Blueprint for the Development of Local Economies of Samar

Consortium for the Advancement and

Development of the Local Economies of Samar

(CANDLES)

Blueprint for the Blueprint for the Blueprint for the Blueprint for the Development of the Local Development of the Local Development of the Local Development of the Local Economies of SamarEconomies of SamarEconomies of SamarEconomies of Samar

The Challenge to Reduce Poverty and Turn Around the Local Economies of Samar

Prepared for CANDLES by: JAY BERTRAM T. LACSAMANA

Table of Contents

Introduction ........................................................................................................................................ii

Chapter 1 Blueprint Framework.......................................................................................................1

Capter 2 Samar, the Philippine Economy and Poverty.................................................................5

Macroeconomic Assessment ..................................................................................................................5

Sector Performance .................................................................................................................................10

Infrastructure, Establishments and Housing......................................................................................12

Agrarian Reform .......................................................................................................................................18

Chapter 3 Community and Household Assessment ..................................................................20

Spatial Characteristics of the Pilot Communities ..............................................................................20

Socioeconomic Assessment of the Surveyed Households ............................................................25

Households in the Pilot Communities: Findings and Insights........................................................28

Chapter 4 Local Governance .........................................................................................................29

Institutional Assessment of LGUs ........................................................................................................29

Specific SWOT Analysis Findings ...........................................................................................30

Institutional and Organizational Support to Local Governance from the Regional Level........31

Samar Local Economy Building and Local Governance .........................................................32

Chapter 5 Civil Society Organizations..........................................................................................33

Civil Society Organizations in Samar ...................................................................................................33

Conclusion.................................................................................................................................................35

Exploring Opportunities of Working Together ...................................................................................36

Chapter 6 Development Financing Institutions...........................................................................37

Major Characteristics of Financing Entities ..........................................................................................37

Specific SWOT Analysis Findings ..........................................................................................................38

Development Financing Entities: Findings and Insights....................................................................38

Chapter 7 Private Investments and Remittances........................................................................40

Small Private Investments in Northern and Eastern Samar...............................................................40

Investment Potential of Remittances......................................................................................................46

Chapter 8 Blueprint Specifications: Strategies & Interventions ...............................................49

Overall SWOT Results and Emerging Strategy Options ....................................................................49

Translating Strategies to Themes of Model Interventions .................................................................55

Chapter 9 Program and Project Ideas...........................................................................................63

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Introduction

his “blueprint” or development strategy and plan adopted by the Consortium for the Advancement and Development of the Local Economies of Samar (CANDLES), proffers a development path for the five pillars of the local economy in their march towards poverty reduction and sustainable local economic

development in the impoverished island of Samar. It contains overall situational analyses of the major stakeholders and development actors in Samar and how their interrelationships and interactions can be directed towards the common goal of reducing poverty and helping turn around the local economies of Samarnons. Development specifications and strategies proposed are essentially along the strengths, weaknesses, opportunities and threats characterizing the five pillars.

Using common development planning approaches, the development strategies and blueprint specifications formulated were based on the expert analysis of major trends found in its companion document, the Baseline Survey on the Major Elements of Local Economy Building in Identified Pilot Areas in Eastern and Northern Samar. In this compendium or source book, primary and secondary data gathered were on the following five pillars of the local economy:

1. The poor and the enterprising poor communities and households;

2. Local governance entities and their instrumentalities that have specific mandates on poverty reduction and local economic development;

3. Civil society and non-government organizations working along economic development and advocacy work;

4. Development financiers (public and private) and microfinance institutions; and

5. Private sector participation and the role of overseas Filipinos, particularly in re-directing their remittances to local economy building activities

The primary framework of analysis adopted in this study is the conceptual model used in Population and Development Planning’s (POPDEV) “Basic Framework for Analyzing Socio-economic and Demographic Interactions at the Household Level”, developed in 1993 by Dr. Alejandro Herrin of the UP School of Economics and popularized in the 1990s among development planners at the national, sector- and regional-local levels. The model, as shall be elaborated in the succeeding chapter, is appropriate for formulating “local” and/or “micro” development interventions, designing and focusing these among the target poor and entrepreneurial poor households and communities. The model supports the matching, convergence and/or re-alignment/re-designing of development interventions and efforts of the various development actors or the five pillars as they influence the poor household’s economic, investment/savings and enterprise decisions.

The baseline data, strategies and blueprint specifications greatly benefited too from the key analysis and established findings contained in various related development plans formulated for the area. These are the Regional Development Plan for Eastern Visayas Region and its complementary plans, particularly the Regional Physical Framework Plan; the Provincial Physical Framework Plans of the Samar provinces; the Provincial Development Plans; and where present, the Municipal Development Plans and Investment Programs.

This blueprint does not in anyway intend to pose as an alternative to existing plans of any entity. It supports and advocates the key features of other plans, researches or advocacies particularly for the benefit of the poor and entrepreneurial poor of Samar. It is a dynamic plan, a work-in-progress meant to guide

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iii

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CANDLES and its advocates in their quest to make a significant difference in the lives and well-being of Samarnons.

Notes on the Study’s Background and Scope

The baseline and this blueprint initially targeted to apply the survey and data gathering instruments to about nine municipalities in the whole Samar island or about 3 municipalities per province (Northern Samar, Eastern Samar and Western Samar). However, due to resource constraints encountered by CANDLES, the study scope was trimmed down to six pilot municipalities in Northern and Eastern Samar. This is without prejudice to the application of the blueprint to Western Samar.

The following are the identified study areas:

In the above areas, specific survey instruments administered to several respondents. These are:

1. Households (urban and rural, above the poverty line or “non-poor” and below the poverty live or “poor”);

2. Municipal local government units and the respective provincial government units (their development orientation, pro-poor plans, programs and projects, financial and technical capacities and capabilities, etc.);

iv

3. Non-government and civil society organizations working in the area or those that have stakes in Samar;

4. Development financing institutions and microfinance entities (their various portfolios and financing/lending/credit programs, etc.); and

5. Private sector and small investors (profile of businesses, business constraints and concerns in their areas, and the potential of overseas Filipinos’ remittances and investments).

The table below shows the detailed profile of the surveyed households. The survey establishes the baseline situation for the rural and urban households as well as those of the poor and non-poor households. (Note that the more accurate terms are actually “above the poverty threshold” and “below the poverty threshold”.) The baseline is for revisiting on the third year and on the sixth year of the implementation of CANDLES interventions to determine adjustments in the programs and track the initial gains and impacts of the interventions.

Number of Respondents / Head of Households

Surveyed Areas Urban Rural

Poor Non Poor Total Poor Non Poor Total

Eastern Samar 593 47 55 102 243 248 491

Borongan 330 21 22 43 144 143 287

Guiuan 225 24 29 53 83 89 172

Mercedes 38 2 4 6 16 16 32

Northern Samar 468 36 166 202 207 59 266

Lavezares 157 10 27 37 98 22 120

Mondragon 201 15 115 130 71 0 71

San Jose 110 11 24 35 38 37 75

TOTAL 1061 83 221 304 450 307 757

100% 8% 21% 29% 42% 29% 71%

Notes:

a. 95% confidence level at confidence interval of 4 (sampling range of 1 to 3%)

b. Annual per capita income threshold for Region 8 (Eastern Visayas) is P9,623 or P48,115 a year for a family of 5.

