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Dominic Barton, co-author of Dangerous Markets: Managing in Financial Crises and director and managing partner of McKinsey & Company, said that financial crises are not as unpredictable as believed to be and chief executives must be constantly aware of such threats.

Barton recently spoke before senior executives and members of the Makati Business Club and the Banking Association of the Philippines to share successful strategies in managing companies during a financial crisis.

According to Barton, global players such as Johnson & Johnson, Citigroup, Unilever, Lafarge, and GE Capital have the benefit of a diverse financial net but domestic companies are no less capable of turnaround success. He mentioned “local champions” in companies that recognized the opportunity for change in times of crises. These include Banco Itau in Brazil, Ramayana in Indonesia, Kookmin Bank in Korea, the Ayala Group in the Philippines, Alfa Bank and Roust in Russia, and the North Carolina National Bank (now BankAmerica) in the USA.

The key is in leaders that have the vision, strategy, courage and operational and financial capabilities to minimize the costs of crises and recognize opportunities for growth.

“Through a combination of insightful understanding of the environment in which they operate, winning strategies, and the ability to seize major discontinuities, these companies ended up winning significant market share and successfully expanding into new business lines in the wake of financial crises,” observed Barton.

Barton referred to Ayala Corporation’s visionary management for using the 1998 Asian financial crisis to transform itself from a property developer to a diversified conglomerate with key investments in telecommunication and financial services as well as property. It was during the crisis that Ayala convinced partner Singapore Telecom to continue investing in Globe Telecom digital wireless business, allowing Globe to establish itself as “the top wireless company in the Philippines.

Another Ayala-owned company, the Bank of the Philippines Islands, used cash reserves and leverage afforded by its parent to acquire competitor Far East Bank & Trust Company. As profits in the banking industry declined sharply, BPI emerged as the second-largest bank in the country.

Explained Jaime Augusto Zobel de Ayala, president and CEO of Ayala Corporation in an earlier McKinsey interview:“We are a 165-year old company accustomed to being prepared and taking advantage of crises. That is why we have survived and thrived.

Corporate Philippines seems to be taking its social responsibility seriously.

While more and more companies are taking up the cudgels to address various social issues, some companies are bringing corporate philanthropy a step further by making corporate social responsibility an integral part of their business strategy.

Today, business leaders themselves express their companies’ commitment to social development in their core business principles and practices. These leaders set the strategic direction of their companies’ corporate social responsibility, often by creating foundations or a special division dedicated to improving their relationship with key stakeholders.

Recently, chief executive officers and senior corporate executives from several countries indicated their support of good corporate citizenship by holding dialogues at the first Asian Forum on Corporate Social Responsibility. Leaders of organizations such as the Makati Business Club, Philippine Business for Social Progress, and the League of Corporate Foundations celebrated Corporate Social Responsibility Week last July by getting their members to launch various social projects.

This renewed interest in corporate social responsibility has led companies to look for creative and innovative ways to do good not only in their areas of expertise. Projects like Habitat for Humanity, Tabang Mindanaw and Children’s Hour have involved different, sometimes competing, companies for a common cause even if their businesses are not directly related to these issues.

Poverty reduction
Moreover, companies choose to support or develop projects that bring sustainable development. Pilipinas Shell provides skills training and financial grants to enhance entrepreneurship in local communities. Its Malampaya Project aims to reduce the dependence of the country on imported fuels by tapping energy from deep-sea gases. Meanwhile, Metrobank Foundation offers scholarships and grants for college students training to become teachers, engineers, and nurses. The foundation also has programs in other key areas such as health services, visual arts, and environment.

The active involvement of the private sector in social development has led the government to open opportunities for businesses to extend their projects nationwide. The government recently invited members of the business community to help develop urban and rural communities through its poverty alleviation program, Kapit-Bisig Laban sa Kahirapan or KALAHI.

Beyond providing one-time donations of funds and services, KALAHI allows businesses to come together to create greater impact on the community. In one case, several Ayala-owned companies recently adopted an urban poor community in Mandaluyong City which KALAHI identified as a critical area. By pooling their resources and expertise, these companies increased their capability to address the various needs of the residents.

