SOCIAL ENTREPRENEURSHIP

SOCIAL ENTREPRENEURSHIP IN THE PHILIPPINES

During our first semester, we learned that Social entrepreneurship is the process by
which individuals, startups and entrepreneurs develop and fund solutions that directly address
social issues.In our last meeting, we already had a preview about social entrepreneurship.
Today, we will discuss social entrepreneurship in the Philippines and the different social
enterprises and social entrepreneurs.

I. Learning Objectives
When you have completed this chapter you will be able to:
1. Define what social enterprise is.
2. Understand why the Philippines is one of the places for social enterprises.
3. Identify and give examples of social enterprises in the Philippines.
4. Identify some successful social entrepreneurs in the Philippines.
5. Discuss the importance of social entrepreneurship in the Philippines.

II. Materials Needed

● Laptop or cellphone
● Google meet
● Powerpoint Presentation

III. Discussion
A. What is a social enterprise?
It is a business whose primary objective is to serve a purpose that has a positive social
impact. It seeks to earn profits to be sustainable and give benefits to the identified sector of
society and environment, as opposed to the normal corporate objective of maximizing profit for
shareholder/owner’s benefit. A social enterprise addresses social issues and contributes to
improve society.
According to Price (2008, pp 1), “social enterprises are businesses with primary social
objectives whose surpluses are principally reinvested for that purpose in business or in the
community, rather that being driven by the need to maximize profit for shareholders and
owners.” Social enterprise is mainly associated with non-profit organizations, mainly privately
owned, which sell goods and services with an aim of yielding a return on investments, with the
accumulated profits being ploughed back into the business or they are directed to social
purposes.

The profits of these organizations are not maximized to benefit the shareholders. In
addition, social enterprises may be developed with an aim of fulfilling needs that are rare, such
as providing employment to the less fortunate communities and the disadvantaged individuals.
Such groups of people include the disabled, low education candidates, and ex-offenders, among
others. These social enterprises also operate in the less attractive locations for other businesses;
such places include locations with low level of education, rural areas, and social housing areas
among others.

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Social enterprise activities mainly revolve around the developing of countries, and they
include recycling, renewable energy, and fair trade. Social enterprise mainly aims at the social
challenges of poverty, unemployment, disablement, and underdevelopment, which may occur in
some locations and communities; they address such challenges via aid and social work (Kerlin,
2009, pp xiii). Just like other businesses, social enterprises compete in the market, but the
difference comes in where profits made are reinvested in social activities. Social enterprises are
also viewed as a response that is innovative and is directed into funding socio activities by the
non-profit organization (Nyssens, et al, 2006, pp 4).

According to Kerlin (2006, pp 249), social enterprises are characterized by the continuity of
producing goods and services, the aim to benefit the community, low amount paid in terms of
work, the initiative to take up risks, and the limitation of profit distribution. Kerlin (2009, pp 6)
further explains these characteristics; first, the continuity of producing and selling of goods and
services, with the social enterprises being known for their productivity of goods and services.
Secondary, high degree of autonomy involves their creation by a group on individuals who
govern these enterprises and they are not controlled by the government; hence, they make their
own decision. Thirdly, the important level of economic risk allows their employees to determine
their financial stability by how well they secure sufficient resources. In addition, the minimum
amount of work that is paid shows that most of their workers are volunteering while only a small
portion of them are fully employed.

Their aim to benefit the community entails serving of specific people in a community and
promoting social responsibility. Moreover, these enterprises represent an initiative formed by a
group of people with the same aims and objectives, while the decision-making process involves
voting, thus incorporating all ideas of the stakeholders. Lastly, the limited issue of profit
distribution requires that profits be distributed on limited basis with the aim of minimizing profit
maximization motive.

B. Why the Philippines is the place to be for social enterprises

Over the past two decades, The Philippines has seen a giant boom in social enterprises.
According to a study published by the British Council, approximately 30,000 social enterprises
existed in 2007. Since then, changes in the local business landscape have made it even easier for
individuals with humble ideas to create social enterprises here in the Philippines.

Without a doubt, the Philippines will continue to see an even stronger emergence of social
enterprises in the next decade; a very exciting time for businesses and society. Anyone aspiring
to create a social enterprise will find support from almost every corner of the local business
landscape—with comprehensive networks, government support, and academic institutions
beginning to roll out social entrepreneurship courses and socially responsible business classes.

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Many factors come into play when breaking down the reasons behind the emergence of
social enterprises in the Philippines. A very tangible example would be the ease of simply
creating, testing, and launching a business idea. Tech startups can easily create website mockups,
pilot test their many different ideas on a small scale, and grow rapidly in the span of a few years.

The internet is a powerful tool laden with free apps, informative articles, discussion boards,
and more—many of which play to the advantage of social enterprises in the early stages of
development. Without a doubt, the Philippines is laden with the perfect mix of ingredients for
social enterprises to thrive—the technology, the community, and the industry all play large roles
in changing the business landscape towards the favor of social enterprises.