This was used to determine poor and non-poor respondents. Urban and rural annual per capita threshold is P9,969

and P9,562, respectively. [Source: NEDA Region 8, 2000]

c. Urban and rural barangays were determined using National Statistics Office criteria

d. Household survey was administered from undertaken from 8 February to 15 May 2005

The blueprint also benefited from the valuable insights from the spearheading individuals and organizations of CANDLES who are experienced development practitioners in their own fields of expertise. The assessments based on their interaction with the major Samar stakeholders from government like governors, members of congress, mayors, private investors and business and NGOs have, in one way or the other, found their way into the strategies and plan specifications. Lastly, the major and relevant development strategies cited in the regional, sector, provincial and local plans and investment programs served as major guideposts and thus significantly influenced the blueprint’s proposed development paths leading to poverty reduction and local economic development.

Chapter

1 Blueprint Framework

“Poor Households and the Enterprising Poor as the Focus of Poverty Reduction and Development Interventions”

he framework that is seen to address poverty through the development of the local economies stems from the contention that poverty reduction and local economies can happen from the bottom economic unit so long as development interventions are well-targeted, focused and well-coordinated

with the effects of other interventions. It argues, “Poverty cannot be eradicated solely with the influx of large-scale foreign investments and revitalization of export industries.” It avers that poverty “can be better addressed if the development starts at the bottom: from the local economies growing upward to the national economy”. To do so, “local economies on their own must be able to meet the requisites of production, employment and services to be self-reliant and self-sufficient.” Thus the character of this blueprint’s development outlook is one that is: (a) bottom–up, (b) micro-led (less on sector, and not macro-led), (c) emanating from households- or household-based microenterprises to the community, (d) less dependent on national government assistance but relies on local government and community/civil society assistance.

This development outlook has theoretical and practical basis. The Framework for Analyzing

Demographic and Socioeconomic Interactions at the Community and Household Level (developed by Dr. Alejandro Herrin, Training Module on Integrated Population and Development Planning, 1993), illustrates the relationship between households and the sources of change and factors (in and outside the community) that influence household decision-making (Figure 1).

Figure 1: Development Framework for Poverty Reduction & Local Economy Development

Sources of change/Development

InterventionsDevelopment policies and projects

Population size

and age-gender

composition

Agriculture and

Natural Resource

Base

Community

Household

-Physical

assets

-Human capital

-Size, age-

gendercomposition

of members

Structure of

markets and price

for factor inputs

and products

Physical, social

and economic

infrastructure

Social Structure

and

organization

Household

Decisions

-savings/

consumption

-investment in

physical

and human

capital

-labor utilization

-fertility

-migration

Basic Framework for Analyzing Socioeconomic and Demographic Interactions at the Household Level (Herrin, 1993)

Exogenous factors

T

2

The model above shows that household decisions are influenced primarily by the socio-economic and demographic characteristics and circumstances prevalent in the household (physical, human assets, size, and age-sex composition) and secondarily by the community and external environment. Basic household decisions -- to save or to consume, to invest in physical capital or in health and/or education of children – depend on the economic and demographic characteristics of households. Decisions on labor utilization (will both adults/spouses work, will the children work?), fertility decisions (how many children or what family size do they want?), shall they move to the city, Manila or seek overseas employment, are all formed by the presence/absence and/or strength/weaknesses of the cited socio-economic and demographic factors. Households are likewise the basic units forming the community or the local economy; they are all in one way or the other and simultaneously: (a) consumers (savers), (b) producers, (c) reproducers, and (d) movers. The predominant choices of households that form the community or local economy shape the economic and demographic decisions and characteristics of the community. The whole system still links to the total picture as the macro-economy and policies on the national economy impacts on the local economy and community.

Above framework is the model used in evaluating if public sector programs and projects (particularly those that address poverty) are effective in creating positive impact on the household and community levels. The framework will be the basic guide in building a more detailed framework or model of microfinance and micro-, small, medium-scale enterprise development, poverty reduction and the development of local economies. This study will build on the general interrelationships cited in Figure 1 and will move on in detailing the causal links between and among the pillars of the development of local economies as envisioned by CANDLES.

Figure 2: Linkages and Convergence of the Development Interventions the Five Pillars

Population size

and age-gender

composition

Agriculture and

Natural Resource

Base

Community

1. Household-

Entrepreneur

-Physical assets

-Human capital

-Size, age-gender

composition of

members

Structure of

markets and price

for factor inputs

and products

Physical, social

and economic

infrastructure

Social Structure

and

organization

Household/

Microenterprise

Decisions

-savings/

consumption

-investment in

physical

and human capital

-labor utilization

-fertility

-migration

Local Economy Development: Five Pillars and their interactions and interventions

5. Private investors/OCW remittances

Exogenous factors

2. Programs/ projects of Development Financiers/

MicrofinanceInstitutions

3. LGUsinterventions

4. Civil Society/NGOs interventions

Figure 2 above schematically establishes the linkages and convergence points of the five pillars of poverty reduction and local economy building. The main convergence point is the first pillar: poor households (who are in transition as household-entrepreneurs or “enterprising poor” to become a significant pillar or actor in local economy building). Poor households and the entrepreneurial poor are both objects of development interventions and, at a certain phase and level of success; they eventually become development models and impetus to poverty reduction and local economy building in the medium to long term.

As objects of development interventions, development practitioners recognizes that poor households or those whose incomes fail to meet the poverty threshold or poverty line, need to attain certain levels of social and

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economic empowerment through public entitlements before they could productively engage in higher-level economic and social development participation. There are certain prerequisites for the significant participation of the poor in the development process and these are access to basic needs like food, shelter, clothing, and public services like health care, formal and informal education, nutrition, potable water supply, irrigation and asset transfer/entitlements like land reform and agricultural inputs, technology and common service facilities.

The pervasiveness of extreme poverty in the Philippines, however, necessitates multi-faceted interventions if one were to transform them from subsistence living to one of sustainable income generation. This will require various interventions starting from welfare provision (minimum basic needs approach and asset transfer) to higher level and sustainable development interventions (capability building for enhancing/generating employment, increasing productivity and value-adding economic activities).

Figure 3 below illustrates the development path and phases aimed at addressing extreme poverty and at the same time instituting interventions among the segment of the poor who are ready to receive, access and, engage in higher-level interventions made available through the interventions of local governments, civil society, development financiers, and private investment streams. The poor and entrepreneurial are divided into three population segments. These are:

a. Poor households who are below, near and slightly above the poverty line whose mode of economic activity remains predominantly on a subsistence level and may be characterized by low socio-cultural, organizational, entrepreneurial maturity;

b. The “enterprising” poor households (above the poverty line but whose distance from the threshold is not yet secure due to proneness to economic cycles) who have attained a level of social/physical capacity, organizational maturity, and entrepreneurial skills to engage in higher-level economic production (in contrast to subsistence economy); and

c. The community entrepreneurs or the erstwhile poor or enterprising poor with household-based enterprises.

Figure 3: Development Phases and Transition Paths

1.b. Enterprising poor households

(sustainably above

poverty line)

-Physical assets-Human capital

-Size, age-gendercomposition of members

1.a. Poor households (below, near & just above poverty line)

-Physical assets-Human capital

-Size, age-gendercomposition of members

1. c++ Community

Entrepreneurs (employing the

subsistence poor

in1.a.)

-Physical assets

-Human capital-Size, age-gender

composition of members

5. Private

investors/OCW

remittances

2. Programs/

projects of

Development

Financiers/

Microfinance

Institutions

3. LGUs

interventions

4. Civil

Society/NGOs

interventions

• basic public & community services

• basic infra for poor& the entrepreneurs

• peace & order• etc.

