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CONTENTS

MESSAGE FROI',iTHECl-lAlR4
FOUNDAT ON FORA SUSTAINABLE SOCIETY5
HIGHLLGH OTFS
1 9 9 8A
E M E RN GGE C O - E N T E R P RI 7I S E
F / N A N C ARLE P O R3T5
 TI
T
I . . , e r rl r o . r ' r l " r l )1r 'ol e
oo
"
O J \ D \ I0 \ r O R
A SUSTA NABLE SOCFI( NC-
- As with ary irrstitlrlionthc fi|sllllre€yealsw;rs'rilical t waslhe
rnnclc
formatlo n Dhrscof the orgirllzaliof Cof5tr rt ndjuslneftshadto be
.fd f rc jdcntil/a ]d focLrs oilhe innllutlof lld i'r hr eslabished
o r l rlsocc:slon we highLight nolo I ! tle nctorLrplis rner)ts ol tll€ pnst
(- pcfonned
yeirrbLtl so present irf nssessment ot how1r€FoLrfdnl on
drr fg l1sflrst l rrec Yc.rs
Focus and Prudence amidst a volatile Environment
FSSIhnsw ln€ssedsuddellafd alrinrnlic shlflsln thc cxlcllrnle lv Tonnr€nt
i- pr€vnilinllln 1996 \\'cre vcryposlivc Thecoudryv\rns
I he coftlllions
slreddlnq off lts l;a!€ its the wcakest in thc rcgionofllqer tcofonll€sl ,
tn hiy Iqgl, trot'cver tlrc es.f fllincial'rlsls tlrucl\'By:L993 theElNino
$orse.Thccftectsof 1l)('tecriscgcol1lrrueT0 pl'!lue AslilI
fladc nr,rtters
ecororlllcg upto I r5dav
rt) Ll rcsDollsc to l lcsc rlilturnaYl rnafrnadecatastrophes the Foufd:ltion
a ntolc tocuscd nna pr!den1 ipproach ln progrnln develop eft a ld
adoDlcd
(. willla llgll probabiily of success nn'l
|iDlcneflallo1Ofly )rojccls
nriltlrrltrrrlof(Jcrfl bc lcUl lo t lc conlnl!rity wcTe suppollcd
ECO"EnterPriseFocus
;cnlchcdfur cntclprises that exempilr ollr sL']]rdafds of
Wc pro-icJlvc,/
nfd belcfil ccologica soull'llrcss iln(
nti\inurrl conlll] il! covcrn!o
caoronic!ial)lll\r.
B!'lh0 cr.lof'1998,$'c devcopcdour polttoio of ECo'Entcr$lscs fot each
of ll); ccosvsLas-lhc lDlnnd cropnf d' coasta' nld Llfb0n eccs\'slclrls wc
;rlsoirc rrclcd rlrcroflr.rrrcc institullols ll our llstas in EC0-Erilcrpfise wilh
mu1-ccoslstc LrlrlPicl.
llrcsccftcrpriscs wcreil clillarcfislrgesof devclop ncnl llle Foundrtiol
accofdirg to 1re uniq!e circ(]lnslafces ot
attcirflcriio liiol ut ils assisLince
cacl aflcrfriscinrl lts partfers In csscfce, wc do ncrlsimply provide
and
ilna,. 'q. b'r n,anyo.clrsio)s wc llaveli|[c' olr pnrtncrsto nallieJs
sourceioitcclrrrololjy,
lr 1998tor ilsriircc,lhe FoundrTlon fL lded IUBoKENElterprises $rhlcr
\!as prcdLrainll efosioncontroldcviccs sllah as Oeotefille nets ard tascines
fibcr,a rd growinqnedialTomcoconuipeatTlleassistance was
iionr cocorrLt
Drovklcd be.iuseirl .lgriclllufawrstew:s beirg trarsfonned into
1re ervlronrncnt (c'ological
m.rLetibleprocuctst i.l lrclpedrernbllltate
soun.lnes3), b)1le p ant!lcxrr.tedilelihood ifd hlgher incomes rcrover
(conmuni!'-.overagc rrd bcnefit) ind cl tre pfolect cotrld
300houselrolds
' . . l , o,o ,, .,,L,ir l
f'I or
Butaswc erp oredllle loctl afd intelnation'll maff'etwe discove€d a
hugeclcmardtlrit coud bc furlhcrdeveloped We also fea ized lhrtthrough
cor;stnntrrodLrct innovalloEwe h.( cfeatedn distinctconDetiiive
irdv"rf Lrgeii1the industry
Tllus\{,efonneda jolntventurecorporation withIIJB0KENEnterpses
known.rsCocoTc.hnologlcs Corporatio n.This'ompanyrrjli provide
sc ,ices,produciclevelopment andtechnoogydissenllfatlon lor
mafheting
cocorrut;oir cntefpilses Hopefuly,lhrough thlsLrndcfa[ing we cin exp'nd
our seruices ind imprct olr rfirgifallzed connunities in this crse'snall

jcationof mirlureEco_Enlerpris€s
I is our bclleflhirtthe dilirsionof rep
represcnts the urique contribLlion oft re Four'liliof in the ie d of
 Prud€nt Program Devetopmentand tmptementation
Elenas $re.ctl!el! promotecnterpriscs Thnthnr,€llfeatpolcrtia \tcnso
cofr f!e 1orespond to reqrestsior .r9si9;fcc.
| 1993,howevelI\'e inposect .r stricter .rpFicit of ot po icics I our
scr€enrf!l afd appr.tsatproc€9s. TIrisi9 ire.alscofir de.fcaseilr e.rrniflJsln
1997, a rclhicherprojecl rlshsd!e to Urccof|n!inqcrisis. Nord telcss. wc
nrnir(cd lo pro\'lded rcct.rssisl.fc.to nor€ thnf hiti oltoti proposnk
r... \,edorJcr lhe rr.t U)rec\,crrs
\ /c cortinuou!! cxertcdcllod5to J{ hlc\rcbili tcc ir oLrfJl|iiltnfae rl
lern5orlcoqriphi.ilspferd.fd cco-slstc n 5upFo j A thoU!hthcresrrms
ro lrc. pfe,]onintl se.loro irca.:rislc.lin i g \r.I !cir, thishnJLrccn
D.ri r..a ovcrlltr rfeclill]ttc||l tliilr i,ji riiln.. tu orxr :.cot!, or ;lrfirr
ihc [o!|diT]ors pnrT rc ! ,{.r. rot lpf c.l tlon thccrtscsl.ti(rirfcn5
rid to be mnrlelo ibo!l l:.r((o!rr r rc torIoi rr5trU.t|r /rq,.\cfdc.l
Dr\,n.|15,.1f.1 prclermi|rliorirrlr rit.! thcn./)obtcfr!\jro. r rlicpitc.t.
l r.l loi| o5spfo\islotr \\,cr.t1(.1 Lrl
i\s5cs5l]rclrls of.rl n(counTJ \!cr.cilso Icrio(i(n lt,Ltlr.l.rli \cr. firc
bcnclllcd l n f cnsc!, fiorrrihc (oIc.;por)(li r(J Is lJr !,rn( \a-c.|c( ! c.r y
ilppyrnll tneflt r o!r scf(:cnif( ol sintlilrproif.t,ifrl(l | ({)ninqupw )
f r o ' c . r c n f Vc co / n b i | f l i o0r s1 i r ; l r ( i | ( il l l h | | ) ( ! r l : i l l i : r i r i ) | j o r p l l ; l a 0 1 r
I S\9
Institutionat Sustainabitity
O\icr3 ,'cirs,r1'c(o rsstcr]lyposlri surpLtrcsil . u r I | n f . I b o l T o ti r) c l i o
llril I rc i frl hrs gro\,,,n frornabout454I ritiol pcl)i I s.ncnrbcrLq!5lo
r)rore thnn566|nillof pcsos tryt rc e|d ol I rlt! li.i r(t)r.,iant(
i l4 pctc.nt
ncrensc ovafThe3-!cir pcrlod.
Lilcvr'ise, we nrrfaocdlo rjlr ntai| n ci| bLttcirffb/aorllJ|irtion thit
f,cploperating coslswel bclo$,thc nllo!r,rb/{.inr/rj
Focus on DevetopmentEntrepreneurship
On thc \!hole,il rnaybc saidllrri lhc FoLrdatioI ilrt |rc c rtrrlj|ilc5 |
s!pports,lr .o tsti|1ly fnccd$rlthI re (hilc rqe oi rcsotvillJ Thc.clc opmcnt
di eDfta-howto achicvesocl.rl, ecololJaill,.r l(l ccouo|tc ljoil,:
simultineousy.
lJrr erpcriefceoverthc list ihrce',earsltnsshownus ihil Tlrefeis no
s rgle soution.R.rthet, it is a .o|slant searchfor i tfovativeippro.tches
adiptedto localcofditionr'Thisis u,hatour ECOLflerprjseloc s h.ts
rcvealed.Techfica, narketin!1, atd finan.nt.rssisLrf.e.re al nc.dedtf :tn
enlerpfise is lo succeed ll.tsocia,e.ologlcrl,a rd c.ollonlc lefflr.
Wth its essofsand erpertcncqFSSI can ro$ ge.r ltscilo be n teidtnq
resolrrce ifstiiutionif d€velopDerleftreprcn€uf3 Ip.

