Work for ‘inclusive growth,’ Zobel urges firms

Invest in initiatives that help low-income groups

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Tycoon Jaime Augusto Zobel de Ayala has urged private enterprises to join the bandwagon on “inclusive growth,” saying business initiatives that help address inequality in the country can be profitable.

In fact, he said that enterprises that would not take into account the lowest-income groups in their business models would eventually lose out in the market competition.

In a forum on Monday organized by the Asian Development Bank, Ayala said the responsibility of making the benefits of economic growth more equitable did not lie on the government alone, but the private sector as well. While the state was in charge of providing an enabling regulatory environment, he said private firms should take the lead role in investing in initiatives that help achieve inclusive growth.

Inclusive growth, which has become a buzz phrase among economists, is a favorable situation wherein a growing economy is actually helping lift people out of poverty.

The Philippines is believed to be suffering from “non-inclusive growth” because its poverty incidence has remained high even as the economy has grown by a respectable 5 percent over the past decade.

In the case of Ayala Corp., Zobel said the company has changed its business model to one that provided benefits to low-income groups and included them in the target market.

For instance, he said Bank of the Philippine Islands and Globe Telecom have created a unit called “Globe BanKo,” which provides financial services to low-income individuals and micro-enterprises. These services are delivered with the aid of mobile phones.

He added that Ayala Land Inc. recently came up with housing projects that catered to low-income groups while another unit, Manila Water, has been conducting community-development projects.

Given the significant proportion of Filipinos living below the poverty line (at about 26 percent in 2009, according to latest government data), Ayala said targeting the poor as a market and helping lift them out of poverty would boost corporate profit.

“If you operate in a market like that of the Philippines [where a significant portion of consumers are poor], it makes business sense to touch base with the low-income segment,” Zobel said during the forum.

Meantime, Economic Planning Secretary Arsenio Balisacan said infrastructure development was essential in helping achieve inclusive growth.

Balisacan expressed optimism that infrastructure projects under the Public-Private Partnership (PPP) program would help the Philippines catch up with its neighbors as far as infrastructure sophistication was concerned. Under the PPP, the government invites private firms to invest in public infrastructure.

The country’s chief economist admitted that the Philippines was about 20 years behind Indonesia and even more years behind Thailand and Malaysia as far as the level of infrastructure was concerned.

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  • Guest

    “The country’s chief economist admitted that the Philippines was about 20
    years behind Indonesia (…)”

    How bad must our infrastructure be when we are 20 years behind Indonesia? And Indonesia’s infrastructure is not even that good yet, either.
    anyways, Ayala can take care of that. No trust in the gov, anyway.

  • help_our_country

    Kudos to Mr.Zobel ! Lead the ways and we follow. Invest more to create more jobs.

  • http://profile.yahoo.com/AND7MQ5FERICDOIAUW56RYT45A tower_of_power

    HAHAHA … businesses are fleecing the buying public with high interest rates … maximized profits thru all sorts of schemes. Scam of all sort … avoiding payment of proper taxes …. smuggling etc … and you talk about INCLUSIVE GROWTH? WHAT AN INSULT!!!!

    • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

      the usual comment of those only waiting.. not working. 

  • carlcid

    Gee! Lead the way Mr. Zobel!

  • macmacus

    i think we should have a survey on how many people willing to work hard to earn a good money, and how many people are just waiting for the governments and private sectors to help them. i know many individuals who progress because they stop waiting and start working. im just wondering there are many jobs available in the market but the unemployment is still high. maybe because half of that is not looking. fyi call centers are accepting high school graduates.

  • Platypus09

    Am just surprised that most of us don’t talk about businesses or how to make money.

    It is appalling how most of us react more on politics and religious issues more than money or business stuff.

    It should be the other way around. We should be talking more about money or more family
    incomes than the other ones I mentioned.

    Refusal to talk about money or how to improve our own income could be our possible downfall as an emerging market or country.

    • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

      Agree. we are pre-occupied with Politics and Showbiz, neglecting the basic issue: MONEY. Only a handful of people talk about the economy or business. This is reflected with our stockmarket – with less than 1% of the population investing in it.

      • Iggy Ramirez

        In industrialized countries, there are 5 discovery channels and 10 bloomberg channels for every one entertainment channel.

        In the Philippines, there are 8 gossip programs for every 1 educational show.

      • Guest

        In several countries, only up to 10% of the people invest in stockmarket. (And investing a stockmarket takes a lot of risk, BTW. The financial crisis since 2008 showed that what you invested in stocks can immediately be in the hands of other people without chance of ever seeing it again.)

  • Platypus09

    This should have been done long time ago.

    Glad that Mr Zobel re-emphasized this again. Thanks.

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