Development Path and Phases

4

The poor households living below the poverty line are the targets of interventions mainly (but not exclusively) emanating from the local governance and civil society streams. The main theme is practically provision of welfare and public entitlements directed at outcome that will eventually to put them in a situation beyond subsistence and closer to the second sub-group, the enterprising poor. The enterprising poor, on the other hand, are the main target beneficiaries of sustainable poverty reduction and local economy development through enterprise development. All of the five sources of interventions will come into play and converge towards this population sub-group: local governance, civil society, development financiers, private sector/remittance investments of overseas Filipinos, and successful entrepreneurs (erstwhile poor) microenterprises willing to share their experience and models. Convergence among these actors towards the entrepreneurial poor households ensures that they focus on and harness the major strengths and opportunities open to the target beneficiaries in all sectors of economic activity: agriculture and fishery, agri-business, rural enterprises, commercial, service and industrial sectors. Therefore, by the use of the terms “entrepreneurial” or “enterprise development” the model does not limit itself to business, in the traditional sense of the term.

The outcome of the interventions for population sub-groups 1a and 1b, in a linear causation model, is 1c or the community entrepreneur. At this population sub-group and given a certain level of growth, sustainable, profit-generating and value-adding economic activities are attained and the enterprise operations are now employing the sub-group 1a, the subsistence poor. The framework also recognizes the reality that in certain localities, all three sub-groups may be present and co-existing. The mix varies from community to community: while the subsistence poor may predominantly populate some, the community may still have a handful of community entrepreneurs; other communities may have only a handful of subsistence poor, more of the enterprising poor and insignificant number of community entrepreneurs. The model thus should not construe a purely linear causation concept. The disaggregation of the target population intends to calibrate the interventions of the five pillars so that each population sub-group will receive the appropriate development interventions. The model recognizes that at certain phases, simultaneous administration of the appropriate interventions to the respective population sub-groups may be permissible and appropriate. At some other phase, the predominant administration of interventions (programs and projects) to solely one population sub-group is a better option. The basic criteria are cost efficiency and cost-effectiveness.

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Chapter

2 Samar, the Philippine

Economy and Poverty

Samar’s internal strengths and weaknesses, external opportunities and threats

Macroeconomic Assessment

Population Size and Growth and Poverty Situation

Samar’s population size and growth rates are below the national averages, exerting relatively lesser pressure in the demand for public goods and services (Table 2-1). From the point of view of demand attendant to demographic growth and trends, all things being equal, the island’s total population, size and growth rates are below the national average and lower compared to other regions, provinces and islands in the country. Samar provinces are also one of the least densely populated areas in the country.

Table 2-1: Population Data of Samar Provinces, Eastern Visayas Region and Philippines

10655,212 3718%589,373 38 18%641,124

Western Samar

623531,852 619317,565 61 10%360,160 Southern Leyte

281453,445 5113%454,195 50 14%500,639

Northern Samar

482416,520 1345%1,511,251 15 44%1,592,336 Leyte

14844,431 5811%362,324 59 10%375,822 Eastern Samar

53264528 724%132,209 75 4%140,274 Biliran

8521,988 5%3,366,917 5%3,610,355 Region 8 Eastern Visayas

255328,21468,616,536 76,498,735 Philippines

RankRank%1995Rank%2000

Density (person

s/sq km) 2000

Land Area (sq km)

Population (census-based)

6

Table 2-2 Annual Average Population Growth Rates and Migration By Sex, Province, Region VIII

1.821.870.63Western Samar

2.73-0.260.83Southern Leyte

2.113.210.13Northern Samar

1.131.891.32Leyte

0.791.80.27Eastern Samar

1.282.15-Biliran

1.511.840.88Region 8 Eastern Visayas

2.362.322.35Philippines

1995-20001990-19951980-1990

Annual Average Growth Rate (in %)

Northern and Eastern Samar are net out-migration areas (Table 2-2), an indication that the populace (particularly females) are in constant search for better opportunities elsewhere because of the pervasiveness of poverty in the island, especially in the rural areas. Why is there high out-migration? Table 2-3 (and Figures 2-1, 2-2, 2-3) provides a picture of the pervasiveness of poverty particularly in the rural areas of Samar. Thus, the overall perception particularly in the impoverished rural areas is that there may be social and economic opportunities abounding in urban areas, in the regional center (Tacloban City), in the major urban capitals and metropolis (Cebu and Metro Manila), and overseas.

Table 2-3 Poverty Incidence in Samar Provinces Compared to Region VIII and Philippines

40.749.538,40954,7999,1668,063Northern Samar

47.358.135,06751,3419,5168,577Eastern Samar

40.741.152,11045,1409,5748,470Samar

28.533.620,85631,3899,6748,194Southern Leyte

34.839.69,97511,87710,0728,626Biliran

36.132.9122,070105,1889,7908,262Leyte

37.839.9278,486299,7339,6238,319Region VIII

28.428.14,338,7803,982,76611,6059,843Philippines

200019972000199720001997

Incidence of Poor

Families 3/(in Percent)

Magnitude of PoorFamilies 2/

Annual Per Capita Poverty Threshold 1/

(in Pesos)PROVINCE

Because poverty is pervasive (rural areas) and there is

Table taken from NEDA 8 website

7

Figure 2-1 Poverty Incidence in Samar Provinces Compared to National

Poverty Incidence, 2000

28.4 30.640.7 47.3 40.7

0

50

100

Philippines E. Visayas N. Samar E. Samar W. Samar

Figure 2-2 Poverty Incidence in Samar: Comparing Incidence and Annual Income Thresholds

Poverty Incidence, 2000

28.4 30.640.7 47.3 40.7

0

50

100


P4,835

<P55,025/yr/hh

<P48,115/yr/hh

Figure 2-2 specifically highlights the magnitude of poverty incidence in Samar. Despite having a lower annual income poverty threshold per household of P48,115 in 2000 as compared to the national threshold of P55,025 per year per household, Samar poverty incidence stood at near the 50 percent mark (40.7 to 47.3%) in contrast to the national incidence of 28.4 percent and regional incidence of 30.6 percent.

Figure 2-3 highlights the disparity between rural and urban poverty incidence in Samar and the Philippines in the last census year (2000). Clearly established is that poorest of the poor are located in the rural areas and that main sources of the exodus to urban areas and cities are the poor rural households.

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Figure 2-3 Rural and Urban Poverty Incidence

41.444.9 43.7

53.547

0

10

20

30

40

50

60

70

80

90

100


Rural Poverty Incidence, Rural Poverty Incidence,

20002000Urban Poverty Incidence, Urban Poverty Incidence,

20002000


15 19.6

32.4 33.6

16.9

Production

The Eastern Visayas Region is a relatively small to an emerging medium-sized economy, ranking and belonging to the bottom quartile of the Philippines’ sixteen (16) regional groupings (Table 2-4). Among the provinces in the Eastern Visayas Region, Samar provinces contribute lesser to the regional economy compared to provinces of Leyte and Southern Leyte. In terms of per capita GRDP, the region falls one rank lower at 14th in relation to the 16 regions of the Philippines with a per capita contribution of only P5,626 compared to the national average of P12,353.

For the past 15 years, Eastern Visayas’ Gross Regional Domestic Product (GRDP) continued modest increase even during the sharp decreases in Gross Domestic Product (GDP) at the national level particularly during the period 1997 to 1998 when the Asian financial crisis occurred. The implication here is that Eastern Visayas’, and therefore including the Samar provinces, production are less sensitive to the fluctuations in the international/global markets. On the other hand, this also implies that there is a relatively weaker link between production in the area and the international competitive market. It is in the latter, however, where higher-value added trading occurs.

