5 Lessons on Building Social Enterprises in the Philippines


Social entrepreneurship is gaining ground in the Philippines. According to one estimate, social enterprises already benefit 4.7 million people per year. I’ve been working to develop programs that support social entrepreneurship in the Philippines for about fifteen months now. It’s been an amazing journey so far learning about the economy, people, and culture. As I continue my work with our partner, the University of San Carlos, and we prepare to launch our second iteration of these programs, it seems like the right time to reflect on what I’ve learned so far.

Here are my 5 lessons on supporting social entrepreneurship in the Philippines:

1. Island geography matters. The Philippine archipelago is comprised of 7,600 islands. Among those only 2,000 are inhabitable, but that is still a huge number. The island geography reinforces strong local communities and regional identities, with social entrepreneurs targeting familiar local problems. Living in these communities, entrepreneurs are well-equipped to understand and create solutions to address local challenges. On the other hand, entrepreneurs deeply embedded in local communities may face challenges thinking about and preparing for scale, which is necessary to increase their impact. The unique geography also lends itself to agriculture, fishing, tourism, and natural disasters (among other things), that suggest unmistakable opportunities for those looking to make a positive impact.

2. Social entrepreneurs need to think bigger.  There is no shortage of talent, ideas, or passion to improve people’s lives in the Philippines. Everywhere I’ve been, entrepreneurs are there, tackling important and challenging problems. What’s harder to find are those who are willing to think big. There’s no Silicon Valley ethos within the Philippine’s (yet), so big ideas and risk taking aren’t typical features of the culture. Though that is definitely changing. More higher education institutions are instilling entrepreneurial thinking in students, more accelerators are supporting startups, the economy is growing at over 6% per year, and younger socially-minded entrepreneurs are realizing the opportunity to reach beyond their local communities.

3. Most social enterprises are not “investment ready.” This isn’t unique to the Philippines. Practically every entrepreneur I’ve worked with insists they need funding, and many do. Yet most aren’t prepared to receive funding. What’s needed? A realistic growth plan, a financial forecast, an understanding of the types of capital and best uses for each type, an understanding of what returns an investor expects and the ability to articulate what returns your investors will receive, and clarity about how the capital will be used. At Miller Center we refer to this as the “Justifiable Ask,” and developing one is a critical step before raising capital. Even with a compelling justifiable ask, many social enterprises are just too small to effectively absorb the available capital, which currently trends toward larger deal sizes.

4. Impact investors don’t (yet) support early-stage social enterprises. There is so much hype around impact investing that you’d expect investors to be pouring capital into the ecosystem to support fledgling social enterprises. That’s not exactly the reality. While large amounts of investment capital are flowing into the Philippines, the vast majority of it comes from Development Finance Institutions (DFIs) and is focused on large-scale microfinance, infrastructure, and energy projects -with average deal sizes over $50 million (see the Landscape for Impact Investing in Southeast Asia report). Private impact investors deployed $107 million over 54 deals between 2010-2017, with a trend toward larger ticket sizes. This has left a gap in funding, often referred to as “the missing middle.” More local angel investors and philanthropic organizations are needed to provide risk-tolerant grants and capital in deal sizes ranging from $50,000 and $500,000.

5. We need more local champions.  The promise of social enterprises across the Philippines can be seen in the stories of Hapinoy, Rags2Riches, Fishers and Changemakers, Regenesys BPO, Gawad Kalinga, ANTHILL, Coffee for Peace, Bagosphere, Human Nature, and Mad Travel (four of which are GSBI alumni). These pioneering enterprises are visible examples of what is possible, and they are an inspiration for the next generation of entrepreneurs. But we need more of them. We need more local success stories which become the aspirational role models for budding entrepreneurs and build buzz and confidence among investors.

Social enterprises in the Philippines are growing, and a supportive ecosystem is developing to help fledgling social enterprises thrive. It’s amazing to be part of it.  If you are a part of this community of entrepreneurs, investors, mentors, NGOs, and educators -or would like to join it- please contact me. We can get farther, faster together.

Miller Center for Social Entrepreneurship and the University of San Carlos in Cebu are launching the next GSBI accelerator programs in September 2019. Find out more about the upcoming USC GSBI accelerator or apply now.