sustain the needs of her family of five members. Her income from this business also supported the educational needs of her children.

However, Mary Ann’s road to success was not always smooth. There was a time when she almost lost hope. She received an order from three buyers who refused to make payments. This almost drained her capital.

This is also the time when she met CARD Bank, a microfinance-oriented rural bank. The bank does not only provide financial assistance but also access to microinsurance, business development service, marketing support and educational support to its clients. She later on became enticed with the benefits that CARD Bank offers. With the low interest and flexible payments, she decided to become a client.

Her first loan amounted to PhP5,000. Because she managed her fund well, she can now avail a higher loan that she can use in her other businesses aside from buri making. Her handicrafts like hats, bags and wallets are now distributed to various parts of the country. She has also started to customize her products to be used as gifts and souvenirs for birthdays and weddings.

During the COVID-19 pandemic, she also found ways to adapt to the new normal. She started online selling of her products, expanding her network nationally and internationally.

“If my life would be compared to a thing, it's definitely the buli. Producing a buli handicraft involves twisting, criss-crossing and entwining. But after the complicated process, it turns into a beautiful and useful product. Same goes with my life, there might be unpredictable twists in my fate, criss-crossing with my decision-making, and sometimes I might get entwined with problems, but still I know, everything will fall in their places,” Mary Jane shared.

Mary Jane has been a client of CARD Bank for twelve years, while her husband has also been a CARD client for four years. Through CARD financial assistance, the couple managed to sustain their business which is locally known as Prado Handicrafts. They have also availed educational loans for their children to support school maintenance. For them, the help they received from CARD is enough to keep their business alive despite the many challenges.

More dreams, zero dropouts

By CARD MRI
January 20, 2022

SAN PABLO CITY - The number of young people, who were left with no choice but to drop out of school, reached more than five million for the academic year 2021-2022.

There is no doubt that the COVID-19 pandemic has gravely affected the education of the Filipino youth today. The lack of tools such as mobile phones and load to access learning materials can be seen as one of the major setbacks experienced by children today. Now, parents search far and wide for means to let their children continue reaching their dreams. Nanay Maria Lina R. Habana is one of them.

Nanay Maria is a mother to five children, one of whom is Ma. Angela, who is in Grade 7 and is studying in Bula National High School in Camarines Sur. According to Nanay Maria, one thing that will make her happy is to witness Ma. Angela achieve her own dream of becoming a teacher.

Fortunately, with Ma. Angela’s perseverance and knack for learning, she became a consistent honor student from the time she stepped Grade 1 to Grade 6. Ma. Angela’s potential became Nanay Maria and her husband’s inspiration to work hard for their children, not only to fill their basic needs, but to support their individual dreams.

The Habanas are known to be hardworking. Nanay Maria buys and sells vegetables and other goods, while her husband works in a vulcanizing shop in Manila to get by with their daily expenses. However, education is a different matter altogether. With huge educational expenses left and right, financial assistance is needed to support their family altogether.

CARD Bank, a microfinance-oriented rural bank that supports marginalized communities with access to financial products, services, and other social development programs, became Nanay Maria’s partner in their journey to reach their goals in life. In her 12 years of being a CARD Bank client, she has availed the Zero Dropout Program of CARD several times to support the education of Ma. Angela.

The Zero Dropout Program is an educational loan product of CARD MRI that supports students’ education in elementary, high school, and senior high school. Offered exclusively to CARD MRI clients with children or relatives who want to continue studying, this loan has a maximum amount of PhP 10,000 for junior and senior high school. This is applicable to students like Ma. Angela who is currently in junior high school.

The financial aid that the Habanas received for Ma. Angela’s schooling eliminated the anxiety Nanay Maria had towards the education of her children, especially during a time when the COVID-19 pandemic impacted the Philippines’ educational system.

Now, Ma. Angela is in Grade 7. Even with schools closed and a threat of dropping out of school looming over the students’ heads, this does not weaken Nanay Maria’s faith in pursuing her and Ma. Angela’s dreams. For Nanay Maria and millions of other CARD clients, here is to more dreams and zero dropouts.

Ma. Angela is just one of the 1,235,768 beneficiaries of the Zero Dropout Program of CARD MRI as of December 2021. To know more about CARD’s educational loan, message CARD MRI at @CARDMRIOfficial or visit any CARD, Inc. (A Microfinance NGO), CARD Bank, CARD SME Bank, or CARD MRI RIZAL BANK branches or unit offices near you!

Taste of Home: Grace Dalisay’s car trunk surprise in Lemery, Batangas

By CARD MRI
November 26, 2021

SAN PABLO CITY – Sending good wishes to friends and loved ones has always been accompanied with big celebrations. May it be a beach party, a vacation abroad, or a get together with close pals at home, the Filipinos make time for special occasions and often celebrate it with a big feast.

Alas, the COVID-19 pandemic left families bereft of grand celebrations. Birthdays, weddings, and anniversaries were celebrated with small, immediate families, more often than not, at home.

The pandemic should have crippled businesses related to food, events, and party services, but one family in Lemery, Batangas, took the pandemic as a challenge and came up with a way to celebrate in a practical, fun, and safe manner.

Gracelda “Grace” Dalisay and her family were dining together, when a portion of cooked food and camote with cheese were left untouched. From here, they tried to sell the excess to neighbors who were more than enthusiastic to try Grace’s cooking. As days passed, the Dalisay family was urged to hold a small surprise for a few close friends who were celebrating their birthday, but due to the pandemic, this was no small feat. However, with the new seven-seater minivan they loaned from CARD SME Bank, the Dalisay family explored the idea of using the vehicle to hold what is now popularly known as a car trunk surprise.