Samar’s contribution to the national economy lags behind other regions in terms of agriculture (for traditional crops, except for coconut) and other sources and measures of production (manufacturing and services). It ranks 12th among 15 regions in terms of agriculture, fishery and forestry sector, 10th among 16 regions for manufacturing and 11th among 16 regions for the services sector. (See Table 2-5.)

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Table 2-4 Gross Regional Domestic Product and Per Capita GRDP

Source: NSO 2002 Statistical Year book

Table 2-5 Eastern Visayas Region Contribution Share per Sector

GVA in Agriculture, Fishery & Forestry, GVA in Manufacturing GVA in the Services Sector

constant 1985 prices, in million pesos



2001 Rank 2001 Rank 2001 Rank

Philippines 197,736 244,084 454,824

NCR - - 95,822 1 191,195 1

CAR 3,485 15 9,676 7 5,216 14

1 12,626 6 1,563 12 12,968 8

2 11,708 7 671 14 6,931 13

3 22,071 2 27,078 3 32,683 4

4 35,386 1 47,280 2 52,233 2

5 9,206 10 391 16 12,341 9

6 20,552 4 11,228 5 31,389 5

7 9,136 11 14,296 4 38,739 3

8 7,274 12 4,597 10 7,768 11

9 13,885 5 2,360 11 8,882 10

10 10,390 8 9,552 8 15,617 7

11 21,934 3 10,673 6 24,193 6

12 9,258 9 7,152 9 7,367 12

ARMM 5,734 13 412 15 2,547 16

CARAGA 5,091 14 1,333 13 4,755 15

The value of exports and imports by port of origin/destination in the Eastern Visayas Region also indicate that the there is very minimal trading activities emanating or originating in the Samar provinces (Table 2-6).

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Table 2-6 Comparative Value of Exports and Imports Among the Major Areas in Eastern Visayas Region

Table taken from NEDA 8 website

Sector Performance

On the overall rapid sector appraisal, including the review of existing development plans in the area, Samar provinces exhibited modest performance in coconut production and abaca. The other emerging growth sectors identified in the past five (5) years are aqua and marine culture, corn, root crops, palay production and eco-tourism potentials. These are the same sectors identified in the various development plans (regional and provincial) reviewed.

While palay production in Samar provinces falls among the bottom 40 percent of the country’s regions (Table 2-7), there is still a lot of room for growth or at the very least, achieve 100 percent rice sufficiency. Palay is a traditional crop and one whose cultivation technology is culturally passed on to the next generation and is familiar to Filipino farmers in the countryside. It is therefore difficult to recommend for its downplaying or much worst, its phase out in the scheme of development.

In Region VIII, the palay area is 228,521 hectares with only about 45 percent irrigated, rain-fed accounts for 54 percent and 1 percent belonging to upland rice. Productivity is about 3.67 metric tons per hectare (from the earlier productivity of 2.8 metric tons in the mid 1990s). Regional rice sufficiency is 97 percent and there are enough bases given the resources to achieve a 100 percent rice sufficiency level.

Eastern Samar’s production in corn in 2000 falls within the top 40 provinces in the country (Table 2-7). In fact, it topped (ranked 1) the growth rate of corn production from 1999 to 2000. Corn sufficiency in the region is 94 percent.

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Table 2-7 Palay and Corn Production

Palay Production Corn Production

2000 Per capita

Growth 2000 Growth

Metric Tons % Rank MT Ra

nk Rate fr '99 Rank Metric Tons % Rank

Rate fr '99 Rank

Philippines 12,389,412 16.2 5.1 4,511,104

Region 8 Eastern Visayas 517,558 4% 46,306 1%

Biliran 53,375 10% 53 38.1 13 4.3 34 695 2% 65 7.8 22

Eastern Samar 26,796 5% 65 7.1 61 8.2 25 31,435 68% 27 44,807.1 1

Leyte 282,160 55% 13 17.7 31 3.7 37 4,589 10% 49 -84.9 74

Northern Samar 48,882 9% 56 9.8 55 -5.7 61 5,770 12% 46 2.6 33

Southern Leyte 50,633 10% 54 14.1 38 0 48 75 0% 73 -98.3 75

Western Samar 55,712 11% 50 8.7 57 -0.3 50 3,742 8% 51 -20.8 63

Banana production in Western Samar accounts for about a fourth of the Region’s production (together with Leyte) and is second to Southern Leyte in terms of overall contribution to the Region (Table 2-8). Banana production in the province ranks 30th compared to the other provinces nationwide. Overall, Western Samar and to a much lesser extent, Northern Samar, can play secondary role in banana production in the Region.

Coconut production in Samar provinces falls within the top 20 provinces in the country. However, growth rates in coconut production from 1999 to 2001 had been negative or zero for the three Samar provinces (Table 2-8).

Table 2-8 Banana and Coconut Production

Banana Production Coconut Production

2000 2000

Metric Tons % Rank

Growth rate fr

'99 Rank Metric Tons % Rank

Growth rate fr

'99 Rank

Philippines 4,155,668 7.4 12,499,097,767

Region 8 Eastern Visayas 138,924 3% 1,544,811,558 12%

Biliran 13,094 9% 39 -2.8 63 33,166,768 2% 50 14.3 11

Eastern Samar 4,238 3% 58 0.4 51 229,090,420 15% 15 0 51

Leyte 32,083 23% 29 3.6 31 660,490,459 43% 5 0 52

Northern Samar 7,946 6% 46 0.3 53 214,063,126 14% 18 -3.8 62

Southern Leyte 50,086 36% 18 28.7 7 109,242,578 7% 36 0.5 48

Western Samar 31,477 23% 30 -0.4 57 298,758,207 19% 13 -9 58

Fish production is a dominant economic activity in Western Samar. Among the provinces in the country, fish production in Western Samar ranks 24th in 1999-2000 (Table 2-9). Fish production in Eastern Samar ranked 53rd, while Northern Samar ranked 55th during the same period. Marine culture or “mariculture” accounted for 86.6 percent of total aquaculture production in Eastern Visayas region (2004). The growth rate of mariculture in 2004 was 25.3 percent; the biggest increase was in bangus production in fish cages while seaweeds production had the highest proportion.

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Table 2-9 Fish Production

Fish Production (in metric tons)

2000 Growth

Aquaculture Commercial Municipal Total % Rank rate fr '99 Rank

Philippines 1,044,433 946,485 945,945

2,936,863 2.1

Region 8 Eastern Visayas 74,829 3%

Biliran - 2,637 1,025 3,662 5% 57 4 47

Eastern Samar 126 1,438 4,817 6,381 9% 53 10.1 29

Leyte 1,175 18,810 6,608 26,593 36% 23 7.8 36

Northern Samar 34 961 4,417 5,412 7% 55 -4 68

Southern Leyte 65 1,801 4,559 6,425 9% 52 -0.9 61

Western Samar 3,017 6,850 16,489 26,356 35% 24 -0.3 60

Infrastructure, Establishments and Housing

The lack of basic public infrastructure remains one of the foremost hindrances to development in the island of Samar. Roads and bridges, power and electricity, ports, irrigation, potable water supply systems, telecommunications and other common service and economic facilities and infrastructure are wanting throughout the whole of Samar, particularly in rural areas and areas outside the provincial capitals or city. The availability of and quality of service of the facilities that are currently in place also pale in comparison to regional and national averages or standards.

