ADB sees more inclusive business prospects in PH

The number and value of so-called “inclusive businesses” in the Philippines where investors can pour money into are expected to expand by 10 times in the next 10 years, according to the Asian Development Bank (ADB).

The Manila-based multilateral lender defines inclusive businesses as those that “provide innovative solutions to create relevant goods and services for the low-income segment of society and are the direct contribution of the private sector to make growth more inclusive.”

The ADB said more investments in inclusive businesses would result in less poverty as well as better living standards for the poor.

At present, the inclusive business market in the country is still small.

“An ADB study on the inclusive business market in the Philippines showed that the country has about one million small and medium enterprises, about 600 large companies, and 20,000 social enterprises, cooperatives and nongovernment organizations, but [there were] only about 100 inclusive business models, 15 of which are investable,” it noted.

The ADB nonetheless sees a jump in inclusive business opportunities here, especially in the agribusiness, education, health and housing sectors.

“ADB estimates that the number of investable inclusive business deals in the Philippines will rise from five in 2015 to up to a total of 50 in 2025. Investment size is estimated to expand from $94 million to

$940 million,” it said.

The social enterprise boom in the country is also seen facilitating growth in inclusive business investments.

“Currently, there are 40 for-profit social enterprises considered as commercially viable in the Philippines. In 2025, up to 150 will be investment-ready. Investment in inclusive business-ready social enterprises is expected to grow from $20 million to $76 million,” the ADB said.

An ADB study in 2013 titled “The Inclusive Business Market in the Philippines” said inclusive businesses “offer an opportunity for the private sector to contribute toward inclusive growth, and to create new commercial value” in the country.

The study cited that “although the government has embraced the mantra of ‘inclusive growth,’ it has not yet led to a marked improvement in the reduction of poverty by more job generation and better services delivery to the poor and low income people,” as poverty rate as of 2013 was at 27.8 percent of the national poverty line, with up to 63 percent living on less than $3 per day, it said.