Tapping OFW Money for Community Development

Social entrepreneur aims for profit and social impact, Coconut farmers in Brgy.Sto. Nino in San Pablo City, Laguna used to sell their produce for only P1 to P2 per piece to traders. Having abandoned copra making after prices plummeted in the world market and lacking the technical expertise to develop other uses for the coconuts, they were forced to sell their harvest at a cheap price.

The slow economy also forced many residents there to migrate to the urban areas or find work abroad. But things are changing.

Sometime this year, an upstart enterprise, the Coco Natur Overseas Filipinos and Producers Cooperative, entered the playing field and forged an agreement with the coconut farmers' organization there.

Instead of selling their produce at bargain prices, why don't the farmers find other uses for their coconuts, say, by producing virgin coconut oil (VCO) or coco vinegar?

Through the Pederayson ng Magsasaka at Magniniyog ng San Pablo, Coco Natur entered into a memorandum of agreement with the coconut growers. Under the deal, Coco Natur will train farmers on how to process VCO and provide them with the equipment for its production. In exchange, the farmers will sell the VCO to Coco Natur at P110 per liter.

Since 15 to 20 coconuts are needed to produce one liter of VCO, the value of the coconuts essentially would increase to P5 per piece. This represents more than double the amount they used to sell their harvest to wholesalers.

Not for Profit Alone

Most entrepreneurs would probably frown upon such business plan since it would jack up cost of production but Coco Natur is not merely for the potential profit alone.

"We also look at the social impact of the project," says Estrella "Mai" Dizon-Anonuevo, project proponent and Coco Natur board member. "It is also about empowering the community."

Anonuevo says it took three years before the project was launched. It followed technical working group discussions with the San Pablo Chamber of Commerce, the Department of Trade and Industry, the Department of Science and Technology and the local government.

It is a project she developed after finishing her master's degree in entrepreneurship for social development enterprises in 2003 at the Asian Institute of Management.

Unlike other business plans, however, this taps overseas Filipino workers as investors.

The scheme may not be new or unique, but it is one of the few where it makes a direct impact on a community.

Social Cost of Filipino Diaspora

For her effort to empower the community, Anonuevo can be described as belonging to the emerging group of social entrepreneurs in the country. Loosely defined, a social entrepreneur is one who identifies and provides solutions to a social problem by using business as an engine. Others simply describe it as "business with a cause."

Anonuevo was a student activist during her college days at the University of the Philippines. In between joining street protests, she finished her nursing degree in 1986. Filipino nurses at that time were beginning to be in demand abroad and half of her classmates easily found work outside the country.

Anonuevo joined the exodus of her classmates but not as a nurse. She found work in Germany at the Frankfurt Institute for Women Research. In the institute, she dealt with migrant women and helped craft social programs for them.

In 1994, she returned home and joined the Atikha Overseas Workers and Communities Initiative, a non-government organization providing intervention and assistance to families of OFWs. There, she got immersed in the myriad difficulties and challenges that await OFWs who have returned home.

Having stayed in Germany with her husband and children, Anonuevo said her family did not experience the sad realities that families of other OFWs confront. Yes, she has heard of sob stories, but did not really realize the magnitude of the social costs of migration.

One of the negative effects of overseas labor migration is the breakdown of family ties and emotional bond among family members. Away from home during the formative years of their children, the parents eventually become "strangers" in their family.

"One mother felt she was like a cabinet in her own home. She had no emotional bond with her children. They see her not as a mother but as a source of remittance," Anonuevo said.

Spending Spree

The values of the children change and they become materialistic. As the income of the family increases, with the father or the mother or both working abroad, so does their spending pattern. "Once they come home, they splurge. They spend like there was no tomorrow," Anonuevo said.

Once their earnings have been wiped out, they again opt to find work abroad, to sustain the family's newfound standard of living. This triggers a vicious cycle.

Anonuevo said that most OFWs intended to work abroad for a short time, but end up staying there for several years because the money is squandered by family members. In a survey conducted among domestic helpers in Hong Kong, 80 percent said they planned to work there for only two years but had to stay put for few more years because of mounting domestic obligation.

Adding woes to the OFW plight is the lack of "savings consciousness" among OFW families. "They see no need to save or invest thinking money is easy."

Investing Remittances

Spending their most productive years outside the country, the returning OFW finds himself or herself not only alienated from his or her family but also doubtful of their self-worth. Most could not find work here, which in the first place, prompted them to find jobs abroad. They normally have no savings or investments.

Apparently, they’re not better off. "It is one of the ironies of labor migration. You leave because you want to provide something better for your family. But what happens when you come home? You have a broken family and no savings for the future," Anonuevo explained.

Anonuevo observed that many programs, including that of Atikha's, are trying to address the family aspect of migration, but only a few tackle the economic aspect. Thus, when she became executive director of Atikha three years ago, she decided to broaden Atikha’s programs.

She said that for a social program to be successful, it should be holistic in its approach, something that she learned when she worked in Germany. In focus group discussions with government representatives and stakeholders, it was found out that many OFWs want to invest their earnings. At the same time however, they are cautious in taking a gamble with their hard earned money.

In a trip to San Francisco City, California, Anonuevo pitched to Filipino residents there that she planned to put up a social enterprise where OFWs can invest their money. It is an investment aimed not only at helping OFWs, but it would also have an impact on the community. The response was encouraging. From a dinner-benefit, she was able to raise P600,000 as seed fund for her project.

Since coconut-based products are growing in popularity and considering the many uses of its raw materials, it was decided that the investment target coconut farmers. Coco Natur was formed to act as the investment arm of Atikha.

Triple Bottom Line

Coco Natur started its community-based enterprise in Sta. Isabel town in Laguna for the processing of VCO and soon enough, another plant was set up in Sto. Nino town for the production of coco-vinegar and coco-based aromatherapy products.

Anonuevo said Coco Natur as a social enterprise operates on the principle of a triple bottomline: it should be profitable for sustainability; it should benefit the stakeholders (the OFWs and the coconut farmers) and it should not harm the environment.

This principle was applied when Coco Natur signed the MOA with the San Pablo coconut farmers composed of 500 members. Aside from targeting higher income for farmers for their produce and the employment that was generated (employees are hired to do the processing for VCO and its other derivatives), a social component was included.

In the MOA, San Pablo coconut farmers are obliged to plant 600 coconut seedlings every year. Aside from ensuring the sustainability of the project, this has a long-term impact on the coconut industry and the environment as well, Anonuevo said. She calls this the social return on investment.

As for profitability, Anonuevo said Coco Natur products are gaining ground in the local market and marketing may soon expand overseas. She says the Italian market has expressed keen interest on Coco Natur products and negotiations are ongoing for commercial marketing there.

So far, she says 30 OFWs are now major investors in the social venture. In a sense, they are not only investors but partners in community development.

By Aries Rufo of News Break