Roads

Road densities in the provinces of Samar are the lowest in the Eastern Visayas region and these are below the national average. A visual inspection of the road map below will further show the inadequacy of road access to major capitals and market centers from the production areas and vice versa. Contrast this to the relative spread of the road network in the other provinces of Eastern Visayas region.

Table 2-10 Road Density

13

Figure 2-4 Eastern Visayas Region Transport Map

Table 2-11 shows the relative length of roads and the surface type among different provinces in Region 8. The province of Eastern Samar ranks poorly at 73rd in terms of the total length of concrete national roads. About 36 percent (or 114 kms) of the total length of Eastern Samar’s national roads is still with gravel type surface. Fifty-one percent (51%) of Northern‘s Samar’s total length of national roads is likewise of gravel type.

Figure taken from NEDA 8 website

14

Table 2-11 Road Length and Surface

Length of National Roads (in kilometers), 2000

Concrete Asphalt Gravel Earth Total Length % Rank Length % Length % Length %

Philippines 10,611.26

35.70

6,636.47

22.30

11,875.18

39.90 609.95

2.10

29,732.85

Region 8 Eastern Visayas

Biliran 43.11 33 37 - 0 87.67 67 - 0 130.78

Eastern Samar 21.34 6.8 73 176.41 56.6 114 36.6 - 0 311.75

Leyte 562.08 58.8 14 30.56 3.2 333.83 34.9 29.58 3.1 956.05

Northern Samar 132.83 45.6 24 4.75 1.6 150.51 51.6 3.37 1.2 291.45

Southern Leyte 144.58 51.1 19 - 0 133.44 47.1 5.16 1.8 283.18

Western Samar 299.78 84.8 1 11.7 3.3 41.95 11.9 - 0 353.42

Irrigation The provinces of Samar suffer from the lowest percentage of irrigation development among the provinces in the region as well as in relation to the total percentage of irrigation development at both the regional and national levels. Only 13 percent of the total irrigable area in Eastern Samar is with irrigation, 16 percent in Western Samar and 19 percent in Northern Samar. The presence of efficient and adequate irrigation facilities have a direct bearing on agricultural productivity. The low level of irrigation development in the three Samar provinces greatly explains the low levels of agricultural productivity particularly for traditional crops. Table 2-12 Status of Irrigation Development by Province/Type, As of September 2003

15

Electrification

A considerable number of potential barangays for electrification are without energy and still wanting of services due from electric cooperatives. Only 77 percent of barangays in Eastern Samar and only 63 percent of potential barangays in Northern Samar in 2003 have electric cooperative services.

Table 2-13 Number of Municipalities and Barangays Energized by Electric Cooperative, 1997-2003

Electric Cooperative Potential Barangays

1997 1998 1999 2000 2001 2002 2003

Region VIII Municipalities 143 143 143 143 143 143 143 Barangays 4,389 2,343 2,412 2,912 2,921 3,043 3,228 3,618

ESAMELCO Municipalities 23 23 23 23 23 23 23 Barangays 596 119 128 316 327 331 352 458

NORSAMELCO Municipalities 24 24 24 24 24 24 24 Barangays 569 176 179 211 229 244 270 356

Kerosene remains to be the source of illumination of the majority of the households in occupied dwelling units in both Eastern and Northern Samar in 2000. The use of electricity for lighting constitutes only 33 percent of dwelling units of households in Northern Samar, while 43 percent is the corresponding proportion for Eastern Samar.

Table 2-14 Number of Households in Occupied Dwelling Units by Kind of Lighting Used and Province/City, Urban-Rural, Census Years 1990 and 2000

1990 Province/City/Kind of Lighting Used Total Urban Rural

2000

Eastern Samar 60,720 23,118 37,602 73,032 Electricity 8,000 5,974 2,026 31,748 Kerosene 47,993 15,962 32,031 37,528 Liquified Petroleum Gas (LPG) 4,388 1,112 3,276 928 Oil 19 - 19 346 Others 320 70 250 2,482 Northern Samar 72,365 24,568 47,797 94,410 Electricity 8,152 6,119 1,953 31,619 Kerosene 58,906 17,417 41,489 57,516 Liquified Petroleum Gas (LPG) 4,882 868 4,014 2,686 Oil 170 52 118 392 Others 255 32 223 2,197

Number of Establishments

Most of the establishments in Eastern and Northern Samar belong to the Wholesale and Retail Industry, Manufacturing and Personal Services. Hotels and restaurant establishments outnumber Personal Services in Northern Samar while the same are close fourth in Eastern Samar.

16

Table 2-15 Number of Establishments By Major Industry Division and Province, 1997-2002

Province/ Major Industry Division 1997 1998 1999 2000 2001 2002

Region VIII 21,966 22,099 21,794 21,399 21,153 21,103 Agriculture, Hunting and Forestry 99 101 119 106 100 96 Fishery 69 69 107 90 85 84 Mining and Quarrying 4 4 1 2 2 2 Manufacturing 4,109 4,109 3,803 3,698 3,641 3,634 Electricity, Gas and Water 69 73 102 62 66 67 Construction 120 126 108 80 72 72 Wholesale and Retail Trade 11,696 11,792 11,869 11,860 11,799 11,776 Hotels and Restaurants 1,800 1,804 1,937 1,906 1,894 1,892 Transport, Storage &

Communication 966 973 786 611 595 581

Financial Intermediation 403 403 391 428 411 424 Real Estate, Renting & Business

Services 706 714 621 632 597 588

Education 156 160 199 207 202 201 Health and Social Work 332 332 403 387 382 382 Other Community, Social &

Personal Services 1,437 1,439 1,348 1,330 1,307 1,304

Eastern Samar … … 1,970 1,974 1,942 1,936 Agriculture, Hunting and Forestry … … 5 5 6 5 Fishery … … 2 4 4 4 Mining and Quarrying … … - - - - Manufacturing … … 355 353 347 347 Electricity, Gas and Water … … 8 6 4 4 Construction … … 6 6 6 6 Wholesale and Retail Trade … … 974 983 974 973 Hotels and Restaurants … … 115 114 113 113 Transport, Storage &

Communication 69 45 43 40

Financial Intermediation … … 36 67 60 60 Real Estate, Renting & Business

Services … … 56 55 50 50

Education … … 28 26 25 25 Health and Social Work … … 47 42 42 42 Other Community, Social &

Personal Services … … 269 268 268 267

Northern Samar … … 2,669 2,511 2,499 2,492 Agriculture, Hunting and Forestry … … 4 2 1 1 Fishery … … 4 4 4 4 Mining and Quarrying … … - - - - Manufacturing … … 356 324 319 319 Electricity, Gas and Water … … 8 6 11 11 Construction … … 5 4 3 3 Wholesale and Retail Trade … … 1,682 1,601 1,596 1,592 Hotels and Restaurants … … 186 178 177 176 Transport, Storage &

Communication 139 118 118 117

Financial Intermediation … … 22 24 24 24 Real Estate, Renting & Business

Services … … 60 62 62 61

Education … … 21 22 21 21 Health and Social Work … … 41 38 37 37 Other Community, Social &

Personal Services … … 141 128 126 126

Housing

Walls made of Bamboo/Sawali/Cogon/Nipa reinforced majority or about 46 percent of total occupied housing units in both Eastern and Northern Samar in 2000. Seventy- one percent (71%) of the occupied housing units in Northern Samar were made of Cogon/Nipa/Anahaw while about 52 percent was the proportion in Eastern Samar in same year.

