Big business groups pledge P1.3B to finance livelihood dev’t projects

The country’s biggest business groups pledged yesterday more than P1.3 billion to finance projects and activities relating to livelihood and employment generation, a big leap from the P286 million given by the corporate sector for poverty alleviation in 1999.

Among the organizations that gave this commitment to President Arroyo are the League of Corporate Foundation, the Employers Confederation of the Philippines, Federation of Filipino-Chinese Chambers of Commerce and Industry, Makati Business Club, Philippine Chamber of Commerce and Industry, Philexport, Philippine Business for Social Progress, Management Association of the Philippines, Finex, Filipino Chinese Business Club, Bankers Association of the Philippines, and the Women’s Business Council of the Philippines.

The commitment was given on the second-day in a three-day Asian forum on corporate social responsibility where the President reiterated her administration’s thrust towards job generation and poverty alleviation.

LCF chairperson Aurora Tolentino, also executive director of Ayala Foundation, explained that for the last five years, around 67 percent of corporate giving went to human development projects. "But this time around, the tide is more in favor of livelihood and employment, which I believe is the industry’s response to the call of the President for more private sector participation in this aspect," she said.

During her speech at the opening of the forum, former President Corazon Aquino noted that while there had been examples of corporate giving for the alleviation of poverty here in the country, citing the efforts of the PBSP which was established by local CEOs in the late 60s, these have never been enough and that there is still much room for improvement.

She cited a survey on corporate giving in the Philippines conducted by the Ramon V. del Rosario Sr. AIM Center for Corporate Responsibility which showed that in 1999, the total giving by 122 companies was P268 million.

In terms of coverage, 76 percent of the assistance given by the 63 company respondents went to the National Capital Region, while the Autonomous Region for Muslim Mindanao where underdevelopment and poverty were aggravated by armed conflict, received only three percent.

"Then again, the corporate business sector cannot be alone in the effort. The task should continue to be the concern of both government and business – government by creating the climate for business to flourish, and business by sharing the tools for the creation of wealth in our people," Mrs. Aquino noted.

For his part, conference chairman Ramon R. del Rosario Jr. pointed out that in the aftermath of the Asian financial crisis, the region’s pace in addressing the problem of poverty has considerably slowed. "In the meantime, the demands of a growing population and the pressing need to satisfy very basic human requirements are crying for immediate attention. If we rely on the trickle down effect and if economic growth remains anemic, social tensions will rise to a boiling point and we may soon be overtaken by events," he said.

Del Rosario added that while he does not imply that business necessarily has the main responsibility to solve this problem, the fact that the social challenges in the region are very grave and must be addressed as matters of extreme urgency and priority and that business does have a significant role to play.

Meanwhile, Philippine Long Distance Telephone Co. (PLDT) president and chief executive officer Manuel V. Pangilinan noted that the lessons of Enron and WorldCom demonstrate that business practices guided by compliance-based, legally driven codes, which characterize regulatory regimes in the US and Europe, are themselves insufficient to protect a company.

"In addition, the effectiveness of market self-regulation must now be called into question. It is becoming evident that regulatory oversight needs to be tightened and value-based and ethically consistent programs that give boards and managers a level of ethical understanding must be developed. Both these actions should enable managers to make the right decisions, even in the most trying of circumstances," he said.

Pangilinan, who is also PBSP chairperson, also noted that companies with good governance depend on four key elements: protecting and enhancing the rights of all shareholders, constituting an effective board of directors, competent and ethical management, and accurate and timely disclosures.

He said market confidence in a company is influenced by the extent to which the board is active and participative and by the manner in which it looks after the interest of all shareholders. "Once elected to the board, directors are vested with fiduciary responsibilities to the corporation as a whole. They are elected to use their best judgment for the company’s welfare, which judgment in turn must be independent and unfettered by specific interests," Pangilinan explained.