For instance, Ayala Land and Globe Telecom, each with community development projects of their own, have pledged to conduct yearlong medical and dental missions in the barangay. Ayala’s utilities arm, Manila Water Company, is providing legal water connection and constructing a small sewerage treatment plant. The Bank of the Philippine Islands and Ayala Foundation, Inc. (AFI) brought their experience in micro-financing and entrepreneurship training and contributed to a revolving livelihood fund for families. The group also donated a computer laboratory to a local high school, with Globe providing free Internet access and AFI a training program for teachers.

Explained AFI president Victoria P. Garchitorena: “Social responsibility projects are part of the Ayala business. We recognize the role of the private sector to work hand in hand with government to help uplift the lives of Filipinos. We realize that business is there not only to increase its value for its stakeholders but also to give back to its community.”

Improving brand equity
But do businesses gain anything for being good corporate citizens? Yes, and no. Various studies show that corporate social responsibility will only affect the bottom-line if it is part of a clear business strategy. After all, the first contribution of businesses to national development is by being good, responsible businesses.

At the World Economic Forum early this year, an Arthur D. Little study showed that companies that take corporate citizenship seriously not only improve brand equity and operational efficiency. They are also more likely to be seen as a good investment and company of choice by investors, employees, customers, regulators and joint venture partners. Another study by two Harvard professors revealed that “stakeholder-balanced” companies enjoy better financial returns through good corporate reputation.

“Corporate citizenship fosters public good,” added Pedro Roxas, president of Central Azucarera de Don Pedro and a member of the board of trustees of Philippine Business for Social Progress, at the Asian Forum on Corporate Social Responsibility. He also cited ways that corporate citizenship can directly benefit businesses such as good corporate reputation, reduced risks, access to human and intellectual capital, and a favorable business environment.

Also speaking at the Asian Forum, Garchitorena said that good investments in society will redound to the good of the company albeit in an indirect manner. For instance, investments in education mean a better pool of future employees and investments in micro-credit mean greater consumer base to sell one’s products to. In the long-term, investments in housing or health can bring about less discontent and therefore more peace and order, which brings about economic and political stability so that businesses can better flourish.

 As emphasis on business accountability and transparency grows, firms that meet society’s expectations are favored over those that fail in corporate citizenship. By working closely with government, host communities, civil society, and other businesses in addressing social issues, local companies acknowledge that business success is intertwined with their commitment to bring economic, social and environmental value to society.

Business, government, civic, and church leaders are once again coming together in support of children’s causes as they relaunched on Aug. 14 the Philippines’ participation in Children’s Hour, a fund-raising campaign to call attention to the needs of youth and children.

This is not the first time that leaders of various sectors are throwing their support behind Children’s Hour. The program, which began in the United Kingdom and participated by 20 countries, was launched in the Philippines in 1999. Numerous individuals, government officials, and about 400 corporations helped raised close to P40 million, indicating a high level of social consciousness across sectors. It has since been hailed as one of the most successful in the world in terms of donations gathered and the variety of marketing programs.

This year, Children’s Hour is inviting business leaders to be CEO champions who will make it a regular vehicle for raising funds for children in their companies. Children’s Hour works on a simple mechanism that encourages individuals and companies to donate one hour’s worth of earnings for the benefit of children’s causes.

The funds are being invested in carefully selected projects addressing child abuse and deprivation as well as health care and education programs. Locally, Children’s Hour has helped over 88,000 Filipino children and youth through hospitals and organizations that provide preventive and rehabilitative services, temporary shelter, feeding and nutrition programs and education.

Former president Corazon C. Aquino, honorary chair, joined the leaders of various sectors in the relaunch activities of Children’s Hour on Aug. 14 at the Glorietta Activity Center in Ayala Center, Makati.

Observed Aquino: “We are a nation that recognizes the immense power of the youth. These socially aware and socially active people will in the future take positions of responsibility in government, private sector, and civil society. We must continue to take an active role in providing them the opportunity to achieve their full potential.”

Leaders from business, media, government and the church have responded to Aquino’s initiative by being part of the Children’s Hour steering committee this year. These include Jaime Augusto Zobel de Ayala as chair, Gina Lopez as vice-chair, Emily Abrera, Corazon Alma de Leon, Ramon R. del Rosario, Renato S. de Villa, Carlos Dominguez, Susana A.S. Madrigal, Narcisa L. Escaler, Bob D. Gothong. Other members are Patricia B. Licuanan, Guillermo M. Luz, Justo A. Ortiz, Marianne G. Quebral, Ma. Alexandra Prieto-Romualdez, Pedro E. Roxas, Bienvenido A. Tan Jr., and Bishop Socrates Villegas.