17

Table 2-16 Number Of Occupied Housing Units By Construction Materials Of Roof And Outerwalls And

Province/City, Census Year 2000 Type of Roof

Province/Type of Outer Walls

Total Occupied Housing Units

Galvanized Iron/ Aluminum

Tile/ Concrete/ Clay Tile

Half Galvanized Iron and Half Concrete

Wood Cogon/Nipa /Anahaw

Make-shift/ Salvaged/ improvised

Asbestos/ Others

Not Reported

Eastern Samar 72,600 30,849 245 2,076 633 37,800 107 162 728 Concrete/Brick/Stone 10,323 9,614 83 147 17 448 1 13 - Wood 15,992 10,099 63 388 408 4,997 8 29 - Half Concrete/Brick/

Stone & Half Wood 9,377 7,158 40 1,079 47 1,027 3 23 -


483 246 5 54 15 160 2 1 -

Bamboo/Sawali/ Cogon/Nipa

34,286 3,200 - 374 131 30,515 29 37 -

Makeshift/Salvaged/ Improvised

306 72 - 4 3 165 60 2 -

Asbestos 140 78 39 6 5 - - 12 - Glass 12 5 5 2 - - - - - Others/Not Reported 1,596 331 8 21 6 458 2 42 728 No Walls 85 46 2 1 1 30 2 3 -

Northern Samar 93,332 20,981 328 2,496 1,175 66,512 292 330 1,218 Concrete/Brick/Stone 11,655 8,841 182 251 23 2,330 5 23 - Wood 25,294 6,591 58 550 657 17,319 36 83 - Half Concrete/Brick/

Stone & Half Wood 9,583 4,168 55 1,357 40 3,916 12 35 -


312 119 8 39 20 121 4 1 -

Bamboo/Sawali/ Cogon/Nipa

43,610 1,073 - 269 412 41,670 72 112 2

Makeshift/Salvaged/ Improvised

684 38 - 2 2 470 159 13 -

Asbestos 57 23 18 4 3 - - 9 - Glass 11 3 4 2 - - - 2 - Others/Not Reported 2,080 105 3 21 17 664 3 51 1,216 No Walls 46 20 - 1 1 22 1 1 -

A small percentage of the total housing units in both Eastern and Northern Samar have household appliances and other home conveniences in 2000. Most of these conveniences are radios (94 to 95%); a far second are with television sets (25 to 30%). Table 2-17 Number Of Households In Occupied Dwelling Units With Household Appliances/Conveniences

And Province/City, Urban-Rural, Census Years 1990 And 2000 1990 Province/City

Type of Appliances/Conveniences Total Urban Rural

2000

Eastern Samar 31,679 16,178 15,501 42,985 Radio/Radio Cassette 26,218 11,976 14,242 40,611 Television 1,179 977 202 12,748 Video Cassette/Recorder .. .. .. 6,322 Refrigerator/Freezer 1,959 1,646 313 9,400 Telephone/Cellphone 107 80 27 1,250 Washing Machine .. .. .. 4,018 Motor Vehicle 2,216 1,499 717 4,651

Northern Samar 36,416 17,799 18,617 56,453 Radio/Radio Cassette 31,022 13,534 17,488 53,968 Television 999 817 182 14,373 Video Cassette/Recorder .. .. .. 7,280 Refrigerator/Freezer 2,027 1,703 324 11,283 Telephone/Cellphone 264 232 32 668 Washing Machine .. .. .. 4,243 Motor Vehicle 2,104 1,513 591 5,741

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Agrarian Reform

Agrarian reform remains for completion in the Eastern Visayas region. About 47,368 of prime private agricultural lands remain for distribution as of December 2004. Quality of ownership remains low with the low and slow rate of individual titling. There are also incidences of land conversion and/or significant number of idle lands due to the lack of irrigation facilities and development support to agrarian reform beneficiaries (ARBs).

Table 2-18 DAR's Land Distribution Accomplishment

(Area in Hectares)

1972 - December 2004

Region Scope Accomp. %

Philippines*_/ 4,290,453 3,513,339 82

CAR 77,856 81,466 104

I 140,340 121,587 87

II 300,055 309,982 103

III 405,290 375,689 93

IV-A 204,818 138,076 67

IV-B 170,817 140,240 82

V 453,769 234,596 52

VI 559,688 320,657 57

VII 166,802 116,468 70

VIII 385,505 338,137 88

IX 158,469 182,161 115

X 269,799 255,247 95

XI 202,279 194,992 96

XII 431,035 401,534 93

CARAGA 200,262 186,532 93

ARMM 163,669 115,975 71

*_/ includes 2 ARMM Provinces (Basilan & Lanao Sur) w/c are still part of DLR's CARP scope

19

External Environment

The assessment of the external environment of Samar refers to the opportunities and threats that influence, positively or negatively, the planned development interventions in the area. The opportunities and threats, being external and exogenous to Samar, are essentially beyond the control of the planning area. However, the internal strengths can be strengthened and internal weaknesses minimized to mitigate the threats and take advantage of the opportunities posed by the external environment.

Opportunities

Based on the analysis in the various plans formulated for Samar and its provinces, the following are the overall opportunities posed by the external environment:

1. The avowed priority of the National Government to administer to poverty-stricken areas poses as an opportunity for Samar. Poverty alleviation remains an expressed priority of the national government and its line agencies and instrumentalities. The Medium-Term Philippine Development Plan, the Regional Development Plan of Eastern Visayas Region (Region 8) and the official plans of government prioritize poverty alleviation as key features and guiding criteria in the design and implementation of various programs and projects. The impact on poverty is a major frame and criterion in the programming of public expenditures and prioritization of public investments. This recognition by the public sector poses as an opportunity for Samar to assert its claim on national government resources due to poverty alleviation.

2. National government, the official development assistance (ODA) community and international development NGO assistance or aid have recognized the need to assist & develop certain sectors of Samar’s economy particularly in the areas of coastal resource management, coconut production & its by-products, aqua culture, eco-tourism, disaster management and other integrated area development concerns. In the past decade, Samar has been a recipient of several development assistances and the same

3. There has been increasing private investments and/or intentions/manifestations to invest in Samar particularly in certain agricultural products (coconut, seaweeds), eco-tourism brought about by the “spill-over” of nearly saturated markets of Leyte and Central Visayas.

Threats

Assessments of the development situation in Samar perennially refer to specific threats. The following are the major threats that need mitigation and management to allow local economy building to proceed:

1. The whole of Samar island, particularly Eastern and some municipalities in Northern Samar, continue to be threatened by natural calamities particularly typhoons and is vulnerable to their attendant effects due to deforestation and denudation: • The general area of Eastern Visayas with Samar island at its heart is frequently visited by

typhoons yearly, in some years the number reaches 25;

• The situation is aggravated by the continuing decline of the island’s forest cover: from 920,913 hectares of forest to 460,548 – below 40% acceptable standard and from 26,300 hectares of mangrove areas in 1988 to only 6,000 hectares in 2003;

2. While Samar remains a priority in poverty reduction, other provinces like those in ARMM and CAR

regions have worse levels of poverty and thereby compete with the already scarce development resources of the national government.

3. Peace and order, including the insurgency in the countrysides, continue to rage and linger in Samar

island.

20

Chapter

3 Community and Household

Assessment

hapter 3 discusses two sections: (a) spatial and community assessment of the pilot areas and (b) characteristics of the households. Discussions on the characteristics of the pilot communities focus on their spatial and development roles in relation to their respective provinces. On the other hand, the discussion on

the characteristics of the households will focus specifically on the socio-economic variables gathered from the household survey conducted in the pilot communities.

