All in the same boat

One of the first things President Junior should have done when he took office was to summon the top taipan to a meeting at the palace. There aren’t more than a hundred that really matter.

Junior should explain to the Taipans what he meant when he chose Unity as his campaign theme: he needs everyone to help solve the country’s problems.

A report by Forbes said the Philippines’ 50 richest families and individuals enjoyed a “vigorous recovery” as their collective wealth jumped 30% to $79 billion (3.94 trillion pesos) even as that the pandemic was continuing.

That’s because the economy did pretty well and, as usual, there was no fallout. This is why quoting GDP growth rates is a misleading measure of a population’s quality of life.

President Junior should remind big families that the biggest conglomerates they own must do more or we will all sink together. Rich and poor, we are all in the same boat.

The concept of corporate social responsibility or CSR as we know it is not enough, it never was. Conglomerates must integrate their social responsibility activities into the business model of their companies. Otherwise, it is symbolic and useless.

Some will say that their responsibility is to their shareholders and it’s about making as much money as possible. Then they will say their responsibility is just to pay taxes and the government should be responsible for everything else.

Probably true. But if we all wait for the government to do even some of the most necessary things, we will end up losing more. And it will show in the bottom line.

Consider the case of the Tullahan River which flows through the northern limits of Metro Manila. It has been heavily polluted and is causing destructive floods that affect businesses in Malabon, Valenzuela and surrounding areas.

The flood affected the operations of the Polo brewery in San Miguel, even causing closures during the worst floods. The solution is obvious and cannot wait.

So San Miguel has allocated one billion pesos a year to clean up the 27 kilometer Tullahan River system. SMC even acquired additional new equipment to double its solid waste extraction capacity to 5,000 metric tons per day.

The Tullahan River System is rated no. 4 in the list of the 10 most plastic-emitting rivers in the world, responsible for the plastic pollution of the oceans in the world. Its cleanup by San Miguel reached a milestone: 414,000 tons of solid waste removed.

“In addition to removing the silt and solid waste that has accumulated on the river bottom for years, we also need to increase the depth to a maximum of five meters, especially in areas where heavy flooding occurs. There are still many areas that have become too shallow due to waste dumped in the river, with only a meter or two of depth remaining,” said Ramon S. Ang of SMC.

The government could not have cleaned up the river as efficiently and as quickly as San Miguel did. Most likely, someone colluding with the authorities would have made money pretending to clean it up…like all those DPWH flood control projects that never had flood control. In any case, the DENR, the agency responsible for cleaning up the rivers, took care of creating a dolomite beach.

What’s in it for San Miguel? They no longer have to shut down operations at their brewery and it has earned them goodwill in their community, which also no longer has to endure the usual flooding.

That’s a billion pesos a year well spent…even though the assurance of the brewery’s continued operations probably brought them more than that.

There are other things Taipans can do to directly help people improve their quality of life. They have a name for it in business schools: inclusive business.

Romy Neri, former AIM professor and NEDA secretary, listed what could be done: the first is to involve the poor by providing them with affordable goods and services; provide decent income and work opportunities; integrate the poor into the commercial value chain as producers, entrepreneurs, distributors, retailers or franchisees.

I had written about the Jollibee farmers’ commitment to planting potatoes, helping with the technical side of growing good quality potatoes, and then securing the market and price.

Nestlé has this long-standing program to help coffee and cocoa producers improve the quality of their products. Nestlé also guarantees that they will buy anything that meets the standards. Given their international reach, Nestlé should expand beyond the requirements of our domestic market.

Micro, small and medium enterprises represent 99.5% of Philippine businesses. MSMEs contributed 35.7% of total value added or gross domestic product in 2018. MSMEs generated 5.7 million jobs, or 63.2% of total employment in 2018.

Most MSMEs struggle with family operations. They need help to evolve: to design products, to source raw materials, to achieve quality production and distribution.

All major retailers have resources that can help. They can also help small producers by avoiding tying up their scarce capital in “consignment” agreements that take months to collect.

Microfinance is a great need not only in agricultural enterprises, but also in cottage industries. With the use of technology, large banks can create subsidiaries that will focus on microfinance. BPI’s BangKo seems to be on the right track.

Then there is housing. NHA has long been useless. There has to be a way for the big real estate companies to help out. People have to live close to where the work is and they don’t have to own the house. Affordable rentals should be fine.

Construction and manufacturing companies should have vigorous apprenticeship programs in coordination with high schools. Labor laws may need to be changed to allow this.

There are so many other things taipans can do to make things better. Extremely wealthy people have most of their wealth tied to businesses here that can be lost in a flash if people’s patience runs out.

We need unity. The rich need to realize that we are all in this together. We go down together if things don’t work out.

Boo Chanco’s email address is [email protected]. follow me on twitter @boochanco.

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