The Philippine business landscape is set up with as few barriers to entry for social enterprises
as possible. It’s also a very tightly knit community, making it the perfect network for people to
find potential partners, investors, or simply exchange ideas. This is amplified by new
technologies enabling individuals and institutions to easily test and launch great business ideas,
collaboratively.

C. Examples of Social Enterprises in the Philippines:

1. Human Nature
Instead of the usual “start with a why”, Human Nature started with a “why not”? During a year-
long tour in the US for Gawad Kalinga (GK) in 2007, spouses Anna Meloto-Wilk and Dylan
Wilk observed the growing trend of affordable, natural, eco-friendly and ethically-made products
entering the mainstream market. The ingredients of these products were coconut, elemi,
sugarcane, aloe, etc. which were abundantly available in the Philippines. Something clicked and
they thought, “Why not produce these products back home and employ the poorest of the poor
that GK was already serving?” The following year, the first line of Human Nature products was
launched, together with sister Camille Meloto. Soon after, they received prestigious awards here
and abroad for their social enterprise. Among them were Entrepreneur of the Year Award from
Ernst & Young, then followed by similar awards from Schwab Foundation for Social
Entrepreneurship, Asia Society, and more. Today, Human Nature manufactures a number of
affordable, natural, eco-friendly, and ethically-made products in their Canlubang, Laguna plant
which uses the highest standards many times stricter than the required benchmark in the cosmetic
industry. They continue to grow, employing hundreds of residents from GK and other poor
communities. Gandang Kalikasan, Inc. (GKI) through its brand Human Nature, is the fastest-
growing social enterprise in the Philippines. Founded in November 2008 by Anna Meloto-Wilk
and Camille Meloto, two daughters of Gawad Kalinga founder Tony Meloto, Human Nature is
guided by the principles of being PRO-PHILIPPINES, PRO-POOR and PRO-ENVIRONMENT.
It produces natural and organic personal care products which are 100% made in the Philippines
and 100% free from harmful chemicals.
2. Rags2Riches (R2R)

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R2R is a fashion and design house empowering community artisans in the Philippines with a
vison of making style and sustainability co-exist. The story began in 2007 in Payatas, the largest
dump site in the Philippines. From the scouring dumpsites for cloth scraps to be made into foot
rugs (basahan) to be sold in the streets, the nanays were organized by Reese and trained to
become artisans that create fashion items together with renowned designers. In a world where
fast and cheap labour is the norm, Rags2Riches sets out to prove that people are always valuable.
Co-founded by Reese Fernandez-Ruiz, a Forbes Magazine Top 30 Under 30 Social Entrepreneur,
Rags2Riches works with local artisans across the Philippines to create eco-ethical fashion and
home accessories. Every piece is joyfully woven from upcycled, overstock cloth and indigenous
fabrics. By creating a business that’s truly inclusive, Rags2Riches collaborates with empowered
artisans as they strive to weave better futures for their families and communities.
3. Edukasyon.ph
Launched in 2015, Edukasyon.ph is the largest youth platform in the country empowering
students aged 13 to 23 to make self-aware education decisions that lead to a fulfilling career in
life. The site helps students gain access to courses, schools, scholarships, online education and
other resources and opportunities that enable them to find their most suitable paths.
Social entrepreneurship is a concept that's been around for a while, but its rapid growth the past
decade is impossible to ignore.

The concept of social value has its roots in charity but it has evolved into a different beast. More
than being charitable, social enterprises support communities by creating social, environmental,
and financial impact. Social enterprises work together with the underprivileged, giving them the
connections and knowledge to produce their goods. This, in turn, creates healthy demand and a
steady source of income for those in need.

The emergence of the social entrepreneur has brought new hope to the state of the country. These
are some of the notable people at the forefront of innovation, changing the Philippines one life at
a time.

D. Social entrepreneurs in the Philippines are:

1. Tony Meloto
● Gawad Kalinga and GK Enchanted Farm
● Meloto is the founder of Gawad Kalinga. As a kid, he lived near the slums and was
exposed to Filipinos living in extreme poverty. But it wasn’t until he was on assignment
in Australia that he felt the call to help and give back to the community. In 1995, he
started Gawad Kalinga, a movement that helps build communities. Gawad Kalinga has
been expanding in leaps and bounds since then, being implemented in over 2,000
communities as well as developing countries Indonesia, Cambodia and Papua New
Guinea.