Ma.AuroraTolentino
Chair,
FSs
 E AiKGnO\r't{S
-ti ofthe Phiippines andSwitzerland
0n August11,1995the Covernrnents
signeda BilateralAgreenrent on the Reductiofofthe ErlernalDebt Through
thlsngreemenlPhiippinebilateraldebtto Switserlafd wascanceled$riththe
creationof a fund equival€nt to 50 percent
ofthe deblsfacevalue.Thevaue
ofthis tundln Philipplne pesoswrs PhP454822.597 in Septembcr 1995.
TheFoundation for a Sustrindble Inc (FSSll
Soclely, non'
ls a non-stoch
a) proit foundationorganized to nanageind admlnlslcr thisfund

(. THE FOUNDATION'SVISION
vislonl
Tre foliowfg arelhe keyielnlsin the Foundrtion's
a Sustainable t
errieprises rat are ecologically
comrnunily-oriented, sound,
,4 andecofomically vlabe will be and
suppoded plomoted
.-
a Proiectssho!ld providenrarimumbenefrtfor the maliTnurnnumbefof
bereficiaies,

T H E F O U N D A T I O N 'MSI S S I O N
ThcFounclitiofwns cslnb ishcd wilh the mhslon:-
a ToseNeas a rcsourcc institutionfor the economic empoltcrmcftof
(' crterprlslngflri and ufuan comm!nilies in lhe Phllippifes
o
'T"1 THE BOARDOF TRUSTEES
€ \rcree cclcclto lhc Foundation's
Thofo lo,,r'|rg Bonfd for 1998:

(-.
= PESP N1a.AuroraToeftino
ViceCraiI CONVTRCENCE RomeoRoyandoyan
lteasL|cr I.lEKS Barbnra Salazar
PHIII]HRRA Marlefc Ramirez
NAT(CO Tcresita
de Leof
NASSA Sr Rosanne ivli lllllf
WAND Rebecca TnRnda
Exofii o lvlembers S\\1SSEMBASSY PeterCasaLrta
DOF Aufori LuzV laviray
Corpor.ieSecIelary/
Legr CoLnscl
 -Fr'E GE{ilERAn-rl{SSEME f-r/
Th€Foundation is managedby and is accountnbleio ph tpptncNCOS andto
the broaderpubTiclhe PhilippineCovearment throughthe Depidrnentof
Finan.e,andthe SwissCoffederaUon rre r€prcsenledif the Ass€mbyand in
the Boardof Trustecs
l}e followinginslitutions
conrprise
the CeneralAsscrnbly lof 1998thfough

i . l l \ f l , ; r r ll ) \ i It, ft lt,L

,\isocitiof ol Found.rtions{AR \,1guc\4ilir-Rcir

I
CON\'fRCtNCE RonrcoRoyaldoyin
Dcpilrlnrcftof Finance(DOF) AurorirLuzVi lirvir.ry
k Llf cnicrrlDcvclol)rncnTCoopernlive (EDCSI
Socicty Sl vir(of Buht.io
Frccdorrfrofr DcbtCoalilio|(FDC) Nlir laYcsir
Diof,fo-P.rscun
6roer)[orr]|r(CF) Sitinucf-crrc
([]po rq Lr\asng Knblbrlhin(C:ll]J fvilyn l-lrsuir
Akt (llIl(S)
Slliss nrcrCh(rrclr i:lnrhiraSaizJr
l vnAs RcnoCcs
Nliiibisn l(ilaFounclntlo| Scf Sanlir)irnRrsLtl
Nnlofil (ou rc lfor so.lJ Dc!.bt)nctl(NCSD)
Nilloniltour.i ol CrrK rcsin trf P rll r)ircs(NCCP) [a c ir]ai(ir ao
NJlioul Cofledcrnliofof (oo rcfalivcs(NAttCOl
Nfi o rnl 5fcrelnriaiior SocintActioI {NASSAI !,r Ror r r. \1;rlilf SPC
NCOC.ltcr ior Coopcnlir'cDcvcoprlcnt(NatO-CCDI M . 1 rr T a f a hirr !
Pirlfcr!lripot Plrilipp1cSIppofiScft,.eA(]ctcics (pllLSSAI
P r ippre Elrsiress lor Socil Prcqress (PESI') jL1.r.
Aurorilol.|Tif o
lhilippf. PirlrrcEhlp fofthc Dc\,co I t)cril fulirl.ir.Rifriraz
ol ll!nr.n Reso!rccs I Rufi AJc.s(PhllDllRRA)
$bme r\ AcrioI Nci\lorf.foJllc!. op rc rl l\,\//\NDl
S\'\SSCONTACT
5\\,i.r Enrb.5s! PctfrCr5iultir

F ] E F O ( . ' N D A T t O h !S T A F F
T h e f cr ' e i c f o p . s o | | c l r o ! . | r c | l l r l L ri i q t h c ! , . r 1 T h ci b l o $ , i r r\j , c l r
thc Fourdnliof offlcersnnd stiiT ior th€ lcar t9!rr:

[!!]enio ilt Corzaics

Enrico 0. Crrde
SenialPtaE;n Afli.ef Ri.Jrdo [. Toncs.r
S! vii R.chclRey€s S6.on
iinar6e and AdtninlstreliveOti.el Ef fdir Torfcs-Velirga
Adtitn ishatirc Asslst,J
nt AveliniP Lagnnt,
Ajdr N,LBatifgan
ZenonC.G rgerra
Uti/i4,person/M essengeI los€0. LasliDoso'
 communitv Reach ol Eco'Eni€rprisss

il::;:Hlfl::$l:I"l'ft
::*li::;mx;t.:,ru -'
:1"J,::;" or
il;;;;';;;"; orthet,itreborrowe*
'"lrectjo;servicet
ben€fil because ale
the'y
i l.rluo"l" p.p* sn.ondcommunities
","n
lheyarethe
fo'
goodsor scrvlces ctample
i.ar."i. oflhe
enrplovees
"ijrppLr" "rahepro;udionl€chfoloslc5or
ia*i""
"i""tt:i"**a

REACHAND FSSIINVESTMEIITS
ECO-ENTERPRISE

2 7
1 L 1
2 2 3
7 (n
8 52
5 3 14
I :)
00 000 i138
4/l(r .ll
\ u r r r h eof l I o r s c l l od s 41 5l
1il

2 fi'l 1 1 . 4[ 4 .10.3
1 1 rl v l .iM 2._lN4
l s s l N V f -M
s lNl5

J \ l \ ' c o L rd ] l 0 r n - €
a' r c o I I r ' r , L ( O - i r ' ' r p 5 c s5 " p l o _ c c l
i l t _r o r l l n r '
, ir'h, i-cs rln l' 1'Iirlpr'ill" il oe
,'or
" '- 11ol\"d ''
a i, ,i' ,i l';;;'';' ' ;' ror'| | Ln;rr o orq 'i-irr'o
ibout 14. loia
ftomthe cnterplises
benefrting
O inl.iiro,uonofa.
"n.l "rnployecs
nc 518t.

!rygELn er!13!1!-Dellygyigg!
ECo'Enterprrses
Total and Per Capila Investtnents in by FSSI
relers io arnountsapproved
f"ol-nn""ono ,ori.",." lf thlscoftc\l
- ure prolc.L
for stoodat 303
r',ql,riu;"4 tot.r 'rpplovrs fol the enterprises
"figgs
ofabout5'800
to af inrrestnrent
I O,, pJi."pit" f,,tit, thisTrafsates
"
r$os percapIa.

DeliverY cost -'"

i;;;;;: '"' , I e r ' r l '' ^ c ' D : P r r' '- o r ' o n ' n . r . n
l': .; '," r ' ' ' ' o ' r o - l r r ' r p r ' s o ' l \ \ e h r D or ' l
M'euseoperati rg
l ," fr o. othcr ilcliveproicctsMor€ovel'
"*n.i"' "f po b L r ' l r d '
"r.ra"
.p';;,, rr'Lr I r'r'ru'Irr'r"ri
'Dro or olo' r ' r , l D " o l r ' o L- lr e l
o t'lO g o ' t ' o . r ' r - r
a" .r i a c r ' : l r ' D o do " " l o ' l d r r o ' r o L
ooclatinqexperc! Ieiched 7 9 nillion pesos
theeslmaled
tome5 189households'/emplovees
a ii""" "r
"lJari""ir,
,:lcllvcry
cost perbelefcjaryis abolt 1'522pesol
 PROGRAM PERFORMANCE

PROGRAM APPROVALS

Proposals Received
Pefh.rpsas a sigf ofthe tines,theye.r 1998sawn drarnatic rlse
or fequensfor finrnciil nssisli]nce.
a AfterJf inltinldeclifein lhe fLrnberof propos.lsif 1997rcquesls
perkedonccirgirif ir t998ulth . toLrloi E9proposnls.
a t is i €festif! to rotethitl mostof1re pro)osis werercqrestsior
gra s.Theinitinlbudg€totthe snnl !rflrt tnclll' $/rs cxrrustcdby
themlddc oftheycafsolhat.r suppcfielrh budlethndto be

Program Approva13
f-SShid bccr ablclo rcspofd10n iliorlyoftllcrcqLcstslthrdrc(cilcd
a Ovcrtl)cr lcart 1rc Foundiluof rls rccclcd sonc ll4 proposirlsi rrj
rc,rlucsis.0i 11s nunbar,I l 2 h.r!c brol l)r'drlcc(isslslJrac.
it llrlsi]llt cs ;r rcspofsc
r'itcof nl)ort 5: l)o(]c]1.

Aggregate Program Reach

Program lrlvestments by Eco'System

SUN1N1A1I\
OFPII0POSA
S ANDAJJPRO\) PR0{;RA\1NVLSTT1LNIS

1 rI
, r 1 r! 1 1 ) , . i s: i i ,
!(,1 u' I L4
f1i NN. l(orrii '\f,r.!r( !\ ,lt l
,l] l lir r A|r,.tr,, f'rrl' l l l , , 1 r l r lri rl L r . i l 1 i , ' . 4 i!t i

FSSis $'of\lf q To$'nfds lre (cle o r ncrl ol i |,f l,"f . ri.f p li.r ipplorrlrt.
for 1r.' dllfcrcrtccosJistenrs.hl 1q9anrul ai:r:\':rr'nrilir.riirnrlnrrll\rrrlarojo
snril'5.ie eriefpls€firnf.iral)| oi..l! !!i'r,'.lrrni r.Lrtlr l!!; ufbnrnrcr
projccls(primi ly olrrcostlroLr.f!l licre I rc ii,tltf,rtrc. IiicrT.. r 1!93
rur.r-orieftedprojccts covcrirg .rcp n rl! | l),r xl5 : d | \,er 1!i.Nr:
becinreIrc pfimaDi beref.arc: of F55isiil;r|r((]. T xr rnior]rr.l(l
.rsslsied lhi!lerr is teilur.dnsther:rs.iLrl\' ol rr.j Airru:r R.n, I

PRO6RA\1
]NVESTI,1ENTS
BYECOS\5TE\1

1996 t 1)l,r
\ L r n b . ro f A . . GA p p r ! v . d ll l!