As cited in the framework in Chapter 1, relevant and effective local economy building interventions stem from a good understanding of the development circumstances of the households and the spatial and development characteristics of the communities they occupy. This chapter will delve into the two variables focusing on the strengths, weaknesses, opportunities and threats analysis. The results will greatly shed light on the major contours of the blueprint for developing the local economies, as these will identify the major entry and/or congruence points between and among the five pillars.

In discussing pilot communities and households, this chapter refers to the following study areas:

1. Northern Samar and the municipalities of Lavezares, Mondragon and San Jose, and 2. Eastern Samar and the municipalities of Borongan, Guiuan and Mercedes

Spatial Characteristics of the Pilot Communities

The following section is an assessment of the spatial and community characteristics of the study areas. The assessment draws on the analysis cited in the respective provincial physical framework plans (PPFPs) of the three provinces. The PPFPs provide the overall spatial development framework of the provinces in relation to their respective strengths, weaknesses, opportunities and threats (SWOT) and works on the past, current, and future developmental and spatial trends. PPFPs guide the local planners in the overall direction of development – population, settlements and built-up areas, agro-industrial zones and other production areas, protected areas and the configuration of public infrastructure given the settlement, production and protection configuration.

The consideration of the PPFPs in configuring the prototype development blueprints of the study areas is necessary to have consistent interventions that complements and makes use of planned or in-place public investments in the affected communities. The PPFPs provide specific spatial and development roles for each municipality and/or clusters of municipalities that supports the overall provincial spatial framework. The PPFPs, in turn, are consistent with the overall policies cited in the Regional Physical Framework Plan (RPFP). The municipalities are tasked to formulate their comprehensive land use plans that substantially conforms and consistent with the PPFPs and RPFP. Internal Strengths and Weaknesses:

1. In Eastern Samar, Borongan (capital) and Guiuan (eco-tourism & trading center of the southern portion) possess stronger attraction to private investors. These municipalities are characterized by the following attributes:

• relative accessibility • higher level of infrastructure already in place • rich natural resources/endowments • high tourism potential

C

21

The Eastern Visayas PPFP identifies the municipality of Borongan (the provincial capital) as the major settlement area of the province. This means that institutional (private and public), agro- industrial, commercial and financial establishments that serve the needs of the population are expected to conglomerate in Borongan.

The municipality of Borongan

possesses a relatively higher infrastructure base that is conducive to investments. Expectations are high in the continued improvement in its infrastructure base, particularly in the areas of physical access, communication services, power and other facilities to support the built-up areas that will also mutually benefit the surrounding towns.

On the other end of the province,

the municipality of Guiuan serves as the trading center of the southern portion of the province. The Guiuan-Mercedes corridor may benefit from the identified Guiuan Industrial Estate. (Mercedes was formerly a part of Guiuan.) Guiuan has high tourism potential owing to its rich natural and coastal resources, not to mention its historical significance. The PPFP and the municipal development plan of the town cite these development contours and potentials well.

In terms of integration with the

regional economy, the identified study areas are relatively accessible by road transport on the way to the Regional Center, which is Tacloban City (hosting the regional airport). Quality of access is quite good owing to the newly constructed

(or currently undergoing reconstruction) national highway from Tacloban going to Eastern Samar. Current transport services and the quality of access have improved tremendously compared to the conditions in the last three years.

Spatially, Borongan being the provincial capital and the major settlement and built-up center, can stand

alone in relation to its development path. In other words, a “do-nothing” scenario for Borongan will still see the area developing into the role cut out for it in the PPFP. On the other hand, Guiuan is an emerging development area endowed with natural attractions that are conducive to the inflow of external development and investment resources. However, Guiuan and more so, Mercedes, compared to Borongan will have to rely on more pro-active development interventions to start and fully realize its spatial development roles.

Local economy development, as envisage by CANDLES, will not affect the spatial development scenario

for the pilot areas nor the other municipalities. On the contrary, the blueprint for local economy development will work on the spatial roles laid out for the said pilot areas and complement the development efforts already in place.

Figure 3-1 Eastern Visayas and the location of Borongan, Guiuan and Mercedes

Study Areas

22

2. In the province of Northern Samar, the municipality of San Jose accounts for relatively high agro-industrial and eco-tourism potential and is the area with most exposure to NGO-LGU collaboration in a variety of sectoral development efforts (i.e., microfinance, women, coastal resource management, etc.). The municipality of Mondragon’s strength lies in its proximity to the provincial capital (Catarman) and is rich in agricultural and fishery resource potential and/or endowments. It has ready access to technology with nearby University of Eastern Philippines (UEP). Lavezares is a tourism center in the western corridor of the province and serves as transshipment or take-off point to the island tourist attraction of Biri.

N. N. SamarSamar

S

The municipality of Mondragon, being the nearest to Catarman, is spatially planned as a minor settlement and urban center. It accessible and near the provincial capital and poised to absorb the population spillover of Catarman. Catarman hosts a major airport is thereby relatively integrated to the major markets of Manila, Cebu, Davao and other markets that have access to air travel.

Marine and fishery/aquamarine-based potentials are significantly present in the coastal areas of

San Jose and nearby municipalities. There are marine-based entrepreneurial activities in the area and potentials for expansion to include more participants from the poor and enterprising poor households are not remote possibilities.

The municipality of Lavezares, in addition to its coastal resource, serves as an eco-tourism hub

of the western portion of the province. The PPFP identifies this spatial role for the municipality being proximate to the island attractions (i.e., rock formations) of Biri (which by itself is a municipality of interest).

Major spatial weaknesses of the identified pilot or study areas pertain to the moderate to severe

erosion and siltation in upland areas that affect the lowland and downstream areas of Mondragon, Lavezares and San Jose. The upland and forest areas in the municipalities of Silvino Lobos and Lope de Vega suffer from declining forest cover and deforestation (due to illegal logging) making the affected areas mid and downstream vulnerable to the effects of these hazards. Integrated spatial planning is thus necessary to fully harness and preserve whatever gains resulting from the above-mentioned strengths of the municipalities.

Study Areas

S = Settlement

= Erosion/Hazard areas

23

3. The identified pilot communities have comparative advantages in varying degrees in the following products or sectors:

• Seaweeds and corn (starting year 2000) in all the pilot Eastern Samar municipalities

• Coconut and its by-products in all the pilot municipalities with particular dominance of Northern

Samar areas

• Abaca and root crops in the pilot areas in Northern Samar

• Fish, marine and aquaculture in all the provinces (including Western Samar)

• Eco-tourism potentials in specific spots in the pilot municipalities

4. There are certain spatial weaknesses particularly for Mercedes and Guiuan. The proximity of the two municipalities to each other and the gravitation of the market to Guiuan cause the relegation of Mercedes to play supportive although complementary role to Guiuan. Mercedes used to be part of Guiuan and with the proactive development initiatives directed at Guiuan as the host of the industrial estate will spatially make this the central hub where economic activities gravitate around it.