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● GK Enchanted Farm is Gawad Kalinga’s initiative to raise social entrepreneurs who will
truly help local farmers and artisans, creating a ripple effect that will showcase Filipino
products and hopefully help end poverty.
2. Camille Meloto and Anna Meloto-Wilk
● Human Nature
● Following in their father Tony Meloto’s footsteps, sisters Camille and Anna, together
with Anna's husband Dylan Wilk, created Human Nature. A beauty and personal care
brand, Human Nature produces high quality, natural, and earth-friendly products that help
low-income communities, providing them with livelihood training, farming, and
processing equipment. The brand has won countless international awards for social
entrepreneurship and organic product development.
3. Krie Lopez
● Messy Bessy
● Messy Bessy was established in 2007 as a result of Krie’s program called HOuSE
(Helping Ourselves through Sustainable Enterprises). The brand’s flagship products are
biodegradable and natural household cleaners made by the at-risk youth who Messy
Bessy employs.
● Filipinos are familiar with Krie Reyes-Lopez's home and personal care brand Messy
Bessy. Beyond its eco-friendly products, the company also employs at-risk young adults
through the House (Helping Ourselves Through Sustainable Enterprises) Foundation,
which Reyes-Lopez started in 2015 to provide disadvantaged youth with education and
on-the-job training.
4. Anya Lim
● ANTHILL
● Founded in 2010, ANTHILL makes hand-loomed fabrics for clothing and accessories in
partnership with the Bulbulala Farmers and Weavers Association in Luzon, Handcrafters
of Mary Enterprise in Visayas, and the Daraghuyan Community of the Bukidnon Tribe in
Mindanao. Lim was recently awarded the special jury prize at the APEC Business
Efficiency and Success Target Awards.
5. Reese Fernandez-Ruiz
● CO-FOUNDER AND PRESIDENT, RAGS2RICHES, AND FOUNDER AND
CURATOR, THINGS THAT MATTER
● As the co-founder and president of social enterprise Rags2Riches, Reese Fernandez-Ruiz
has created the opportunity for an entire community to flourish through its approach to
upcycling scrap fabrics. Rags2Riches collaborates with top fashion designers and
retailers, repurposing tatters into handbags and other accessories. These products are
retailed on her online lifestyle marketplace, Things That Matter.
E. Importance of Social Entrepreneurship in the Philippines
Social enterprises are changing the way we do business, from a profit-driven model to one that
builds communities. In developing Asia, these organisational hybrids are receiving more

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attention as the region faces a development conundrum. We have seen tremendous growth in the
past decade – Asia accounts for a quarter of the global GDP. However, many pockets of the
region continue to struggle with high levels of poverty, unemployment and inequality.

In Southeast Asia, the Philippines included, the youth bulge potentially can bring demographic
dividends but can also spell disaster if the young cannot find economic opportunities. Add to that
the presence of fragility in this part of the world where human needs go unsatisfied and threats to
stability become a barrier to prosperity and human development. Social enterprise can fill the
gap and be the vehicle for inclusive growth.
● social enterprises are empowering women through employment and leadership of social
enterprises
● young people are becoming active in the sector particularly in the newer startups
● social enterprises are creating new pathways to better livelihoods and supporting
inclusive growth
● of the 34 per cent growth in jobs in the Philippine economy, it is estimated that 5 per cent
come from social enterprises
● in terms of sectors, social enterprises are mostly in agriculture. This support is welcome
and critical to alleviate the conditions of our farmers, producers and cooperatives. Some
sectors have very little representation such as fisheries, energy, housing and justice and
rehabilitation
● Social enterprise activity in the Philippines is taking off – the number of social enterprise
start-ups has more than tripled in the last decade alone.

IV. CHAPTER SUMMARY

Entrepreneurship portrays a significant role in economic development not just on the
national level but within the global economy, as one of its most important aspects is to create
opportunities for employment affecting local societies in a most positive way. Social
entrepreneurship is all about recognizing the social problems and achieving a social change by
employing entrepreneurial principles, processes and operations. It is all about making a research
to completely define a particular social problem and then organizing, creating and managing a
social venture to attain the desired change. The change may or may not include a thorough
elimination of a social problem. It may be a lifetime process focusing on the improvement of the
existing circumstances. Social entrepreneurship is all about recognizing the social problems and
achieving a social change by employing entrepreneurial principles, processes and operations. It is
all about making a research to completely define a particular social problem and then organizing,
creating and managing a social venture to attain the desired change. The change may or may not
include a thorough elimination of a social problem. It may be a lifetime process focusing on the
improvement of the existing circumstances.

V. REFERENCES

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● https://www.ipl.org/essay/Impact-Of-Entrepreneurship-In-The-Philippines-
FK8XU74AJFR
● https://studymoose.com/entrepreneurship-in-the-philippines-essay
● https://www.socialenterprise.org.uk/international-reports/the-state-of-social-enterprise-in-
the-philippines/
● https://www.britishcouncil.ph/programmes/society/magazine/reaching-the-farthest-first
● https://aseanup.com/social-entrepreneurship-in-the-philippines/
● https://www.philstar.com/lifestyle/the-budgetarian/2021/10/13/2133637/social-
entrepreneurship-philippines
● https://generationt.asia/leaders/social-entrepreneurs-philippines
● https://asiasociety.org/new-york/social-entrepreneurship-philippine-experience
● https://www.esquiremag.ph/the-good-life/mavericks/25-social-entrepreneurs-changing-
the-philippines-a1934-20170803-lfrm3
● https://madmonkeyhostels.com/h2o_blog/social-enterprises-philippines-10-fantastic-
enterprises-2016-2/

Submitted by:
DE CASTRO, JENG JENG H.
CASABAL, ALYSSA JOYCE
BULANHAGUI, JORGE G.
DE OCAMPO, VHIA BIANCA
MAGDAMIT, ANGELICA M.