At a press conference hosted by the Children’s Hour steering committee, business and civil society leaders took the opportunity to get to know some of the beneficiaries of Children’s Hour. The children sang a special number for the guests, who in turn spent a few minutes with the kids as they created artworks and read storybooks. Zobel hoped to replicate the success of the Children’s Hour campaign in 1999 by inviting more business leaders to champion the cause. Said Zobel: “We wish to build on the wellspring of generosity to relaunch the Children’s Hour to give them once again an opportunity to champion the cause of children among their employees and company executives. We can then advocate among other companies to come and join us in this campaign to save our children from illiteracy, homelessness, hunger and abuse.”

Out-of-school youth in under-served communities will now be given the opportunity to hone their skills in information technology and use their knowledge to help improve their lives.

In a joint effort to help alleviate poverty through information technology, Ayala Corporation and Mitsubishi Corporation launched the country’s first Internet Learning Kiosk (iLinK) facility at ERDA Tech, a vocational secondary school in Pandacan, Manila, on July 9. Ayala Corporation executive managing director Fernando Zobel de Ayala and Mitsubishi Corporation general manager on environmental and social responsibility Gen Kagayama joined ERDA Tech president Fr. Pierre Tritz, project partners, students, and community beneficiaries to celebrate the event.

The iLinK project aims to develop the ICT competencies of Filipinos, especially those who cannot afford access to these technologies. Explained Zobel: “With the iLinK project, we hope to make the power of information technology available to many so that it can be harnessed and used as a positive catalyst for change. Students and other members of this community gain the ability to make a difference for themselves and their families.”

President Gloria Macapagal-Arroyo, who witnessed the signing of the memorandum of understanding on iLinK between Zobel and Mitsubishi Corporation chairman Minoru Makihara in Japan last year, had expressed her gratitude for the support to the government’s policies and programs in information and communications technology (ICT).

Joint social responsibility project
iLinK is part of the continuing partnership that Ayala Corporation and Mitsubishi Corporation are undertaking to improve education for the poor. The two companies previously worked together for the CISCO Networking Academy Program at the Laguna College of Arts and Trades and facilitated the donation of the Japanese government for the La Mesa Reforestation Project. Ayala Corporation and Mitsubishi Corporation have been strategic partners for the past 28 years and have taken collaborative efforts in pursuing growth opportunities.

Said Kagayama: “I sincerely hope that this project will make a worthy contribution towards serving the ICT needs of the students at ERDA Tech and the neighboring community as well. I firmly believe in the great potential of the Philippines to become an active participant in the New ICT Economy.”

Aside from providing an Internet laboratory to select public high schools, iLinK will help build the schools’ capacity to provide quality ICT training not only to its students and teachers but also to under-served sectors of the local community. iLinK will train out-of-school youth, unemployed adults, small entrepreneurs, cooperatives, farmers and fisherfolk in the use of technologies relevant to their needs.

Over 400 students, teachers and out-of-school youth have benefited from the iLinK facility at ERDA Tech since it opened in December 2001. In April, iLinK began training and assisting in the employment of former streetchildren and community youth under the school’s PALIHAN (Palitan ng Husay at Sanayan) Project.

At the launch, a visibly pleased Fr. Tritz expressed his gratitude for the donation. He observed: “The objectives of iLinK are very much in line with ERDA Tech’s vision of becoming a center of innovative and quality education for socially disadvantaged youth. ERDA Tech is truly blessed to be a partner of this project.”

Technical programs
The iLinK project is further enhanced through partnerships. Globe Telecom is providing ERDA Tech free Internet access through Globenet for one year. iLinK will also implement technical programs initiated by AFI with partner schools and companies such as the Cisco Networking Academy Program, Center for Technical Training Excellence, and e-Skills Training.

Other components of the iLinK project include curriculum development, financial assistance, a directory of educational websites, and acquisition or development of friendly software for cooperatives and farmers’ groups.

Meanwhile, another iLinK facility has been established at Florencio Urot Memorial National High School, a day and night school in Cebu City. Three more iLinK facilities will be set up in Cagayan de Oro City, Metro Manila, and Batangas this year.

In recent years, corporate social responsibility has become a catch phrase in a private sector eager to prove that business success and social gain need not be mutually exclusive.