I1L]LIIE"S)'STEI4 :l,t:r:,.lir1rN1r
01 I l,l!8,132 - 1 r 1! llt.6|1r,0tt01r:18 4 7 1 1 0 , 1 8 1 . :l i:)
I]R8ANARFAs ri 1ri,rJ0l,lf)0ll , 1 5 . 1 7 . r , 1 7 0. i1l r 0
.ROPLANIJS 81r4,10000 t . r 0 ! t , E ltr2l i l 0 l l 0 l 3 l 1 7 , l l 1 r l r ir 4
(,ROP/tPLA\D/RVLRS 08548,00000 la4Slllllr .l
.OASTALI N]LAR\F 118,850002 0 2 , 8 7 4 , 4 3 6 54( l 02,-1),1)rl0lt l l!,r:i,2li5-r l
OREITI I]I'LANt]S i ENlt00000 4 0 2 ; 1 : , t ) t t t i i l 411:ilirlir| ,l
Toti AnoU,l Appole(l ,14,6t1,110t0 1 0 00 , 1 , 5 7 5 1 : 1 8101) 3 1 110,25800000tt0 I 1 ! 4 i , i , 1 r f3 ( r l L r i l
 Geographical Spread of Proglam Inv.stnents
Anotherconslderation in assesslng FSSIS perfomance is in lerrns0llne
geographlca of ts assistance.
distribution
Whatis rnostnobb e is thal fof the pasllhre€yearsthe al ocntionfor
MetroI\4anilaorthe NalionalCapital RegioniNCR)hasbccf 1r€ smalest
Thisreflectsthe cofscious€ffortto bringthc resources lo lllc counlryside
I\4oreover,exceptfor prcjectsclrssifiedlf thc NCR.rndnnuonwld€
categofles,moslofthe ploiectsapproved ale locntedin low_lnconle
m(]fiapa itica

PROCRAM
INVESTN4EN|IS
BYCEOCRAPHICAL ON
DISTRIBLTfl

lria lt).)l 1998 I(IIA

10 :19

NA ONW DT 25,05000000 56 0,298182.:10 t0 4,000,0110.002o 27

35,348,182.10
LUI0N r 0 , 0 1 5 9 5 022
0 0 32842000.00 5t 9,548,000.00 til 40
52,405,950.00
A'INIANAO 5,311001).1)l) 12 11,715,556i0 18 2,600,000.t0 t3 15
19,ri34,556.50
V SAYAS 1,562,:J00.00 I 7 11(),i||.{l(r11 2,:100,000.00
1l 9
r r,181,800.00
NCR 2,683,970t0 6 64|(),rli)l.|rl10 180000000 r0,883,970.008
lor Aro' 'llApprovfll 44631,220.00 I 0(,()4.57i.111r.8(,
I rr1)1J,248,00000
100 r00
r21,45,1,45880

Program Adjustments
Thcrcwercthreetypesof,'rdi!stments ln coping
ltilizedbythe Foundation
willr lhc f.!alve offects
ofihe exlernal envilonment inc
These ude
restruclLrr afcl prc-terminat
fq, c\krldcd paynlents, on.

Rest.ucturing & Extended Pavments

Rcstruc[]ringoflorrs is unde'inkcntoprovidereliefftomoan Tcpryments
ducto.ircr rstances beyofdthe contlolofthe pilrtncr.Effedlvey,
restructuringe(cfds tlle proiect ihereby
life, nrinimizirgrnonthynrnorUzaiion
payrnenls.
Exlended payment5 on ihe otherha14 occur\!nef panners
requesifor 1re poslporerncnt of a speclfcamollization
a Duringtre yeaf,therewerea totaloi9 accounts that weleclassified
as
accounts thatwelefestructured or werc$rltherlended paynentqlhe
iotaloutstandirgbaanceoftheseaccounts as ofJanuiry1998
arnounted to some12.8mlllion pesos
a N4ost oftheseaccountsbecamecurrcnlafierthe approval ofthe
festructlrringoI erlendedpaymenls.

llru' lf adclltiofto the appraisas of newproposa copingwith

s leceived,
the problems encounteled by existlngpartners during
keptthe siaffoccupied
the yeaL
SUM]\,]ARY
OFPROJECT
ADJUSTMENfl5

AD]UYMEM

rq
Re-StrLctLr 6 6,590,677.00
3 0,280,357.00
Subtotal r2,871,03400
3

Pre"T€rmlnallon
0n theotherhandpre{ermination to in aasetheprojedosesl1s
is rcsorhd
viabili0or serious
vlolatlons
ofthecon actwiththe Foundatiofareincurred.
a Todatqthreeaccounts havebeenterminated aheadofitssched!e

ProqramFlnancinq

FSSIFlnahcingby Faclllty
There
aretwomajorfacilities
thattheFoundatiotr
utillzesirrresponding 1othe
manyrequestsTlresearetheSntallClantFaciiit,andtheProgfam
Invednlent (whicirhnssub-componefts
Facility under10.
a lhe SmallCrantFaciliVhasbeenthc prlmary mechanism bywhlchthe
Foundationhasbeenabe to fespo|dto i greater number ofpfoposals.
0flhetotalnumber 65percent
approved, wasviilthesmallgrant
prcjeds
a Conversely, thrcughptogTilu
supported investmenl5 account
foront 35percent olthetotalfumberHowcvet iu tcll]tsof value,
it
98percent
represeols ofthetolal.

PRO6MMINVESTMEMS
BYFACILN/

191( 1t()1 1998

PRIJC]RAM INVESTN1ENTS
Nurbar of ttograir Accou|is t7 1(r 639
ApprovedftogramAssshnco 44,631,220.00 64,575,218.80 20,248,000.00 12!,454,458.80
5MALLCMNTSFACLLIry
Nrmbcrof CrantsApproved 1 ll l5 73
ApprcvedCraniAssistance 214,000.00 1,406,000.00 1,485,000.00 3,105,000.00

Iotn No.oiAccornh Approved 24 4l r12

TotaAmorft Approvedn PhP 44,845,220.rA 65,981,218.80 21,733,000.00 132,559,458.80
 FSSI Financing bY Instrument
FSSIusessevcrafin;nclfll ilslrurncnts to 5uppodits pirlncrs Overurnc
-
ho!,cver,sonrefinellrfirig rad b€.rnund€fiaken
lor issislanceln
|' h iggo.tl gr.";ee rt'as1lc prlmaryinslmnr€nt
" t
.o',tiurt,to"'i tlrcclonlifantiarrm of aststance 1n1997
"."'n"
,t gy fgSd,a great"tl,at" rcl wasncllje\rcd bclween various Instruments
nvallable'loan9 deposlislnd cqui-i!'
a Thisbalafc€ rlrofecrciti\'l\'in respofdingto clientneeosano
reflecls
capabiities irswell is b€ttelnafagcmentof rlsli"

BYINS]PUMEM
LN\ESTMENTS
PROCMA4

19')6 1998
1l ll 6

r4.143,5700ir a 2 51,351411.10 u,748,000.00 4.i

LOAN
1200000.00 7,000,000.00 1 l 7,300,00000 30
SI' DI,POSTS
2 I J750000{l 4000000.00 2!
LOI]LTY
(]RAN r;5llll{)
1,487 tl 2S48 827.n) 4 200,00000 I
$
(tLtARANll:FS

4 4L ' . i ll l l l ( ) l ) 100 lt4!75,23t1.80 1 0 0 20,248,000.00100

ota AmouirtAn! ovf(l

I N S T I T U T I O N A LP E R F O R M A N C E

Growlh of the Fund

Finarciir liirblll\r s one ofthe.ritical considerations in FSSI!appl isal and
c!'alunlon oi projecls.This sanle criteion is belng applied by the Foundation
the Foundalion aims 10 pres€ve the leal
rr [s o!\'r operalions.Concrctely,
-b
Essenua ly,addilions10r h l 5 .. d f u n d" 0 1 . l o r l a l I L , t l l ' p ' ' n l r q
pfcseNeits rea value,the rate of rclurn must be higher lhan the inllation

a TheFoundntion had posiUve eamingsin allthe yearsofits existence

lhut fion the 454.82nllliof turnedoverin September 1991theiuncl
hadgrownby aboui24 %to 563.46millon at the endof1998'
a On . yeartcyenrbasis, the Foundafonhasbeenableto beailniation
ir 1995and 199811on groundin the othertwoyeaE
a lle lo\/er-lhan Inflnlionraiesof retumwerealsodue1othe provs on
for tlre declineln markelvaLue (MVlofequityinvestrnents Theseale
not acluallosscs, but lt ls setup 1ocoverfol potential
losses
 (innrilliofpesosl
srArusOFIHEFUND

ft)TA 5
t lt i,/ lt ,,! 4lr4 12.13l
ll il
t.r'tl 2l!) tl rl t-rll I t 1l ( l
45482 114.:,1 5lll1)l 454.82
5lili.1l

4 299!l 5.i.t't1, ! ltl'l 2 4 4 1%

2.42%"' E,l '1,

'l nri3io, kt th.hn h Mrt|et Llu. al.A

L ntr.lltrrt t:
"nhd qalnD.. dcll4 t M.:hlct!' lbntih"tion\
""trlinlalekt th. quntt t A.lualinttuhant t/r.l.tt rts.tt40tt/r,n

Cosl Eall6ctlv€ Op€r.tionr

Anotherparameterimposedon the Fourdntlons tltat ll sho!kl r]nlfta|l
cost-efective
opera{onsThisimpliesthntopcr.rifg cosboftlrc fSS dcfncd
lessgranlsnnd plovisions
astotalexpenses lbr losscss rorki bc [cpi to .1
mtnrmum.
Specincally,
it is mandatcd
thatopcrilinqcostsshouldnotexcccd 15
oftotallncome
Percent earned.
Thetabiebelowsho\.i's
howthel-o!fd.rlio|perfonncd
lis-iivisll]is
manoalc:

CALCULATINC
FSSICOST
EFFECTIVENESS'

19'r7 11\8
t\ t82 47li 4 { rl t 0 1 , 6 1 6 55,828,8.r3
tll.r Expenses(OEJ" 5,3621145 7r 1 5 1 8 0 7.903.101
ProjecLCrafls 1,940.800 4,4l8,1tJl 2174143
1,035,i86 I 0 1 !9 / t
Toia txpcrses(TE) 7,101,645 12,009.ii73 12,293 423
31,778,831 21,.)r1,943 4 1 5 145i 0

Oper[xp lo RevRA]10
A low,rbleUplef tlmit 2 5 . 0% 25.00r1i 25.0.)1,
F5SlRdlio 1 1 70 t l 1 60 k I4.t'tr
'CostEl/eclyeness-a)u.tattu Etpenset/fabl
R.r.trts
"OpeElnE kpeh.fts = fobl dpenes les.tlIoid gt.nt5 lodn las, ptuvitiors

a lhroughoLtlhe 3-yearoperations,FSSIhas[ept operitingexpenses

wellbelowtheallowableupperlimitof25 %
a Thehighestlatjooccurred in 1997.Thiswasthe periodwhenthe
financialcrisisbegansothat retunrson investnent
weresignificanty
lower.
 I999 THRUST:
rco-eiiiinpirsr aND DELIvERY
DEvELoPMENT
'Financing' vs. rEntolprlse Development'
rssi it-."*l',qiui i. e wilhln lhe rteletopnerr tonnu$N Es:e${a(y
"r.i mnyt'ke Thereis the
it,"r" ut" f,to-ai*ina to thatthe Foundauon
". devclopment filnctlon
inafclnq functionirnclan elllerprlse
Fina;cina'bislcalv meansthe provislon ofcredil guafanteetor cqllq/ro
to provicle finalrcliL setuices lo its c ienteLelb assess lhe
cnabt"lr orJponent
peformance data ofthc proponent
oio'i"nnnin'i,itn" p.l"o itscI finrnclnL
is ncededlll)foirunately only
anrl:qgreqrte,islt.trtaol thc end_bofro$rers
thc fonnefcan bc obtalnecl ln n)ost ifsurnces'
0;nr; ;ther hafcl,'Enterprisc Devcoprnen{ req!iresspecilicilfolnlauof
anclexDcrlelcc on fl'letcchnology nnd mnrkct of a glvenentelpriseofe
clldcavo[ Expcf ad\rice js always
cannolbc a iackof;ll tridcs ill this
reeded. Aclualcxpcrielccls thc bcstnsset
FSSI: Focuslng on ECO_Enterprise
Developmentand DeliverY
rr sc:rrinar'le.lc.clopfrcr- I cri | :)pll-er't-\:lLl10stofll'c
Fol
' ' " _ ; ; ' " i t " " o r o r _ i o c l l ' e rI r s t r I o , . s i r c l f c f i l i f c r ' 9 T o d c
li\id Bn$( i\1d\hc.Pcoplds (ledit!\nd Flnnncc Corpofation 0re
i-)]sii\n(:t
taifl!' !lcatedtowids nlovlfglLlfals1ootllelllllcnncdlatlcs who in lunl
!fdcrtil\crctnI lc ldllg
L l . _ f c i , lr rl d ' o r 'f i s' c ' r r' l : l ' r r
AI crc(ot.i-'( rl. r-i o'tl. ' s c L r ' \ c l o p ' Jr cf u l ( l i o l i ] >
o,t llofcr-rr'i.rorl'foa- J lc []_c
its sllirlcgl.:ro c. fhercrrc vcryfcw ifslltrluofsthal playlhis much-fccded

