Corporate Social Responsibility in the Philippines

Skyline of Makati, the Philippines' main financial district.

Ricardo Pascua is a leading businessman and corporate philanthropist in the Philippines. Based in Manila, Mr. Pascua is currently the president and CEO of the Fort Bonifacio Development Corporation. Mr. Pascua is a trustee of Philippine Business for Social Progress (PBSP),which is actively engaged in peace and development issues in Mindanao.

In an exclusive interview with the Asia Society, Mr. Pascua discusses the kind of work PBSP has been engaged in, the idea of "corporate citizenship", and how business can influence policymaking.

What kind of work does the Philippine Business for Social Progress (PBSP) do in Mindanao? How long has this organization been working in the region and what have been the effects of this work?

PBSP was established in 1970 as the senior Philippine business community’s response to the widespread poverty that was prevalent at the time. Poverty is still prevalent today, which is why PBSP has not stopped working and has in fact grown (although probably not proportionally to the poverty it tries to help alleviate). This organization allows senior businesses and senior businessmen to dedicate time and financial resources to contribute to the alleviation of poverty.

Mindanao is a fairly recent focus for PBSP. This focus came about largely due to the personal interests of a couple of senior ex-government and business people. Two of our trustees are intimately interested in contributing something to the resolution of the conflict in Mindanao. One used to be the presidential advisor for Mindanao in President Ramos’s administration who has married into a business family (the Alcantara’s, who have extensive cement, power, and timber interests in Mindanao). The other is Luis Lorenzo III, of La Panday Holdings, Inc., who now owns the Delmonte plantation and cannery operation in Mindanao. The conflicts are happening in their business backyard and they want, in the tradition of PBSP, to contribute to the alleviation of the problem; Mindanao has become a big focus for PBSP because it is a national concern.

How is it that the PBSP promotes development in the area? How is it that you define development?

There is a generically defined [UNDP] Human Development Index (HDI), which is our benchmark (the HDI measures, among other things, literacy, access to certain basic resources, empowerment, etc.). The HDI seems to be a good measure of development. It is beyond just material well-being; it has to do with being literate, consuming nutritious food, being able to contribute to discussions on local government, all of these are measured in the HDI.

Of course, to attain this, wealth has to exist. Market economists theorize that only the private sector really creates wealth; all other sectors of society participate in the consumption of wealth, but the creation of wealth happens in the private economic arena.

PBSP, through its member companies, participates in the creation of wealth. PBSP is a non-profit organization which channels resources, time, money and materials that are solicited from its member companies and elsewhere, for programs that are targeted to help people help themselves. We are not into dole outs; that is not the point. The point is to get people to stand up for themselves and therefore gain for themselves a significant level of human dignity. If you do not work for yourself, if you do not rely on yourself for your own survival, you are deprived of your dignity as a human being and you are less effective as a contributor to democratic society.

What is the Center for Corporate Citizenship? Is it the case that this branch of the PBSP is concerned primarily with promoting peace and reconciliation in the workplace, that is with labor relations?

The Center for Corporate Citizenship tries to engage our member companies’ interest in broadening participation in social development efforts by getting them to participate in programs that interest them or that PBSP might be running.

My company, for example, Fort Bonifacio Development Corporation, has been engaged with PBSP in doing social development work in our immediate neighborhood. Fort Bonifacio Development is a real estate company; we are building a city, but I do not want my company to exist as an island of prosperity in a sea of poverty. So I have a significant interest in contributing to the development of my immediate environs. Not only is this altruistically good - it makes me feel good as a Christian - but there is also a business motive behind it.

You very seldom do something with a single motivation; things that you do very often have multiple objectives that are not incompatible with each other but are synergistically supportive of each other. When I do good as a corporation, it assuages my Christian conscience; it is also good business. If I contribute to the development of my immediate neighborhood, criminality goes down. My employees can come to work with peace of mind and I have access to a better labor pool.

It has been suggested elsewhere that all this talk of corporate citizenship amounts to no more than an advertising campaign for business; that businesses are not genuinely interested in issues of citizenship and civic responsibility but make token gestures such as this to ward off any possible criticism (Exxon’s latest self-representation as an “environmentally friendly” company would be a case in point). Could you comment on this?

That kind of criticism probably stems from a lack of appreciation of human motivation. Of course it’s good business to be a good corporate citizen but at the same time the people who run the business are human beings, who have humane motivations. They could be Christians, they could be Jews, they could be Muslims, but all are responding to perhaps a higher religious calling, or even if they don’t believe in any higher divine power, they are human beings. So corporate citizens respond to multiple motivations that may be satisfiable by a single action. While it may be true that corporations find it is good business to be good corporate citizens, you cannot take it away from them that they are also being motivated by some altruistic impulses; both are true, they need not be in conflict.

There is a widely held assumption that insurgencies such as the one in the Philippines are really the result of an incomplete process of modernization. Could you comment on this?

I have not thought about it that way. My view is that people rebel because of perceived injustice; if you have been dealt with badly or you have been rubbed the wrong way somehow, this will create anger in you. This anger stems from not being treated in a way proper to your dignity as a human being, proper to your dignity as somebody saved by the blood of Christ (according to my religious convictions); sometimes the expression of anger takes very unsound, violent and destructive forms. Sometimes however that self-saving justice creates a response that produces sound, even saintly, actions. So the root cause of many of the rebellions, I would think, is reaction to perceived or real injustice as committed against the person, or class of persons, that the insurgent represents.

It has been argued extensively elsewhere that development policies as they are currently constituted in much of the Third World cannot but amplify people’s increasingly besieged sense of identity, thus creating the conditions for identity-based conflict (ethnic, sectarian, religious, etc.). Do you think that the kind of development policies implemented by the post-colonial state in the Philippines may have exacerbated relations between Muslims and Christians in Mindanao?