But in order to create real and lasting impact, Ayala Corporation president and chief executive officer Jaime Augusto Zobel de Ayala II believes that businesses must focus on addressing the root causes of social problems. Moreover, businesses must be able to sustain their social development programs and develop new strategies to meet new demands and changes in society.

“This emphasis on developing a commitment to national development and building trust in our community has been one of the hallmarks of Ayala’s success over the years. While we strive to create enduring value for our shareholders, we never lose sight of the interests of all the other stakeholders in our businesses and of the nation as a whole,” explains Zobel.

Contribution to nation-building
The Ayala Group welcomes President Gloria Macapagal-Arroyo’s challenge to the private sector to improve the plight of under-served sectors, something the group has been doing for more than four decades. This commitment is expressed through programs that are focused on four main areas: education, youth, the environment, and arts and culture.

Says Zobel: “More and more we are finding that it is important to support projects that the business can relate to, either because they affect a market of that business or because the company is in a position to offer solutions to the problem.”

The group believes that the basic educational system plays a critical role in the country’s progress, a principle that finds fruition in the Center of Excellence in Public Elementary Education. Centex provides bright children from needy families with top-quality education through an enhanced curriculum, supplemental feeding and family support and counseling. Other education-oriented programs have been developed to provide access to information technology, scholarships and awards for academic excellence.

The focus on the youth sector is also founded on the belief that the country’s future lies in the hands of good leaders. To address the need for principled leadership, the Ayala Young Leaders Congress brings together potential leaders from among today’s youth and encourages them to make a difference in their communities. The Bank of the Philippine Islands and Globe Telecom offers annual awards that recognize academic excellence in science and information and communications technology. These programs nurture in the youth the desire and capability to lead the country in progress.

Still another way that the Ayala Group is contributing to the country’s development is by addressing its many environmental concerns. Ayala Land Inc.’s solid waste management program has effectively reduced pollution in its residential, commercial and industrial projects. Manila Water Company’s Tubig Para Sa Barangay Project is providing clean, potable water to meet the needs of Metro Manila’s urban poor. Ayala companies are giving financial support and promoting awareness of environmental issues so that future generations can continue to tap the country’s rich natural resources.

In arts and culture, the Ayala Group created the Ayala Museum and the Filipinas Heritage Library as repositories of the country’s national heritage. Located in the heart of Makati’s central business district, these institutions are bringing Filipino art and history closer to the public.

Sustainability
The Ayala Group is able to continue these social responsibility programs even in times of economic uncertainty by providing resources, technical services and volunteer time of its employees and officers.

For instance, Ayala Corporation, Globe Telecom, Ayala Land, and BPI put together their resources and expertise for projects such as the UP Ayala Technopark, Youth Tech, Center for Technical Training and Excellence, Ayala Intel Computer Clubhouse, and the Integrated Learning Kiosk.

Corporate citizenship is also encouraged at all levels of the organization. New hires are invited to imbibe core values which put a premium on concern for others and commitment to national development. Thousands of employees from companies such as Ayala Corporation, Ayala Land, Globe Telecom, BPI, Manila Water, and Integrated Microelectronics Inc. have repeatedly participated in Habitat for Humanity, Children’s Hour, NAMFREL, and the La Mesa Reforestation Project, programs that have been selected for their sustainability and long term impact to society.

This spirit of volunteerism has led to the creation of the Ayala Volunteers Program for employees looking for opportunities to help others as well as the Ayala Business Club which leads Ayala companies in identifying the needs of their host communities and developing programs that respond to these needs.

Long-term commitment
While these programs have succeeded in making an impact on the lives of many Filipinos, the Ayala Group continues to look for new ways to address the needs of under-served sectors in society.

The Ayala Volunteers Program will soon get the involvement of business and non-business partners, customers, beneficiaries, and the general public in social development projects identified by the Ayala Group.

Ayala Foundation Inc. has also ventured into tapping Filipinos abroad who wish to help their countrymen by establishing Ayala Foundation USA (AFI-USA). AFI-USA will serve as a conduit for funds from migrant Filipinos for projects that will be funded in the country. Meanwhile, the Filipinas Heritage Library continues to develop various culture-oriented websites that link the academe, art community, and Filipinos all over the world. A bigger, world-class Ayala Museum is set to reinvigorate the local art scene as well as the business district when it opens in 2004.