Llrd.r thlslr.mc\\'o\ pro\rldirg lurrdsls bul a pafiofthc o!'eraI oulputof

to cnqallein or b' n pariofan cnteQrise
i7c(lqfoup
clal) if(l . ft.rl(lllla
hc tii nr l rolcol llrc fou ldiliof ls 1lrfocuson a icw shaiegic
crrtcrpr5c! oi provcf{ rot iu5tpotcliil] sLrccess afcl repicatethcsew lef
q' rhingald nedlirtirgdenlsbet\lecnexpelicncecl expefisand
ipproprllTc,
propofcrrIl.
ilri5i!,,!hrlFSShorestoichievcthrolr!h itsporllblio
of ECO-Enterpflses
for 1999.
EMERGINGECO-ENTERPRISE
 T H E C O C O N U TI N D U S T R Y

Coconut viz. Oihet commercial Clops

lhe coconuti$dustryi3 1he\11o:tir$po\tanlsegmeit afllol\g ihe (o(nr\lcrcii(
cropsln the couftrytodny.
t is ranhedfirstin lhreecalegoriesr
a li ls Number1 in termsof areaplanledfc lowedby sugrrcnfenfd ibaca;
a Thecoconutsectoris Number1 ln lermsoftota production {if rn€tric
torsl,agaif followcdby sugaland nbaca;
a lt ls NumberI in termsofvalueof produciio 1,fo lowedby suqircnrq
rubbeiandtobacco
Theexhibitbelowprovides thc rinklng ofthe connlercialcfopsectolin the
Phiippinca

tXHBll1.Ranking
of Commercia (Annual
Cfops 1978-1992)
Avenges,

90
80
70
60
50
P 40
30
20
10
0
-obacco
Coconur Sugar Abaca Rubber

t.ut..otU^i.Dat|t:t .riotliy lntllsttt' Anahtit PaARRAUSA\Dtn.tl il trtaRft ltqSl)

Total Nrl Production

funbel of nutsh.ruested
| 1994and 1995,the esunrated all overthe country
was morethnf 1l bllllonpieces.
Totalprodudionrcachedsome11.2bii ion
piecesin 1994and11.7billionpiecesin 1995.
Amongthe threeislandgroupings, is the lalgestprcducer
l\4indanao of
coconuts.Exhiblt2 provides
moreinforrnation
regardinq tota nut produdlon.

FXH
BT2.NutHarvesl
19941995

1.,rq4 % 1!95
Luof 2,ti,l1 14 2,4t4 2A
Vsiyirs 1.381 I2 1,38i 12
lvllnldnro 7184 64 I,trr 68
TOIAL 11207 100 |,701 100

fuut.eltut.at al Asri.uttrt.t sttisti. t (ajt.d ,) P/I5CP.S1998)

 Current Product Flow
N4oslofthc coconutsharvested are usedto producecopra.In this processthe
meatis s€paratedliom tle huskafd shel, andthen dried.Copra,in turn,is
the prlmaryingredlenlfor cookingoil,dessicat€d
coconutand othcfproducts.
y
0n the otherhand,the huskis usur usedas fuelfor lhe household or
copradner

EXFllE
I .i CufientProdudFLow

::il:,3J:"
?"i:,.d:: """,,
Fu€l(household)
C oc o F u eI ( c o pr a d f i s 0

Direction ol Trade ol Coconut Products

Conpired10olhercountrles, the Phllippncsls onc oilhc nfgeslif nol ihe
largestproducer of coconLrls producis
in the u,ord. Ho\N'e\€r, derivcdftomthe
r)utsarc prirnarily
gearedfor cxporis.
As e whoe,localutillzation is onllr:0 pcrccrtlf 1995,afd some28
pcfceftir 1997.Conversely,exportsreprescni 60 pcrcentin 1995and 78
pcrcentn 1997.

ExllBT4.Direction
ot CocofutTrade,
19951991

90

7A
E 60
50
40
30
2A
10
0

sortc..fD.ti. Dat ao.anot lndustryKitSetiei tiltt6 (attedh P4SLR|Sltt'l

 T H E C O C O N U TI N D U S T R Y

Goconut viz. Other Commerctal GYops

Thecoconutindustryis t re mostimpo .r segmeftnnollg lllc corlrrlr.r.il
cropsin ihe coultryto.lnlL
ll is rafkedllrstlf threec.rteqorles:
a I is NumberL ln termsof Jrenp aftcd tolowedby sugircane.nc rbac<r;
a lhe coconutsectoris Number1 ir termsoftotal produdlonlin IncJic
Tons),againfo lowedby slrgrrnfd nbaca;
a lt is N\NLtr.( 1 N ie-l(\s of \ri(rLeof lrodrLlion.foltowed b\t suqarcnnc.
TUooe[ nlC IODaCCO
Thcexhibitbelowpfovldes
lhe rifking ofthe commerclacrcpseclorlf the
Phlippines.

EXltBI 1 Ranking
of Comm€rcial (Annual
Crops Averages,
1978-1992)

90

70

940
-20

10
0
Coconut Sugar Abaca Tobacco Rubber Others
stiun..l tain Ddte(itnni.dity lntJnt!A,aytit, PaIRRA UsaAlD
t.ibt/ nt PAJCRLS
lttEl)

Total Nul Production

ln 1994nrd 1995,the estirnaled
nrnrberof nutshervested al overthe counlry
was morethan ll bilion pieces.Ioiaproduction
reachedsonle11.2billion
piecesln 1994and11.7billionpleces in 1995.
Amongthe lhreeisl.ndgrouplngs, Mindanaois the lafgestproducer of
coconuts.Exhibil2providesnroreinfomationregarding totalfLt produciion.

FXH
BT2 NutHatuesl
1994-1995

r!(r4 96 19!5 t"

Luon 2611 24 ?444 20
Vis.las 1,1E1 12 1385 12
f/ndrfio 7,184 64 i,'lll 68
lo At 11,201 11111 11,701 100

\oL1..ttte.u afAlti.ulin./ Stdtisti.:tait.tl ir PASCRTS

1t98)
 As maybe expected, expofisare primarily in the formsofcoconuloil copra
mealand dessicaled coconulgln thai ordel
0n the olherhand,localconslrmptior is nrainlyin the formof
mnnufucturedor refifedoil andcoconutoilfol oeechemicas.

Share ih Philippine Exports

lolnl valueofthe coconutexportshasbeenincreasing overUme lt glewftom
561miliondolarsin 1937to 643mi llondolarsin 1992andthen730
mllllondoInrsin 1996.
the shafeofthe coconutsedorin totalexpoits
|]r rc nllvctcms, holn'ever,
1is beer decllning. lo 3.6pelcentin
From9.8percentin 1987,it d€clined
1996.

IXHBlI5 Shillclf Phillppife

Expods, 1992,1996
1937,
(if N4llloi US$FoB)

12
't0

8
q)
e
0) 6
CL

\,.11.. .t lillt Lotrnn ttulLttry Att S.t)ct.t lttb(r'itttl it PASaR|Sl')981

 THE COCONUTCOIR/COCONUT
PEAT SUB-SEC.OR

Emerging Ploducts from Coconut Husk processing

'The
previous
sectiorshadshownthat nt prcsentr nrgc proportion ofth€
hushscons|tutesuDwanted wasteforlhe furnrs.Only.rbolrt40./ooihusks: e
60%are m:ifty buflred.At worst,oirly0.6./oof
usedJortuel,the rernaining
husks:re us€dfor coirand dltstproductiof,
Fo(unately,
th€reareernergingproducts fron thc cocofLtthuskThese

nl FiberPadsfor Upholstery
bJCe+Te\lileNels/Fascifes
cJCoconr.tt
Peat
Thereis greatpotentlal
ln developing
flre newproducllinesin lhe rasccnl
cohindlstry

The Inlernationat Market

It is worthfoting thrt the 'm. irstreamfia \cllalrcadyusothe prccllclsfrom
cocor'rut husk.Theiutenlational ntarketis rcativelydcveloped.
Datafionrlhe intenretshor,ls that marhctslzcsfor vnriousproduclsrit.tOe
fionruS$400Millioh/year mart\etfor coir(rubbcrize(l)
and USX; 90 ^4i|ion/
yearn]arhelfor coconutpeit
At the momenlslx!, perccntofthe intcnlatiofalsuppV conresfromSri
Lafka.ThuSthereis muchroon for fiafl\etpenetra|of,pnticulnrlyif
counlries wterethe Philippiues woulclhavean .t.ivalrtnlle
ir)tcnnsof
dlstance or transportatio
n cost

EXntottb
P r o c e s s& P r o d u c tF l o w :C o i r I n d u s t r y

<-:--7t
aatina) llaz:Iz$fl+
L uactriie l-> "tflff l
--------
Frb., P.d tb.d nrfu.rr.
luhhoIhrd p,d|' fr!!l bond'l

:.-nbering
(30%)

( o r . r d . r o r . o n k o r r, o . d r ,

F o f e s tN u . s e r i e sH, o i c u l t u r e ,
A g r i c u l t u r eG, o aC
i o!rses
 The Export Performance
lr |caitythc Phiippifcs erponrg produ.l!lrLrI rocDnuT
h.rsr r.adystarted
husfiAs n fonlrJdlioral€xpori, r Irrrl\.1lol
denrindln the lnlcrir.rl.rr
cocofutfiber.fd that of.oconutdustappeaE10bc gr,r\1r!

l:X llJI 7.[xporlsol CoconutHushBased

l1oduc15
lo!.1-l!r.ii
(Vollnrelf N4T,V. uc in FOBus$)

Fiberltust Aports
70,tro
60 000
50 000
l 40,000
o 30,000
20,000
10000
0

1,2qm
1,@m
@m
o @m
4Qm
2qm
0

slne.tB.siData |bttnt l,tl6t! A:i!tdi.r tqrb t itetlk fAtaREtI48)

The Local Market

Paradoxica ly,it is ihe loc:rlnlarketthai is reativelyunderdeveoped. \ryhie
this fiay ifiliallybe seena3a tlegaUve condition,il iE if fa4 rn opporlurily
to cleatea argeinpad on the localbusifesse!andcommunities.
PoLefiial usersinciude:RealEslrt€Firms, ColfCoursesPowerFirms,
Horticultulisis, Agricuturists/ftrmels,RoadContractorg Walershed
Rehabiitation projects, and\ /astewatertltralion/trealmert systems
 MAJOR COCONUTPRODUCINGREGIONS

Wherearethe rnaiorcocofutproducfg :rens?Basedof he.|rrageand

numberoiftuitb€rrlngtrees,N4ind.rnao
is The€adctfollowedb! Luzonand
Visaynt

FXHIBI
8A CocofLtlProductiofby lslnndCro!ptfg

rREES('1995)
FRUTT,BEARtNG

i.atr lt!.41 at A4titLtluil.tt,t[\1i.\tLit..tjit 1)1\tUE lr,, )

I pa jcular,Centralind Southcfltj\4indafnoarclltc nrirjorcoconut

procucingfegions,lollo[rcdby Soulhctfl]ga og ird Bico.

