Corporate Social Initiatives in the Philippines: Experiences of Four Major Corporations

By Habaradas, Raymund B. | Journal of Legal, Ethical and Regulatory Issues, July 2013 | Go to article overview

Corporate Social Initiatives in the Philippines: Experiences of Four Major Corporations


Habaradas, Raymund B., Journal of Legal, Ethical and Regulatory Issues


INTRODUCTION

Noted CSR scholar Archie Carroll (1991) says that businesses have four responsibilities: economic, legal, ethical, and discretionary (or philanthropic). While society might expect businesses to fulfill all of these responsibilities simultaneously, companies have historically placed an initial emphasis on their economic responsibilities, followed by their legal responsibilities, and only later, their ethical and discretionary responsibilities.

Recent studies show that companies facing concerns along economic, legal, or ethical dimensions are more likely to allocate their resources toward addressing these concerns before engaging in philanthropic activities. Nobel Prize winner Milton Friedman's (1970) contention that social spending by business comes at the expense of profitability seems to hold a decade into the 21st century. This validates Carroll's (1991) observation that most companies still saw philanthropy as "icing on the cake."

In a developing country like the Philippines, corporate philanthropy is often seen as a way to augment the government's efforts to address pressing social problems such as poverty, joblessness, homelessness, and hunger (Habaradas, 2011a).

Going by the internationally-accepted definitions of poverty, the Philippines still has a long way to go to match the records of its neighbors Malaysia and Thailand, which have practically eradicated extreme poverty (i.e. percentage of the population living on less than $1.25 per day). Even Indonesia and Vietnam have done better than the Philippines in this regard (see Table 1).

Not surprisingly, a substantial number of Filipinos have suffered from involuntary hunger. A survey conducted by the Social Weather Station (SWS) on March 19-22, 2010 revealed the proportion of families that experienced involuntary hunger at least once the past three months was 21.2%, or an estimated 4.0 million households. This was far above the 19982010 average of 13.4% (SWS, 2010, as cited in Habaradas, 2012). That the unemployment and underemployment rates have remained fairly constant over the past five years (see Table 2), even as the population continued to grow, has probably aggravated the situation.

Clearly, the sustained economic growth registered by the Philippines over the past decade, which accelerated to 7.9% in the first semester of 2010, has yet to trickle down to the masses (Habaradas, 2012). The situation in the Philippines brings to mind the rather colorful quotation attributed to multi-awarded American screen and stage actress Rosalind Russell: "Life is a banquet, and most poor suckers are starving to death."

CORPORATE CITIZENS' TO THE RESCUE

"So massive and pervasive is poverty in our country that our response to it cannot be small". This is according to Tony Meloto (2009), who received the Magsaysay Award for Community Leadership in 2006 for his work as founder and primary mover of Gawad Kalinga, a Philippine-based NGO that has mobilized "a massive army of volunteers who are working together in bayanihan (cooperation) to bring about change and to restore the dignity of the poorest of the poor" (Gawad Kalinga, 2009).

To win the battle against poverty, various sectors, including business, government, academe, and NGOs must contribute their share. Big Business, in particular, is expected to take an active role by exercising corporate social responsibility, especially in the form of corporate philanthropy. "With poverty as a major social pressure point," according to Roman (2007), "government capacity to deliver social equity is stretched, and business is called upon to 'take up the slack.'"

This position is supported by Teehankee (2007), who presents a compelling case on the inherent responsibility of corporations to contribute to social development. He argued that since corporations are allowed to exist only by virtue of a 'social license' granted by society through the government, they are "not simply an instrument of private property that can be used for the private interests of shareholders at the expense of other stakeholders and society as a whole. …

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