Corporate social responsibility is always a long-term social commitment but Zobel believes the Ayala Group’s success can become an example for others. He is optimistic that more companies will take up the challenge to alleviate poverty and bring progress to all Filipinos.

Notes Zobel: “Our vision is that all companies should look at themselves as productive members of the community and of society. We should continue to build trust across a wide spectrum of publics by trying to keep the interests of the broader community in mind as we make decisions. We strongly believe in the value of good corporate citizenship and try to become a catalyst for social change in any way we can.”

The country’s future lies in the hands of leaders who will put the interests of their fellowmen before their own.

This is the belief that drives the Ayala Group’s flagship programs for youth development, the Center of Excellence in Public Elementary Education (Centex) and the Ayala Young Leaders Congress (AYLC), and Globe Telecom’s Academic Achievement Awards. These programs nurture leadership qualities among today’s youth in the hopes of producing principled leaders who have the skills and motivation to make a difference.

Says Victoria P. Garchitorena, president of Ayala Foundation Inc., the social development arm of the Ayala Group of Companies: ” We are convinced that it is our investment in the youth that will propel our country toward sustained development.”

Leaders as servants
Together with Ayala Land, Inc., Globe Telecom, and other donors, Ayala Foundation established Centex in Tondo, Manila and Bauan, Batangas with the aim to raise future leaders from among the less privileged by providing quality education. Moreover, the Centex curriculum encourages these young children to be critical thinkers, servant leaders and nurturers of the environment.

The program has already shown encouraging results. Centex students have consistently performed well in inter-school examinations and competitions, proving that children from impoverished families can perform at par with their private school counterparts given the proper education and motivation.

The Ayala Young Leaders Congress gathers the most promising college student leaders for a three-day live-in conference designed to nurture the youth’s commitment to integrity and principled leadership, foster their nationalism and idealism, and encourage them to become faithful stewards of their country’s future.

Nearly 300 students from all over the country have been part of AYLC since 1999. AYLC encourages these young leaders to develop bonds with their peers to help them remain faithful to their vision when they assume positions of responsibility in government, the private sector, or in civil society. Some AYLC alumni have gone on to lead local and international foundations and organizations that are committed to uplifting the lives of Filipinos and fellow youth. Others have been recognized for their academic achievements and their contributions to the community.

Academic excellence
The Globe Telecom Academic Achievement Awards (GTAAA), now on its 7th year, recognizes excellence in high school science and math, electronics and communications engineering, and electrical engineering. The annual industry-academe linkage program is Globe Telecom’s contribution to nation-building by promoting telecommunications and information technology.

With support from partners Ericsson, Nokia, Tomen Telecom and other leading IT and telecommunications companies, the GTAAA has recognized 106 high school and 94 college students for academic excellence. This year’s awards challenged them to lead the Philippines in a rapidly-evolving, technology-driven world.

Explains Globe Telecom president Gerardo C. Ablaza, Jr: “We are ever mindful of our responsibility not only to provide telecommunications services to the Filipino people but also to contribute to improving the lives of our countrymen.”

One hour may be all it takes to make a difference in the lives of millions of Filipino youth.

Following its successful millennium campaign in 1999, Children’s Hour will once again appeal to every working individual and company to make a donation for the benefit of abused and disadvantaged children. The Ayala Group through its social development arm, Ayala Foundation, Inc., is set to launch the 2002 campaign for the Children’s Hour in August.

Children’s Hour works on the premise that a tremendous impact can be made if every working individual and company donate at least an hour’s worth of their earnings.

In 1999, the Children’s Hour Millennium Fund raised a total of P40 million and benefited nearly 100,000 children and youth through organizations such as the Bantay Bata 163, Child Protection Unit of the Philippine General Hospital, Tabang Mindanaw, International Deaf Education Association, and Tuloy sa Don Bosco Street Children Project. Beneficiaries of the campaign are involved in rehabilitation and prevention of child abuse, educational programs, shelter, feeding programs, and health and medical services.

This year, Children’s Hour steering committee chairman and Ayala Corporation president and CEO Jaime Augusto Zobel de Ayala II is inviting other business leaders to champion the cause of the Filipino child through the continued participation of their companies and employees. The 2002 campaign hopes to repeat the success of the Millennium Fund, nearly half of which was contributed by employees through salary deduction. With the commitment of such organizations, companies, and individuals, Children’s Hour will be able to sustain meaningful programs

At the crack of dawn, Aling Ising Valdez begins her morning by strapping two empty containers on her shoulders before leaving the small house she shares with husband Rommel and their four children. She negotiates a steep and narrow path leading to the main road. She must do this fast before her husband and children wake up in time for their morning bath and breakfast. Upon reaching the road, Aling Ising walks a small distance and carefully places her two containers at the end of a long queue of other pails, jugs and basins waiting their turn to be filled with water.