They could have, but the Muslim rebellion against central authority predates the independent Philippine government. It existed against the Americans, against General Pershing, who had the Colt .45 automatic pistol invented precisely to stop a Moro Juramentado running after his own personal or clan enemies; the .45 was invented to stop the guy in his tracks.

Before that the Spaniards were never able to pacify the Muslims…

Well the Spaniards were never really able to colonize the Muslims. The South was never colonized by the Spaniards, isn’t that correct?

Not as effectively; they were never really totally conquered, which is why they never had their faith changed. One of the responses of the government of the 1950s to the communist rebellion of that time was to give many of them land in Mindanao once they were pacified. Immigration from Luzon, from the Christian areas of Mindanao, was encouraged so a lot of people went to Mindanao and land was either deeded over to them or purchased by them.

One of the problems were differences in mindset as to how land is owned among the Lumads (the indigenous peoples) and also perhaps in certain Muslim societies. Land is not supposed to be alienable; land is supposed to be communal property that the current Datu, or chief of the area, only has stewardship over. The chief is supposed to make sure that the community, in its entirety, benefits from the produce of the land; he does not have ownership rights the way Roman law or Anglo-Saxon law understood land rights.

However, our constitution was part-Spanish, part-American, where Roman law is antecedent of how land ownership is understood, which was true in the Christian areas of the Philippines. Transposed to Mindanao, some Sultans, or headmen, or Datus, were persuaded to alienate land. The government also owned a lot of land because when the Philippines became independent, if there was no deed to prove ownership on the basis of ancestral rights, the state became the default proprietor. Government began deeding away land creating overlap of ownership; one deriving from traditional understanding of how land is to be owned, and the other deriving from a juridical understanding of how land is to be owned. This is a source of conflict that needs to be resolved.

A law was recently passed recognizing ancestral rights by indigenous peoples over certain pieces of land but that’s still being rolled out in its implementation. This probably belatedly recognizes traditional concepts of ownership over land that were ignored at the onset of Philippine independence.

Isn’t it also the case that the government provided more services and opportunities to the new Christian migrants in Mindanao than they did to the indigenous Muslims? In fact the Muslims had access to fewer services from the State following independence than they had previously.

This is a complaint of many people who are less paid attention to by the central government. It made sense for the colonizers to centralize political power in Manila. In order to get access to central government services or largesse, you had to elect representatives who were skilled in drawing resources over to your region. Recent statistics of budgetary allocations for the ARMM (Autonomous Region of Muslim Mindanao) show that significant resources were allocated to them, much higher in some cases than other poorer provinces. The question is whether such resources were effectively used on the ground. It is also true that there did exist and there does exist corruption at the local level in the Muslim areas. It is probably true, for example, that many of the resources allocated to ARMM went to personnel services: to employing my cousin, my cousin-in-law, etc., which left very little money for building roads and dams and water wells…the monies were spent instead on salaries and buying cars and jeeps. It’s very difficult to give a simplistic explanation for a very complex situation. If I were to try to make simplistic statements, I would likely be more wrong than right.

How do you think business can assist the State in coming up with more socially and ethically responsible and equitable policies in traditionally underdeveloped parts of the country, like Mindanao?

Business has a significant influence on policymaking. The recent change in government in the Philippines was initiated by, among others, businessmen. I was in the streets in late December, early January of this year. I was on record before TV cameras calling for the resignation of the President and his entire cabinet, reading a statement of the Management Association of the Philippines, together with a dozen other business associations. I would have been in a lot of trouble if Estrada had not stepped down.

President Gloria Arroyo was the constitutional successor of Estrada. She happens to be very popular with the business community because she speaks the same language, she’s a trained economist, she has a PhD in economics, has taught economics, was a bureaucrat, was a senator and has a very good head on her shoulders; she is also a very tough lady.

So business, in advocating policies, can help government. Business, in actually undertaking responsibilities normally outside of what narrow-minded businessmen might consider its purview, would be helping the government. Strictly speaking, doing PBSP work is outside the profit-making activities of a business organization, but in the broader context of a business existing as a citizen of society, it is not outside the purview of a businessman to be involved in making sure that the context within which he does business has sound foundations.

My customer is a human being, my employee is a human being, my supplier is a human being, and why do we exist? It is for the betterment of the human person. Anything we do that does not contribute to the betterment of the human person is of questionable value. For business to legitimately, it exist has to have a contribution to the betterment of the human person.

Does PBSP have a sense of what sorts of policies it would try to get the government to enact? Do they have a sense of what the government should be doing in this area, how it is that they will work with government or advise the government?

PBSP is not an advocacy organization. There are other business organizations that do that; the Management Association of the Philippines (MAP), for example, is an advocacy organization. We have a National Issues Committee that looks at concerns of the day, like the theme of MAP this term is good governance because that was the cry of the heart of the Filipino people who toppled Joseph Estrada. That is one of the four policy underpinnings of the Arroyo government. Its principal objective is winning the war against poverty in this decade and one of the ways she intends to do this is by governing in a transparent and effective manner and doing that through leadership by example.

Businessmen’s contribution to that effort would be to support that and I believe that our continuing commitment to having a market system operate in the country would go the farthest way in alleviating poverty. Not robbing responsibility and accountability from the individual citizen is the best way to get him to contribute to his own betterment. That’s why I don’t believe in communism, socialism, I don’t believe in anything that shackles the individual’s freedom of choice. However market systems do select out those who cannot compete, but they also are people. So somehow this has to be tempered by a legitimate role of government and business. Those who cannot compete fully in a market system must also be taken care of.

Interview conducted by Nermeen Shaikh of the Asia Society.