FXfBTliR MajorCoco|utProducing
Rcgions

11195

RE(O\ His lB '

5 alJlo! a)t 5t
312 2t :i7t 2)
22 1 223
5/l- Minda I t01 I {J0 1,018 100
.16.1 :13 401 l:l
N [4i]rdJ 2t: t5 212 14
IOTAL
'tll| Frlil Eeatinglittt
:;rn. Rua.u afAEti.Lhxal st2tisti.t (t it d h pAsa(i:' tqai
 PLANTS
LOCATIONSOF DECORTICATING
process l]bcrs'lnd the
whefeby.ihe duti nrc
Hlrs[sinjtiallypassthrougha

; '"t^"?;
,i;;'1;fu;i; :":":
;:l' ;':;:';:'"1"jil: llpodJrl
r i n ' " . c . r , e L b _o l r p o r ' c 1n l od r F e r
n_. ,'pioies.inq on€
fi,ciffti"s.:,nbe set up if various ways lhe mostcomplerc
c'-rf;;.ilXg::
rc, ornrnc,''c^
**,.,,.,." or,0,.
j" l; l':; i]:
:; ; "'i'"'i*'o'nt:qq"'
:;::1t1-i'j" ff : il"]"J"'.i'";.1'"'
"
l)'';f-''""". llc
Darrs locircd A((orLli'roiooa'Iol
rc dc(or:cir'ife
qs,oarrio'-ro+ o-t5cdccorlic'r'ngprntsihil l"l\c
,"-lo.: ,"r.'l have
a nLlrnber
ln Luzonufforiurately'
rnaifly
il"",i*
"o*,1""]"*
t'oiil[on*,fo,o*,
ofdecodlcathg
tnoontribuiion thathaverema]ned
Plants
operalofaL,

XI IJ () D(corlicilirqPl.lrtSiica

LI]ZON
Lii(ltria 9
9

(ilY 26
ALl)av/Le!isPi
VISAYAS
I
lloho 1
MINDANAO
3
Di!io Oricnlal l
Dav.odel No(c 1
1 6
Mlsaris 0r efla
t4

,':'',:,";:;1",j l"i;,,i"il"ilil
'rr'd' -rein M')o'rrJo
:li3::;':l'
il:".I";"il::
lheoDer"''ord'
'l,''i
-- .'t' '' 'i n."-'n';r
n r o ' nr 1 Lr e \ " J l r n a L
J, ,,' '.'".,o',.r,'"'n0,"'"to" \q
t., ' noloera 'd rrll 'l |rnLa e ir l Lzor'
i", i. ","." ' ("r oenrrde\ "b e il
:"'
"'* '. I plrn|s
n ". i t," o: i oppol'r;rr
rro lnMllddnao
rndutldnd
*',"un-.." n'p*:o,,' t nonol i '
$'ouLdbe substantial
 TTIE ENTREPRENEUR

Theinslrumental fgure in the stairup oforganlzations is the enlrepreneur.

lhey arelhe uniquebreedsof jndividuals who possess the urcannyabilityto
idenUlioppoftunities andthe leadershlp qualtiesto inspireindividuals lo
realizethe potentials ofthe undedaklng.
Theeftrepreneur in thls projeclis Dr.lustinoArboleda. Essentialy,DL
Arboleda, or 'Bo as he is popularly known,spenta greaterpadof his
professional lifein the academic communiV, becomirgth€ Dennolthe Bicol
Universily Colegeoi Agricuiure for sevefayeart
Hewas bornif Cuifobntan, A bnyof April14,1950.He is maffied, and
lrasa grandchild throughhisorry son.
Forhistuma educatiof.Dr Arboledagrddual€d fiomTokyoUnlversi\r
with BSAgriculluraEnglreering. He oblaifedhis Mnstc|sDeorecin
AgriculturaEngineeng alsoftomTo\yoUniverslly. l'leinishedllis docloral
legreein Bico Universl\r.
n temlsof his professionnl expefiencc,DrArboleda iiughl al Bicol
Univerillystarling1981.He rosefiomthe rnnkslo becomeDeanoflhc Blcol
llnivefsilyColegeofA!rlculturc(8UCA)fiorn1987-94. Duringlhls 1lmc.he
headcdseveraprojects sLrppolred by localirrd intennuonal.gencict
According to hlrn,hc lransforrned hinrsclfifto rrneftTeprereur io prove
thattechnologies developed lf the lJrivc|silycrn be vinbe busrlossv€nturcs
andarethereforcbanl\nbe,Thus,he frledi lealeof absencc to orgafizea
pilotcoconutfrberfactory
 MILESTONESOF TTIE ENTERPRISE

fu wlth manyofthe relativeiysuccessfuienterprises,

sever. .halefges had
to be overcome beforeDr Arboleda wasableto discovcrhiswiffifg slEtegy
ILIBoKEN Enterpfiseswas notsparedtiornthis development process.
Thestartup yearin 1994wasquitea difficultperiod.Onthe denrnd side,
the marketwasoligopsonlsUc, the product
Le therewereveryfuw blryers;
beingpurchnsed was limitedto baed llber
Overtlmq howevelDr Arboleda wasableto deveop new productl]nes
with higherva uc-added and penetrate new rnarkets
Thisledto ihe tufll-
aroufd ofthe enlerpriscand its subsequentgroMh.
ofthe diferentphisesis sunrrnirrized
Hiqhlights below:

HIL] (, TS

1994
Th€ Birth Palns a Dr Arboedn deslgred hlsowndecorticntlng
rnachineafd eslablished
of lhe Ent6lprlse thclLlB0lGNEnterprisos.rs n soc prcprletorship
a Theoulputs ofiUBoKEN weremalnydcliveredto SorianoEnlerprises
a Problcms $'erceircour'rlcrod:
a Buycrpurchiscd libcfony at peakse.rson;
this$rasaboulsixnorlhsn ycnr
a SofiinoEnterpfiscsfinay sloppedbuyifg
1995
Exporl of Pro.luctg a Sccn!seoflhcsucccssfu ELICA lr irrilalionproiectt
expcricncc
to Germany Dr Afbolcd.r
u/nshircdasClZConsutrnt foran irrlgationproject in
(h nnqN,h]-Tr:liand
a \\'rir 0cnrif! 10submlt ilreiennin.rcport 10CZ,DLArboledn
.orrh.1cd
rf iJnponcroicocorulibcrgqeotcfile fc15afd fasciucs
a Dr Arbocdirbo!ghlf.Lscife-maklng
equipment afd brougl)iit to lhe
PhilippiIcs
a FasclDes
nrarLriaclurcd
ln the Pl)jlipplnes
wereexpoired
10Cefmany

the Japanese t'rarhet a VisitedTokyoll rivcrsiUhlsalrni milcf

a Wasablcto conticta cornreclor u,hoseprojectwirsto rchibilitate
a ri\rer
a Exportc.ifascines to hpaf
1996
Creation of a T.rppirgBUCA9udefls doingtheifthesigi\ /inesnracleof coconutliber
v/eretestedfor iersilesirength. !\'ercpositive
ResLrlts
a Expcfinrentswerenradeon \i/eavingoi fets Rcsults werelike$/ise

1997
Openingthe a Primary
blrslness wasexpodlngproducls
of IUBOrcNEntefprlses
Local Markel
a A contactffon Fi Eslatc',\'asobl.rined
aU1fofl,r'.l..rll i p !r'c.. ,ol loo ir .p r.o
a brea[through
1998
Expandingthe a i\'loreocalconlrects
$rerecorsummated
Local Market a IUBOKEN Enterpisesapproached
FSSI
ior additionalfnanclrq
 SUMMARYOF PROJECTCOMPONENTS

FSShasthreebasiccriteriain suppoiingprojectsFirstthe projectrnLtst be

ecologicaly sound.Essentia
l)t this meanstlit ihe projecinust |lclpprctcct
of rehirbilltate
the environment or at crsl the projectdoesnot ham the

secon4the projectmuslbe community-orlertcd. lhis meansthatthe

projectrnustbe ableto serveor benefitthe peoplein ihe communi\r.
Concretely, this maycorn€in the formsoflivellhoodor employn€nt
generaton.
Third,the projectleadsto the viabiityofthe cntefp se.In th.isconterlthis
is not linritedto financialviability.
Whie frnancialretumsshouldnot onlybC
positive br.rtat pir Withcomparable standardg
the otheraspects ofthe
enterpflse, suchas technoogy,marl(etsand mafngemeftmustalsobe
functionlng pfoperly.

DESREDRESULT 1I
ENVIRONMENTPROTECTEDAND REHABILITATED
Thereafc 1u'owaysif whlchthe projectmikcs a positve efiecton the
cnvlrofment0n the onc hand,the projectis .ble to usefarmwosteas its
basicrawDaterlal,thcrebytfafsformlngit into prod!ctsurithhlghcrvaluc
0n tre olherhafd,t re products
bej|q ntanuf.rct!red-geoterlilefets
fascnes,anclco(opeat-are lfnovallveso ulio|s io ct]\rironrncftal
dcgrada|on,
Jhes!nnary belo$'showshou/theseproduclshe p protectand rchabllltate

tX nTlr [ffeclsof Products

o] Envtronntel'lt

PRODLI]T L I F F CO
TN L N V R O N M I N I

( o rlroe
l r o s i o fn s l o p o s . n rf .ol r ds l ) o u d r r s
Re.lL/&uod.rlilr/01scc.l r.rsin refohrsiai
or pfojocis

( ontror.roslon n rivefbafhs!|d slotes

l i t c f i o x c m a t d i rs f r o nw i t e rs y s t e m s
Red!.emorri ty ol rirsfov. scd nls I manqrove

ln'pruves
|lr\,snri .irrradefstc ol soil (rch fs wrier
 DESIRED RESULT 2:
LIVELIHOOD AND EMPLOYMENTGENERATED
Thereare1r,\'o
ways in whichthe projectis ableto generateincomelor
households Oneis via employmentin the plant lhe otherrouteis through
generated
ivelihood bythe devolutionofsonreprodudionprocesses to llle
communilrlevel.