Later, she hands over a ten peso bill to the man supplying the water and then straps the heavy containers to her shoulders to bring back home. This is all she can carry. She must return later and line up again.

“Mahirap talaga, pero kailangang gawin kasi wala kaming pang-inom at pangpaligo. Mahirap na sa katawan, magastos pa kasi malaki ang kinakain sa budget namin (It’s hard work but it needs to be done so we can have water to drink and bathe in. Its physically painful, and eats up a big slice of the family budget),” Aling Ising sighs in dismay.

Water is scarce along the eight-kilometer West Bank of the Manggahan Floodway along the Pasig River. Thousands of residents can only get water from a few sellers who source water from their deep wells and then sell the precious liquid at high rates.

Fortunately, there’s hope for urban poor residents like Aling Ising and her family.

Together with the informal settler communities in its East Zone concession area, Manila Water Company created the Tubig Para sa Barangay program to improve the quality of life in these communities. The program was initially conceived in 1998 to deliver water services to government social priority areas within the East Zone.

Now nearing its 4th year, Tubig Para sa Barangay exemplifies the efficiency and innovation that private business can bring to public service. Since the privatization of the Metropolitan Waterworks and Sewerage System (MWSS), the program has provided properly connected water services to thousands of less fortunate city dwellers in Quezon City, Marikina, Mandaluyong, San Juan, Pasig, Makati, Taguig, Pateros, San Andres and Sta. Ana in Manila. It has eliminated leaks and illegal connections in these areas and as a result improved not only water services but also public health through proper sanitation and hygiene.

Manila Water president Antonino Aquino believes that Tubig Para sa Barangay is also freeing up vital income opportunities in these communities. “The program will help transform the East’s informal settler areas into productive and self-sufficient communities that contribute to nation-building,” says Aquino.

In response to President Gloria Macapagal-Arroyo’s appeal to the private sector on poverty alleviation, Manila Water launched at least six major projects under Tubig Para Sa Barangay. These projects have been providing clean, affordable water to some 300,000 individuals in more than 100 communities. The biggest project, the P120-million Manggahan Floodway Water Supply Project, was inaugurated by Pres. Arroyo in September 2001. When completed, it will supply over 15 million liters of water a day to more than 200,000 residents of informal settler communities along the stretch of the canal.

Meanwhile, the West Bank of the Manggahan Floodway has been given a new life. Its 9,000 families can now draw inexpensive, potable water from their own household taps. Gone are the days of lining up to buy prohibitively priced and non-potable water from ambulant vendors or relying on unsafe connections tapped clandestinely to the utility’s mainlines.

According to Aquino, the company’s core commitment to customers like Aling Ising is to make water available to as many households as possible via safe and affordable service connections. Beyond meeting its service obligation targets, Manila Water aims to supply the metropolis’ growing demand.

“Tubig Para sa Barangay will help us realize this commitment much faster,” says Aquino.

They are called “micro-entrepreneurs.”

They are small market vendors, owners of sari-sari stores and small bakeries, tricycle drivers and they are changing the quality of their lives through micro-financing.

BPI Foundation, the social responsibility arm of the Bank of the Philippine Islands, has been helping these individuals achieve the dreams for the past 12 years. A pioneer in micro-financing, BPI Foundation provides a credit line for non-government organizations and cooperatives that seek to uplift the lives of Filipinos in need.

The foundation’s micro-financing program called Financing Assistance Line (FAL) began in 1989 with a breakthrough partnership with Tulay sa Pag-unlad, Inc., now known as the TSPI Development Corporation. BPI Foundation initially provided the non-profit grassroots organization a P0.5 million credit line. With this support, TSPI successfully implemented programs that allow the poor to start small businesses to meet their family’s needs.

Today, TSPI is considered a leading organizer of small and micro enterprise development. TSPI now has 47,000 active clients, most of whom obtain an average of P5,000 to start up micro businesses such as market stalls, small groceries, and dressmaking shops.