These were the beginnings of Taste of Home, the Dalisay’s food delivery service that holds car trunk surprises for those celebrating their birthday, anniversary, and other special events in the comforts of their home.

A Taste of Success

The family business started in February 2020, ironically, at the onset of the COVID-19 pandemic to cater to families who want to celebrate special occasions without breaking the government’s protocol, which is set to immobilize the spread of the virus.

Together with her husband and her sister, Grace cooks an assortment of food including pasta, noodle dishes like pansit, various Filipino delicacies including maja and puto, sandwiches, spring rolls, and many more.

With a car trunk surprise, not only is food delivered to the doorsteps of a family, but it also prevents families from stepping out of their homes and risk compromising their health. It also brings incredible joy to families in the midst of a health crisis that affects the rest of the world.

Through word of mouth, Grace’s car surprise has reached different parts of Batangas, Cavite, and Laguna. According to Grace, their minivan became a big part of their lives as it brought them a steady source of income during the pandemic.

“The car we loaned is a blessing to us. We are grateful to CARD SME Bank for giving us a chance to own a car that we have never dreamt of using for our business. With the grace of God, we have never lacked anything because of this. I am really grateful,” Grace said.

Through her son, Grace and her family availed the Drive Ur Wheels car loan amounting to P1,000,000 from CARD SME Bank, a full-fledged thrift bank that provides financial assistance, microinsurance, and other community development programs to microentrepreneurs and their family.

The Journey with CARD

Grace has been a client of CARD since 2007. From CARD, Inc., she was then transitioned later to CARD SME Bank. Therefore, CARD has been a witness to her journey from being an overseas Filipino worker to a cook in a small restaurant in Mahayahay in Lemery, Batangas, to finally being a businesswoman of her own car trunk surprise service.

CARD was also present in her children’s life, particularly with her second youngest son, Victor Manuel, who was a recipient of the educational loan during his time at Batangas Science High School.

Aside from these milestones, Grace is also now an authorized konek2CARD Agent in their community since May 2021. A konek2CARD Agent is a trusted partner of CARD in bringing konek2CARD, its mobile banking service, closer to clients in the community. Through agents like Grace, clients of CARD SME Bank can withdraw, deposit, pay their bills, and settle their weekly dues without going to the bank.

Grace is currently holding 14 centers with a total of P250,000 collected payments weekly and P1,000,000 monthly. Through konek2CARD, Grace earns an extra income that she uses for leisure activities to bond with her husband and their children.

If there is one thing the Dalisays are good at, it is celebrating small wins in life and sharing their family’s love and joy with other people. With Taste of Home, Grace and her family believe that people can still celebrate and create memories with their loved ones even in the midst of adversities.

Braving storms; One Paborita at a time

By CARD MRI
August 27, 2021

SAN PABLO CITY – The outpouring rain brought by Typhoon Glenda may have torn through the Philippines in 2014, but it has also watered the beginnings of Fadullo’s Bakery and their paborita business. Specializing in soft bread, Irene Fadullo and her husband have been in the baking business in Lipa City, Batangas since 2008. Four years later, the couple ventured into baking paborita crackers, but it did not become popular in the market instantly. They lacked the necessary permits to continue the production of the paborita.

However, opportunity stormed through the Fadullos as they weathered Typhoon Glenda with fresh will and perseverance. As a great demand for paborita dominated the market, the Fadullos worked day and night through the power cut in Lipa, Batangas to produce their biscuits. At first, they had to leave one bundle (100 pcs.) of paborita in the market and wait for a call to retrieve their unsold crackers back to their bakery. One day, an unexpected call came asking for more paborita to be delivered to them.

From then on, the Fadullos started delivering 30 bundles to the market every week. As their production grew, their need for extra capital also intensified. They sought the help of CARD SME Bank in growing their business, starting with a P2,000 loan which helped them to purchase flour. To increase their production, they decided to loan P10,000 to buy a secondhand oven. This helped them in constantly supplying their growing market for paborita.

Now, the Fadullos have increased their capacity by employing their relatives as well as students with their parents’ consent. This allows them to provide a source of living to their community and train the youth to prepare them for their future.

The Fadullos are also now using 31 ovens to help them with their production. Now, they create 432 bundles of paborita every day.

Walking with CARD has also led the Fadullos to cross paths with CARD-Business Development Service Foundation, Inc. (CARD-BDSFI) which helped them improve their facility and secure their accreditation with the Food and Drug Administration (FDA). Aside from this, the Fadullos were also introduced to Mga Likha Ni Inay (MLNI) which supports underprivileged communities through the promotion of their local products. With the Fadullo’s excellent performance and contribution to their community, the couple became an awardee in Pagkilala sa mga Likha ni Inay as the “Gawad Maunlad” in 2017, which won them P50,000 and a computer package.

Because of the relationship they have built, the Fadullos also supplied paborita to MLNI that continually promotes and sells their products to its market. Hijos Tours also integrated the Fadullos paborita to their travel boxes, proof that CARD has absorbed the paborita as one of its staple products.

Irene also appreciates the programs offered by CARD to its clients. “CARD has various programs that will help every individual grow. Aside from absorbing our products, they also provide trainings on financial management which helped us greatly,” Irene shared.

However, the pandemic became one more storm they had to overcome to succeed. The COVID-19 pandemic birthed not only health-related problems but also competitors who do not have permits but sell paborita at a cheaper price. Because of this, the Fadullo’s customers have set their sights on different paborita suppliers. To counter this problem, Irene set up their own Facebook page where customers may order paborita when not available in the market.

“As an entrepreneur, you need to know the kind of business you are dealing with,” Irene said. She continued, “More importantly, you should trust the product you are selling. You should not give up easily,” Irene concluded.