Production Flow at the Plant Level

enploymentis genelated
Sinilarlo otherprcjec1s, bythe dlflereftprocessing
n)odules !rdedahen attheplantsite
Exhibil11 belowdescribes process
the differentstag€sin thc proclu.tion
andthc coffespondin! laborand equipment requircmcnts.As rnay be
dlsccrned,at cast21 peoplecnr be empoyedal ihc panl sitethis excludes
pcfsorlnel.
officc-l)ased

$ J tL ll]e ProductlorFlow(Plint Levcl)

P R O D L/]A( C I ] VY L\I,JOK l'MtNl

:0L.r (A nflry
f,cf8 lf Day

Nrl(o o.lion I lVc

( t i . (! J r )
)riar) a,rt|( 8 - 1 0\ n L l s

:100-,100
saclis

u] rll
(fofrr..i!iL)
brcks
8001000
(C.ft icnrr J
Ba f!

Drynq

Bar! 50-60bdes

F.scre M.k U 200 [! 22 pca

300 [q 16 pcs
500 Lg-gp6
(6 r loflil
 Productioh Flow at the Community/Householdlevel
\ 4r.1setsthis pafricuar enterprise
apartftornthe restofth€ dccorticating
proieclsis the high numberof households thnt cif be provktcdwith
ivelihoodactiviUetpafttcuafy in Thcproducliofof lcotcrtiierets.
Exiibit12 describes the stagesin thc productio|process ana e
cofiespondlng lrbof andequipmentreq!ircmenTs ai ih€ communlly/

Y L I /l I' I r . P o d ' . l , o r l o \ \ I o - 1, r L rr ' r . o . . ro . | . . . . J

,Rlt0ll(.T/A(
lvry LABOR IQL fr'llj\ I

( i c ! l e x tc N r t l ] r o d L r U o f
IwIn! l w r r r ( N 1(il r l r c l 0 1 l - 1 i 1$1t1r r . s

looi Lios
lr .!.l

DESREDRESI]LT 3:
VIAAILITY OF ENTERPRISEIMPROVED
Thefinafcinliss sliutccof l-SSis crf(j.tc(tto U|,t ; ac lttc crpil)iliT!ofltrc
cntcrpTsc 1()sctviccb ggcrsLrppi! corjlfrL-ls
nndto (.|JD. I r()l to dose
deals\,rithsclerac icnlssl|lullnrjcol5l!.llrcsc!,,,i1lropdlly |tl olc llc
viablliuol lhc enterprise

THE FSSI FINANCIALPACKAGE

TheFou|daliorprovideal s pia[aqc if ihc ldrf) of i o|c-Jicil oin. fhc toh
amo|nicdto t)hpj.54S000.lh
ioartrofi l:SSl 5 t! lrfo[.| dowf inlo:
a WorlilfgCipjtil Conpo|crl.Th. J D.it1!I tir r-orl\tr! citpttiri
aNou|1cd10P rP3,298,000.
a FixcdAssetConporeft A pofion for ii\.rl rss.rs ,a, rppro!c.].lhts
\!ns equivalcnttoPhP1,250,000 a|d ir to be ficd tor Urcptrch.scot.
len-Ilrteeer truc[ <tfL]a stit.hif!t rfn.ht rc
 O . U T C O M E SF O R E N V I R O N M E N T A L
PROTECTION
AND REHABILITATION

naio,
i , ' . . ' " " ' , llrcsc D o d u . - , r . u . tt ., r. .r . r q m a n u i a c t uJrueBo LDh) t N
lLnrc4rrjscs
ifclude geot€dile
' J ' , s h o ' l , , . , , , , , ' , , rt neb:;l ;
, ; 'j"; , ' " ; ; " ; ; " . ' ; l ; 1 " " " i I o ' o D L ,ar, c
E\HlBrll Summary
ofoutcomes
iorRcsrfi
DESIRi:D
RE5tJtIS
I'LR]ORN'IANIF
A,1LA!I]RL5 oLIcoN,tF5

r r v c r t ) .[ rs ] 1 o h . r . i /l k r " / r i b i t t r l ? d
Sirg!rrrij,ofRivrr&otcrl
-|ic{litssili.rtioijof
vcr
troDrl t.rsst) to Uiss (

- l ' l a r i s( 1 r o w
( r e l j rirrrj . o { o l 1 f l r

Slop€ prot€ction
(Jc)r..lri., I ire
Jsc.r,prinJri,)iorpre\cntilgerostons
'cr:'1. ir stopest,tlhls
l ..13 rr,,ttjc .o.rtedor etela,Co arc]5 nave ,t6cofor
'^",::{.':^ ,rc\,rib|ih(c,he prob,em c\hibitd tc
:t l', orcrosron.

ffilI l,;:'ilh;:ii'fi::;li""l""
i ""JJil
;::,Hf#,:5;nlll
protectioh and
- -Rlv€rbahk Rehabitiration
o oa"r'n, 6s(i.. tr..rdclLnt\bc,.r i,rsrd,teo
],]l ?-n".
raluml ol ero.nl\in Eico,. aronqthc
Drro,rorneprojerr ,hi"I|\el
,r rpr.nen,alion
'::ll"rtepadmPnr
orrlfio;nenrdndr\d,u,d'
ill"-l lili':'" Roou.a.

th,,^,;;i ;:i;lf,:::,,:,:' ";.';i;;it**;,'#,:i:,,"1,:,*",

reouc.dso ,rtntrhc ch.liflcation
na. impro\edto ,tF ne{ hiqhette\el
lhproved ptant crowth
_
."l,".lr'o":",,rri],\ersJo\,\
cr.rlaveDecome
mdioru€r! [ has
"I,],lJll muchbpne'uher <omo,red
toorheinedia.
;:;:J;;[[i]':il":i#;
 OUTCOMES FOR EMPLOYMENT
AND LIVELIHOOD GENERATION
fu previouslymentionedtherearctu/outodesofiob generalion fromthe
operationsofthe enteQriseTheseare in the formsofdired ernployment
at
the plantand livelihood
generation
ln the communiiy.

Employment at the Plant L€vol

Flowatthe PlantLevel(seepag€28),it \!as estimal€d
In Production thati
plantcouldemploya mjnimumof 21 employees Nowevetndual employment
byluBoKENEnterprises hasexceeded this number
TheIeareabout41workelsdiredlyemployed bythe organization.Based
on itsffnancialrcportin 1997,the iotal Dayroll
is nlorethan one mi lion

| 14.A.
l:Xllll.l Summary
oi oulconres 2 (PlantLevel)
fcr Result

RFS|J
DTSIRFD IS I ' L RO R M A \ T ]N 4 I A S I ' R . S 0t,lc0Mrs

LinpoytrxxrL
CicfcfaLed

iolii Ia!iol (1997)

l , i ( l o $L
, dl)or l'lrf' 1,168535.0U
sr,rol li Wir.s 7J22,\.00
I ru il! 288,755.00

Llvglihood at the Connunlty/Hous€hold Lcvel

Demandfor geota\tiienetscreatesa bachr.rr(illnkageto the comnunitiesas
two stepsin the production
prccessaredevolvcd to the households

Livelihood conerallon
Civenihe levelofoperations provides
in 1998,.lUBOKEN dired livelihood
supportio about600twinersnnd 70 weavers. CerLrinly,
livelihoodgeneration
ofthis scaleis rarein ruralareas

lncome G€noratlon
\ hat js aho noiablein thisenterpriseis thatthe househo d incomethat can
be obtainedftomtwiningand[,eavingis muchhigherthancopra-based
adiviiies.In fu4 it ls higherthan mostactivjties
lr the ruralareaswhether
on-iirmor offarm.
6rossdaiJyincomesfton t\riring can rangefion a lo$'of PhP219.00 to
as muchas PhP39600perdaydepending on the productivity
ofihe work
terns Assuming22 workingdaysin a rnonth, the corresponding gross
monthlyincomeranqeis PhP4,818to PhP8,71200perworkteanl
Forweaving, the grcssdailyinconesrangeftomPhP205.00to PhP292.00
pel dayperteam.0n a monthlybasis, thls is equivaLenttoPhP4,510to PhP
9,636 perworkteam.
LXHlllIl4 B Sumrnary
of Olrlcomes
for Resut2 {HH LeveJ

O L 5R L DR F S I ] T 5 i,[R IRI4ANI F N1LASL

RFS 0u f(0t\415

v e l i r o o Id h . o r r er i . n e i n ( l \!n,n!l
NLrr)rr .i !! rfrs oflnanFntcrpr rs: 2li0
]|l)of,cf Fnterpritcs
140
F l l t r r o n r .f r r r . f l l l tht,4,8t8-E712
lt. :J l]! son (ri r wo,r f! 2: dir"Vn]ol (200'160lw fes Ferdr\'l

N L , r n t ) co l W . l ! r f s
r.!nr. t\i nortll , t r' 4 5 1 0 _ . r . 4 3 [
(frf 2-r.r{ n.n worl nq 2Z (lr!s/,no (i-1.1() 5 lr! .rrJ')

OUTCOMESFOR IMPROVEDENTERPRISEVIABILITY

At thls ph"rseoilre cnterprise! dcvcopmcnlthc emcrgentneedis to dcvclop

ilnd dilcrsiF/ncl\'fiarkcls1oifcrri]scdcnnrd for producls.
Wl r lc cx(cpliorof llrc (h\'illl ifd conpaciingproccss, proclrrdiorl
ot ol rcr slirllcscaf slill bc incrcrscdby nddinllil wolli shifrevcr ii
cnpilcilics
thc fL]]lrbcr
ol cqL]plrcrtrcfrains lhc sinre

Tlrcdcsircdrcs!ll of de!,elopirg rcw nnd biggerclicfls irppe.rsto ha\rebcerl

.clrlc\'c. b! ilrc proie.t n Ternrs
oi nrnrber,buycfsfroJnthc locil frarl\et
incr€iscdto rl lclst 4 conrpinicsconrpired10.rsirglecllentlhc prcvious
ycar

Higher Sales
I turn.Ire bigq.rrunbcr of c icfl! raslri 1satediiselflntoa biggefvo une

IIH BrI15.SumrnaD,
of outcomesfor Resut 3

] F SR F I IR T 5 L 5 P F R F 0 R I / IL
A Nl F
l AiLlRf5 LIL fOr,lL5

V:r! lly of Lfterprse.nlroved r r t i s . . l N rr b f r o l L o . i i ( l r E

1998

lroirn,Koreir& [4i]aysa

L99l

19.r8
 SU!,lMARY OF EXEIIPLARY PRACTIcES

Several
exemplary pradicesrnaybe identifred
if ihis projedWe€numerate
someofihen be ow:

Use of l,Yaste Matter

Ihis caseis afother concreteerpe encewhich showsthatlvastemattercan
be tEnsformed intoprcducts that hrve hlgt va uc fot onlyin fiofetary,but
in environmentalterms is wcl,
Tothis day,coplaproduction ls thc malnecononicac|vlv in cocofut
arens.Llndefthis setuD mostofthe coco1ul hltskscfd up .rs$,astematerial.
konicay, rcvenues fiom the sub-components of lhiswastcnrnterial-
coconutpeaiand/orcoconutfibcr-rnore oftencxccedthc lnconc derivecl
ftomtre prinnryprcdt-rct-copra. lhis is truecspecinlywhcnthe worldnrarkei
ofcoptais reativeystabe

Environmental Rehabilitation Producls

As nwarencss levelsofthe rnassivc efvifonmcfin pfobcrn hnvcdfafialically
lmprovcdovertime,thc correspofdlng ntall\clior c tvironmcfi,fiefdy
prodlctshasli[c$/isegrowr.Wlh thistrefd,man!frcturcTs nrescranbing to
dev€op pfoductsthit wlll satis0/
this dernand.
ThcprcdlctsoFlhisprojedire not ofly €nvlrc|menffiienclly ln thatthey
$'astethe producis
uUli?e themselves scNreto te tlbi itntcnnd prolectthe
environment(scefexl scctof).
As sLich,
lncrensed snlesand icccptan(cof lhe prod!ctscir onlynrenn
mofeareasfehabillntedand protcclcd.

Multi-EcosystemApplication
Anotherteaiurelhai is qultcuriquc to t tc produ.lss the versi|lllyof its
uses.Forifstincc,coco|LttpcatLtscdns qro\,1,1|lg
|tc( Lr havegleatpotential
forlhe clop.ndsard the (rplind5ron.ily, prodlccrs olhigh-vir uc crops
L(l ,1 'Ll'lo!\cts.' \ pr'i) t,<l rt. I
0n the otherhnnd,coconutfbcr,whcnwovenlrlo fett arearti,erosiou
devices for the s opesin the uplards\'Vhcnil is co|rpictcdintohs.ites, iTis
usefutor erosioncontroliD riverba I \s as nr.rngrovcrciorcstilio
n.\{/hen f ber
ls stitched,
it is usedir mailfcssesif lrban alld ruralhouseho ds,nsvrel ns
in upholstery of luxlrDr
cars.
Thereare manyothefprodu.tsard appltcatiors that remitf to be
developed tor the market

Extensive Livelihood ceneration

Aparilrornit! vilue to ihe environment,
the projectrrs dirccilrnpacton the
hoLrseholdleve ir termsof livelihood
gererntjon.rndits conscquenT
provision
of income. Thi5howeveiis specific
to the producionofgeoic\tile

Depending on the dernard,ihe nunberof peope thit caf be reichedis

quiterernarkable
In this casestudya one, ivellroodhasbeengenerrtedfor
ovef600people.\4hat is ever morefernarl\able is that ircornesderivedafe
muchhigherthanwhat coconufbased househo ds usunlydeiveiom copra
 Sulplus-G€nerating
theenterprise
In reality, runbyDr.ArboledaJUBoKEN oneor
EnteQrises-is
the fuwenterpsesthat is able to a
operate bove k€ven
brea levelgi-e it
generates the
tlnfortunately,
a ;urplus, same cannotbe saidformany
decoldcating plants.

simple, Appropriats, and Replicabls T'chnology

Finally,whatis mosiinnovative in thisventureisthattheproduction process
and
sinple,it isvillage'basedi
ls relativey highlyreplicable
Forthepreseuttwine|s andweavers in Bicol, to tlle process
adaplation Ls
hardv a Drob emsinceit isvery simllartothe processes
used in producing
anacitrarinesandotherhandicraff.lhe needed equipmentisveryafordable

Potential Indu3tly.Level Inpact

Butihc polenlial impact oflheprojectefendsbeyond thelocalconrmLlnlties
wrereit opcrates, afd bcyofdthe siteswhere the productsateinstalled
Atlhistime,rnafy peopc have begun trclabelthe coconul sector asa
sunset llcluslryAfd tlrisis notwjthout basis For one,'opla pfoductlon and
Lner Dr:ces l'J'e oeenJlstabe dLeto lalLral calnmlies sucl' as i}phoor s
g1 iotal
alen prinled to cocorLts ras d€cliled due
"n4 1nq l\;59,1;n..*se,t're l]avealso
to thcramDant ofthococonut
cutting trcesforlunlbelStudies
slro$,rtlai coconLlt dependent households afe amolrg the pootest in the
col]nfiyrccay
Butu,ithi lc developneni of newproduds thatrespond to gfowing
problefis of soI orosonand owcrop productivity'
thele seems to benew
iropcForthc coconut scclorll canseNeto renew and tehabilitatethevaflous
eco-syslcrts. t likewiseplovidesnewand highef soulces of income
Civcrr therenraysoorbea rediscovery
lhe polenlials, ofthlsTfeeofLife'

jlit)/,\,1l,,Lnirr r'cntttkt Rc!atchandtdu.ationh 'a'ir/ Dcv'lopDc't

SttLlv
Ptu'lu'E A 31u't
I tt\( ^'l t) t nNionr&1tu\! lnund a"t sa'izlj' FanIk'tle ot Lnonat
(Unplblishat/
tttt,,nltu P,tt,tlL@L.l andlktion Ka|as lttE
=JIPuNoNcenvnN
* Annuuo I 6rh f..,, Veniili rV B {lB
Alia,o sr , SaL.d! V laBc
fflNJI & TOUNC 'NTEfNATIONAT

REPORTOF INDf,PEN'DENT
AUDITORS

The Board of Trust€es

Foundationfor a SustainableSociety(FSSI)Incorporated
(A Notrstock,Nonprcfil Corporation)

We haveauditedthe accompanying statementof financialposition ofFoundatjonfor a Sustainable

Society(FSSI) Incorporatedas of December31, 1998,and the relatedstatements of revenues,
expenses andcumulativeexcessofrevenuesoverexpenses andcashflows for the year thenended.
Thesefinancialstatements arethe responsibility
ofthe Company's management. Our responsibility
is to expressan opinionon thesefinancialstatements basedon our audit. The financialstatements
of Foundation for a SustainableSociety(FSSI) Incorporatedfor rheyearendedDecember3 I , I 997,
were auditedby other auditorswhosereporr,datedMarch 25, 1998,expressedan unqualified
opinionon thosestatements.

We conducted our auditin accordancewith generallyacceptedaudkingstandards.Thosestandards

requirethat we plan and perforrnthe audit to obtain reasonableassurance about whetherthe
financialstatements are free of materialmisstatement,An audit includescxamining,on a test
basis,evidencesupportingthe amountsand disclosures in the financialstatements.An auditalso
includesassessing the accountingpinciples usedand-significant estimatesmadeby management,
as well as evaluatingthe overall financial statementpresentation.We believethat our audit
prorrdesa reasonable basisfor ouropinion.

In our opinion,the 1998 financial statementsrefemedto abovepresentfairl),, in all material

respects,
the financial position of Foundationfor a SustainableSociety(FSSI)Incorporated as of
December31, 1998,and the resultsof its operations and its cashflows for the yearthenendedin
conformitywith generallyaccepted accounting
principles.

January
8, 1999
MakatiCity
 FOIJNDATION FOR A SUSTAINA}LE SOCIETY (FSSD INCORPORATtrD
(A Nohstock,NonpnJit Coryoration)
STATEMENT OF FINANCL{L POSITION
DECEMBER 31. 1998
(With Cotfiparatit)eFiguret for 1997)

1998 1997
ASSETS

CI]RRENT ASSETS
Cashandcashequivalents 9,67.1257 7,909,',773
-
Currentportionofloansreceivable
prciects- net (Note3) 43,409,532
Accruedintercstrcceivable:
Projects 2,964,166 2,t18,936
Investments 658,s84 314,564
Proiecl Cuarantees (Note4) 4,000,000 3,000,000

TotalCurrentAssets 60,709,s39 46,143,t

t8
LONG.Tf,RM LOANS RXCETVA-BLE-
PROJECTS - Net fr'ole l.) 11,377,548 t7,3t8,69s
FUNDS HELD IN TRUST - Net fNole l) 48s,12s,419 438,907,015
PROPERTY AND EQUIPMENT - Ner Ay'ore6) E,623,006 9,117,448
OTIIER ASSf,TS 877,133 1,2t6,419

566,112,705 513,362,695

LIABILITIES AND FLTNDBALANCE

CURRENT LLdBILITIES
AccountspayableandaccnredexpeDses 508"388 266,143

FUN'D BAI,ANCE
Members'contribution E5,500 E5,500
Grant 454,422,597 454,822,59',7
Net unrealized
losson declinein marketvalue
of investment
portfoliofNotet 11,s30,929
) 2t,103,224
)
Cumulativeexcessofrevenuesoverexpenses 122,827,149 19,291,6'/9

566,2.01,311 51i,0q6,552

566,712,105 51J,J62,695
 FOf]NDATION FOR A SUST{NABLE SOCIETY(FSSI)tr\COIU,ORATED
(A Nonstock,NdnprorttCorporatiott)
STATEMENTOF RXWNUES,E)GENSESAND CUMULATIW
trXCtrSSOF RtrVENUf,SO\'f,R EXPENSES
FORTHE YEARENDEDDECEMBER31,1996
(Wi1hCotnparatiye
Figurcsfor I 997)

1998 1997
REl'ENUf,S
Incomefrom fundsheldin trust P 49,795,229 P
Interestincomefrom:
Projects 1,216373 2,326,732
Investments 932,296 2,509,040
AusIanteefees(Note4) 715,714
Others 193,192

55,828,893 40,601,616
EXPENSES
Salaries andwages 3,283,045 2,765,049
Ptoiect grants(Note 7) 2,770,143 4_,4
| 8,',7
0',7
Losseson guarantee fund 1,000,213
Employees'benefits 895,14s 496,932
Depreciation 802,36t 661,788
Professionalfeesandotherlces 7 41,768 1,025,387
Provisionfor doubtfulaccounts 619,161 1,035,786
Travelandtransportation 438,811 438.999
Securityservices 348,914 283,294
Utilitiesandcommunications 341,966 331.569
Meetings
144,668
Booksandofficesupplics 193,870
'faxes 2',76,548
andlicenses 20,361 r5,69i
Miscellaneous 499,803

12,293,423 12,609,6',73
f,XCESSOF RtrVENUISO\aEREXPENSES
@dre8, 43,535,,t70 21.991.943
CUMULATIW EXCESSOF REWNUf,SO\'ER
EXPtrNSES
AT BEGINNINGOF IAAR 79,291,679 51.299,736
CUMULATIVtrEXCf,SSOF RXVENUUS
O\'ER
OXPENSES
AT ENDOF \TAR P 122,827,119 '79,291,6J9