Thousands more have since benefited from BPI Foundation’s micro-finance program, proving that the poor are credit-worthy given the right mechanisms in place. For instance, TSPI’s credit line with BPI Foundation now stands at P4.0 million and has over P15 million total loan exposure at the Bank of the Philippine Islands. Its loan programs record a high repayment of 98.7 percent, even higher than commercial banks.

BPI Foundation has developed several strategies to ensure the success of micro-financing. These include targeting a large number of borrowers and using group lending and group guarantees. It also established sound credit policies as well as checks & balances that are strictly observed. Through BPI’s prudent credit management, FAL has released P55 million in loans to over 2,000 micro to small enterprises via 14 NGOs and cooperatives.

Observes BPI Foundation executive director Veronica Tapia-Merk: “BPI Foundation has proven that micro-finance is applicable in the Philippines in helping the people in their struggle to break out of the cycle of poverty. Today, our commitment to social responsibility remains steadfast as ever.”

Thanks to the pioneering efforts of NGOs such as BPI Foundation and TSPI Development Corporation, micro-finance models are now widely accepted as an effective tool in getting more and more Filipinos out of poverty

At the crack of dawn, Aling Ising Valdez begins her morning by strapping two empty containers on her shoulders before leaving the small house she shares with husband Rommel and their four children. She negotiates a steep and narrow path leading to the main road. She must do this fast before her husband and children wake up in time for their morning bath and breakfast. Upon reaching the road, Aling Ising walks a small distance and carefully places her two containers at the end of a long queue of other pails, jugs and basins waiting their turn to be filled with water.

Later, she hands over a ten peso bill to the man supplying the water and then straps the heavy containers to her shoulders to bring back home. This is all she can carry. She must return later and line up again.

“Mahirap talaga, pero kailangang gawin kasi wala kaming pang-inom at pangpaligo. Mahirap na sa katawan, magastos pa kasi malaki ang kinakain sa budget namin (It’s hard work but it needs to be done so we can have water to drink and bathe in. Its physically painful, and eats up a big slice of the family budget),” Aling Ising sighs in dismay.

Water is scarce along the eight-kilometer West Bank of the Manggahan Floodway along the Pasig River. Thousands of residents can only get water from a few sellers who source water from their deep wells and then sell the precious liquid at high rates.

Fortunately, there’s hope for urban poor residents like Aling Ising and her family.

Together with the informal settler communities in its East Zone concession area, Manila Water Company created the Tubig Para sa Barangay program to improve the quality of life in these communities. The program was initially conceived in 1998 to deliver water services to government social priority areas within the East Zone.

Now nearing its 4th year, Tubig Para sa Barangay exemplifies the efficiency and innovation that private business can bring to public service. Since the privatization of the Metropolitan Waterworks and Sewerage System (MWSS), the program has provided properly connected water services to thousands of less fortunate city dwellers in Quezon City, Marikina, Mandaluyong, San Juan, Pasig, Makati, Taguig, Pateros, San Andres and Sta. Ana in Manila. It has eliminated leaks and illegal connections in these areas and as a result improved not only water services but also public health through proper sanitation and hygiene.

Manila Water president Antonino Aquino believes that Tubig Para sa Barangay is also freeing up vital income opportunities in these communities. “The program will help transform the East’s informal settler areas into productive and self-sufficient communities that contribute to nation-building,” says Aquino.

In response to President Gloria Macapagal-Arroyo’s appeal to the private sector on poverty alleviation, Manila Water launched at least six major projects under Tubig Para Sa Barangay. These projects have been providing clean, affordable water to some 300,000 individuals in more than 100 communities. The biggest project, the P120-million Manggahan Floodway Water Supply Project, was inaugurated by Pres. Arroyo in September 2001. When completed, it will supply over 15 million liters of water a day to more than 200,000 residents of informal settler communities along the stretch of the canal.

Meanwhile, the West Bank of the Manggahan Floodway has been given a new life. Its 9,000 families can now draw inexpensive, potable water from their own household taps. Gone are the days of lining up to buy prohibitively priced and non-potable water from ambulant vendors or relying on unsafe connections tapped clandestinely to the utility’s mainlines.

According to Aquino, the company’s core commitment to customers like Aling Ising is to make water available to as many households as possible via safe and affordable service connections. Beyond meeting its service obligation targets, Manila Water aims to supply the metropolis’ growing demand.

“Tubig Para sa Barangay will help us realize this commitment much faster,” says Aquino.