SeeNotesto Finrncial Statements,

 FOUIIDATION FORA SUSTAINABLESOCIETY(FSSDINCORPORATED
(A Nonstock,NonprurtlCorpo ttion)
STATEMINT OF CASHFLOWS
FORTHE }'f,AR EITDEDDECEMBER31,1998
(With CotrparativeFigwesfor j997)

1998 1997

CASH FLOWS FORM OPERATING ACTTVTTIES

Excessof revenuesoverexpenses 43,535,470 21,991,943
Adjustrnents
to reconcileexcessofrevenuesover
expenses to netcashprovidedby (us€din)
.hPr,rino q.t'ivifiPc'

Depreciation E02,361 661,788

Provisionfor doubtfulaccouDts 619,164 1,035,786
Net changes in operatingassetsandliabilities
Increaseinl
Loansreceivable - projects ( 1,688;304 47,157,356)
)
Accruedinterestreceivable:
Projects ( E45r30) 2,028,409
)
Investments ( 344,020) 229,130)
Projectguarantees ( 1,000,000
) 2,000,000
)
Increase(decrease) in accounts payable
andaccruedexpenses 242,245 265,128
)
Net CashProvidedby (Usedin) OperatingAcriviries 38,322,286 2 1 , 9 9 r . r)0 6

CASH FLOWS FROM INVESTING ACTIVITIf,S

Decrease(increase)in fundsheldin trrsr 36,646,169) 16,169,890
Decrease(increase)in otherassets 339r86 4 5 6 . 1 2)5
Net acquisitions
ofpropertyandequipment 241,919) 190,380 )
Net CashProvidedby (Usedin) InvestingActivities 36,554,802
) 15.7t1.185

NET INCRiASE (DECRtrAST)IN CASH AND

CASII EQUTVALENTS 1,767,481 6,26'/.121
)

CASH AND CASI{ EQUTVAIENTS AT

BEGINNING OF 1TAR 7,909,713 t4.t'/1,494

CASH AND CASI{ EQUWALENTS AT

END OF YEAR 9,677451
 FOTD'DATION FOR A SUSTAINABLE SOCIETY (FSSD INCOR"ORATED
(A Nonstock,NonpruJit Corporation)
NOTI]S TO FINAI{CIAL STATEMENTS
(With ComparativeFiSwesfot 1997)

I, ORGATIIZATION

The Foundation, as a nonstock,nonprofitcorporation,was regist€redwith the Securitiesand

Exchange Commission 6, 1995. Its primarypurposeis to contribute,encourage,
on September
assist,provide technicaland managerialsupportto nongovernmental organizalion(NGO),
people'; organization(PO), cooperativesand similar private organizationsin sustainable
production.

On September6, 1995,the PhilippineGovemment,through the Departmentof Finance,

grantedP454.8million consistingof 5% in cashand 95% in governmentsecuritiesto the
Foundationfrom the proceedsola debt cancellationunderthe BilateralAgreementon the
Reductionof Extemal Debt entered into by the Governmentsof the Philippinesand
Switzerland on AugustI1, 1995 The fund will be usedas grantsor loansto supportproJ€cts
of NGO'S, PO's, oooperatives production
and similar Privateorganizationsin sustainable
whichfalls withinthe guidelinessetforth in theAgreement

2. SIGNIFICAIIT ACCOI]NTING POLICIES

CashEquivolents

TheFoundation highiy liquid instruments

considers with a maturityof threemonths
purchased
or lessfrom dateofacquisitionto be cashequivalents.

Pruperly a d Equipment

depreciation.Depreciationis
Propertyand equipmentare caniedat cost net of accumulated
computedusingthe straightlinernethodover th€ estimatedusefullives of the assetsranging
from 4 to 20 years.

Thecostofrepairsandmaintenance is chargedto incomeas incu ed; significantrenewalsand

betterments are capitalized.Wlen assetsare retiredor othelvise disposedof, the cost and
relatedaccumulated depreciationarc removedfrom the accountsandany resultiDggainor loss
is reflectedin incomeforthe period.

Funds Held in Trusl

costor market.
Fundheldin trustarevaluedat the lowerof aggregate
3, LOANS RNCEIVABLE - PROJECTS

This accountrepresents loansgrantedto fie following cooperatives

and otherorganizations
with annualinterestratesrangingfrom 12%to I7% in 1998andfiom ll% to l6Yoin 199'7:

1998 t991

GeneralMarianoAlvarezMulti-Purpose
Cooperative 29,842,000 P 29,8,+2,000
AllianceofPhiiippinePaftnersin Enterprise
Development, lnc. 4,000,000 4,000,000
JubokenEnterprises, Inc. 3,582,012
HumanDimensionEnterpris€ 2,s50,000 1,750,000
DavaoFederation ofFree FarmersCooperative, Inc. 2,436,329 2,000,000
IPIL Consumer Mult!PurposeCooperative 2,400,000
TagudinMulti-Purpose Cooperative 2,t85,714 2,550,000
Institutefor theDevelopment ofEducational
andEcologicalAltematives 1,999,500 1,799,500
PITAD Foundation, lnc. 1,838,669 345,000
Broad Initiativesfor NegrosDevelopment I,r37,500 500,000
Centerfor AltemativeRuralTechnology, Inc. 1,100,000 I,100,000
Hamessing Self-reliantInitiativesand
Knowledge,lnc. 846,154 4,400,000
Agaroph),ta Philippines, Inc. 840,594 374,218
Kapunungan AIangsa Kasadpnn Sugbu.Inc. 790,625 840,625
MisamisOriental-Cagayan deOro Federation 300,000 300,000
KaanibFoundation, Inc. 178269
EYS Commercial s0,000 _416,66',7
MaligayaWomen'sCooperative _ 8?6,316
PhilippineCenterfor Investigative Journalism
56,071,366 51,154)26
Lesscurrentportion 43.409.532 11.J99.845
12,667,834 t 8,354,481
Lessallowancefor doubtfulaccounts 1.290J86 1.015.786

P 11,377,548 P 17.318.695

Theseloansareadequately
collatemlized.

4. PROJECT GUARAI'TEES

The Foundationhas a guaranteelund amountingto P4,000,000in 1998and p3,000,000in

1997. This fund was established
to supportsmall-scaleprojecrsimplementedby the New
RuralBankof SanLeonardo.
 Theguaranteeingportionofthe depositshall eam a guaranteefee of 15%per annumwhile
theunusedportionofthe guarantee
shalleamtime depositinterestrateof9.50lop€r annum.

5, FUNDS IIf,LD IN TRUST

TheFoundation hastrusteebanksactingas fundmanagersto investthe Fundin combination

of
andotherinstruments.TheFundis heldby the following:
equities,securities

1998 1997

Trustee
Banks
AB CapitalandinvestmentCoryoration P 108,429,662 P 126,091,251
SolidBankCorporation 89,401,863 78,991,583
DeustscheBank 89,030,425 s7,093,229
MetroBankandTrustCorporation 76,492,565 70,133,128
PhilippineCommerciallntemationalBank 70,f70,538 s4,s03,251
BankofthePhilippineIslands 32,558,622 13,197,791
FarEastBankandTrustCompany 30,512,733
496,656,408 460,010,239
Lessallowancefor declinein marketvalue
ofinvestments 1r.$0.929 21.103.224

P 485^125.419 P----r13-E
902JlU

6. PROPERTY AND EQL'IPMENT

Thefollowingis a summaryof PropertyandEquipment

asofDecember3ll

1998 t997

Building P 4,810,265 P 4,810,265

Office €quipment 1,208,422 1,078,863
Transportation
equipment 885,074 885,07s
Fumitureandfixtures 586.070 585.010
7,489,831
'7,359,213
Lessaccumulated
depreciation L766.425 1.081.765
5,723,006 6,2',77,448
Land 2,900.000 2.900.000

P 8.623.006 P 9.177.448
7. PROJXCT GRANTS

Thesercpresentgrants provided for developmentactivities such as technicalassistance.

economicresearch,feasibilitystudies,productresearchand deveiopment,pilot productioD.
capabilitybuildingandotheractivities.

awardedgrantsto thefollowing:
TheFoundation

1998 t997

MindanaoRiceTradingServiceCenter P 420,560 P 420,560

PhilippineCenterfor lnvestigative Joumalism 258,283 43',7,424
BroadInitiativesfor NegrosDevelopment 224,500 16',7,000
AgarophltaPhilippines, lnc. 157,000 212,5Q0
IPIL Consumers Multi"Purpose Cooperative 150,000
Centerfor AltemativeRuralTechnology, Inc. 60,000 90.000
HARIBON/Foundation & Pederasyon ng mga
Mag-aakwaryTrm ng PiliPinas 6l1,750
St.AugustineSambaiiFoundation, Inc. 410,631
PhilippineBusiness for SocialProgress r46,000
Acupunct\rre Therapeutic & Research Center 135,800
National Peace Council 100,000
PHILDHRRA 100,000
Institutefor theDevelopment ofEducational
andEcologicalAltematives 100,000
Harnessing Self-rcliantInitiativesand
Knowledge,Inc. '71,',700
Kapunungan AlangsaKa.adpan Sugbu. firc. 65,542
PITAD Foundation, Inc. 50,000
TagudinMuiti-Purpose Cooperative 49.800
Kauswagan VictoriasFoundation, [nc. 40,000
Smallgrants 1.500,000 910.000

P 2.170.1.43 P 4.418.707

Smallgrantsrepresenlgrantsto variousnongovemment organizationfor the samepurposeas

thepmjectsbut at an amountnot in excessofP50,000.

E. INCOME TA.X

TheFoundationis a corporationnot organizedfor profit but opemtedmainly for the promotion

of socialwelfareas contemplatedundersection30(g) lforrnerly26(9)] of the Tax Code,as
arnended,and therefore,ex€mptAom the paymentof incometax on incomereceivedby it as
suchorganizationandthercforeneednot file an incometax refumconceminqsuchincome.
 I:'1""':''"i:';"' t:i:'i"'.""0"x:;r:o'l' internat
revcnue
ta\esimDose
personrro'n1
*,r,r;:;;.;;:;;;i:;fi:Srr,.":,;i,T;dti:;'rl'J,'#.'",J,1,,:
9, PROHIBITION ACA]NST
SHAIT-O\,I G hl Contonarr AssETs AND EARNTNG.
upon rhe dissolurionand w;n,1i". ,,-
'r,rrt.
""ii,r.i',"'.,,;:;1"#il'd:lh,,jfff":jh:::"j,Hjl norperson
orpersons
members
;;ti"T:::ili:i5i::ft:..::
i:::il4;il ##J:H::,ffiil:,uA,I or,he

ffi#{,ffifffi*tur*:tsH

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