5. In all the pilot municipalities, except probably to a lesser degree for Borongan, the absence or inadequacy

of basic infrastructure conducive to higher-value investments hamper the influx of private investments and businesses. The following are the most frequent factors cited in documented plans and/or results and responses from rapid appraisals conducted among stakeholders and informed sources in the areas:

• Concrete access roads linking production areas to markets

• Steady, reliable and adequate supply of electricity

• Communication facilities

• Air and seaports

• Irrigation

• Common service facilities for production and post-production and processing

External Opportunities and Threats: The following are the opportunities that may significantly contribute in harnessing the full spatial development potential in the pilot communities and nearby influenced areas:

1. Foreign-assisted projects (FAPs) implemented through national line agencies and programs/projects of regular government agencies that have features complementing local community and economic development efforts are present in the pilot and nearby areas:

a. Various official development assistance (ODA) or foreign-assisted projects (FAPs) implemented by national line agencies (i.e., DA, DAR, DENR, BFAR, NIA, DPWH, etc.) and LGUs provide opportunities that can support local economic and community development efforts in Samar. Investment interventions of these FAPs that complement major elements of the local economy-building model can converge in pilot areas and/or interface with the planned local development activities of any of the five pillars of local economy. These may be in the areas of coastal-based resource management, local capability building, infrastructure, support to agrarian reform

24

communities, agricultural productivity enhancement, local infrastructure, microfinance and credit, community and institutional development, local capability building, gender, environmental protection and natural resource management, etc. Most FAPs are loans by the national government and a significant number of them are for vital rural infrastructure and big-ticket public investments that should be judiciously used and invested in poverty-stricken areas.

b. DTI and other specialized agencies’ programs on the development of products provide

opportunities for developing the products of each town where they my have competitive and comparative advantages in production and marketing.

c. DOT programs on development of tourism and promotion of certain areas of interest in Samar

as tourist destinations augurs well for the pilot areas and the environs. Guiuan and the island municipality of Biri are featured tourism areas in DOT plans and programs in the whole island of Samar.

2. The presence of international and national/regional/local NGOs that focus on the advocacy of specific

sectors or promotion/protection of products of the communities abound in Samar. These are in the areas of: environment, biodiversity, political, and advocacy NGOs, agriculture, livelihood, rural development, population management, family planning and children’s welfare, persons displaced by war, microfinance, women and reproductive health, etc. Their presence is a development opportunity that positively and productively trained towards local economy building not only in the pilot areas but in the whole island as well.

3. Initiatives at the national level pose as opportunities to advance local economy building initiatives like:

a. Establishment of economic zones (San Jose, Guiuan) by the Philippine Economic Zone

Authority (PEZA), given certain conditions, may pose as opportunities in as far as improving access to and from the areas and other related positive developmental outcomes (i.e., improvement in power and other utilities, etc.);

b. Samar Island Bioversity Project protecting the remaining forest of Northern Samar;

c. Bill proposing the establishment of an eco-tourism zone in Northern Samar

The following are some of the external threats that exist:

1. Eastern Samar and to some extent Northern Samar municipalities are always prone to natural disasters such as typhoons;

2. In Northern Samar, the pilot municipalities are prone to flash flooding, soil erosion and other geological

hazards due in part to forest denudation;

3. There is continuing degradation of marine areas and depletion of biodiversity due to over harvesting, illegal methods of fishing and uncontrolled extraction of coral rocks in Northern Samar;

4. There is also a monopoly of certain economic and business activities (i.e., abaca in Northern Samar) that

may discourage and pose a threat or “barrier” to the entry of competitive investors in the local economies of the communities

25

Socioeconomic Assessment of the Surveyed Households

Internal Strengths and Weaknesses: Demography

1. There is potential clientele in the pilot areas that follows the pattern of successful microfinance and enterprise development: women-clientele and/or presence of joint household decision-making has increasingly participated in by the female household member or more members of the extended households.

a. Seventy-one percent (71%) of the heads of households in the pilot areas who agreed to be interviewed and reveal vital household information were female;

b. There is increasing roles of women particularly in income generation and augmentation efforts of the households;

c. Females (and/or both heads of households) dominate expenditure decisions;

d. The productive age range of the decision-makers is from 31 to 50 years old (modal age brackets).

26

2. Average household size is 5.7 members and is higher than the regional average. There is a large and extended household in the pilot areas, implying higher household needs and

expenses.

3. The typical household is composed of young, school-going age: average age of oldest (or the 3

rd member) is 20 and while the 5

th member if 15 years old. This implies high dependency –

more young persons are dependent on adults. This also is indicative of the close age spacing of children.

4. The last members of the households (extended family member) are older, often out of work, retired or are senior age levels.

5. Only 22 percent of the household members interviewed reached or finished college level.

1061

1%9

No

response

16%16661 above

17%17951 to 60

26%27241 to 50

26%27431 to 40

14%14921 to 30

1%12

Less than or

equal to 20

%NoAge Range

Educational Level No %

College 232 22%

High School 386 36%

Elementary 397 37%

Vocational 9 1%

NA 37 3%

1061 100%

Status No %

Married 971 92%

Single 24 2%

Separated 7 1%

Widowed 54 5%

Blank 5 0.47%

1061 100%

Income

1. Using income as a measure of the “entrepreneurial” poor clientele, there are potential entrepreneurial households in the non-poor groups in both provinces.∗ Average annual income (for the first income source) of the non-poor group is P101,614. Northern Samar households in the pilot areas have higher average of P149,018 and Eastern Samar households have P62,110.

∗ Potential entrepreneurial poor is loosely defined here as those slightly above the poverty threshold (and are

therefore “non-poor”). Income level is one major determinant of a household’s ability or propensity to be

“entrepreneurial” (in contrast to “subsistence”) although it is definitely not the only measure. There may be

households whose incomes are at subsistence levels but may become entrepreneurial or have the “entrepreneurial

spirit”.

27

2. The depth of poverty (distance away from the regional poverty threshold of P48,115 a year) is high (or

“very deep”). The average first and regular income source of about 75 percent of the respondents from the poor group is P30,636 and is only 63 percent of the poverty threshold. Eastern Samar’s poor are deepest or farthest from the threshold with only an average P26,726 a year. Northern Samar’s poor are slightly better off with P34,546 a year.

3. Considering the average income of the households of up to the second and third sources, the potential for

a more entrepreneurial clientele is enhanced. These are in the following areas: (a) Borongan (urban, non-poor group) in Eastern Samar, (b) Mondragon (urban, non-poor group) in Northern Samar. Secondary areas are the rural, non-poor groups in San Jose and rural and urban, non-poor groups in Lavezares, Northern Samar.

4. Even if one considers the average of the second and third income sources of the poor group, all (except

for one) of the areas in both provinces fall short of the income needed to effectively distance themselves from the poverty line to “qualify” (again, this is based on income levels) as potential enterprising poor. Except for those from the San Jose urban poor group, the rest of the groups are likely to be in “subsistence” or day-to-day mode of economic survival rather than on an enterprise frame. This connotes that, based on the income criteria, most of the poor households surveyed are at subsistence income levels that is more often than not, less pre-occupied with entrepreneurial motivations and more on subsistence living.

Other Pertinent Factors

1. Savings pattern – Of the households surveyed, 59 percent in Eastern Samar and 47 percent in Northern Samar set aside fixed amount from their regular monthly income as savings.

2. Purposes of saving – Fifty-four percent (54%) save for food, education and housing expenses and other

necessities that will occur in the future and very few save for investments and other productive investments.

3. Real properties – Eighty-six percent (86%) have at least one real property whose average fair market

value is estimated at about P114,346. These properties are typically house and lot and/or agricultural lots. The average age of these properties from the time of acquisition or possession is 17 years.

4. Secondary properties – Only 28 percent reported ownership of second real properties and most of these

are farmlands planted to rice, corn, coconut, and other crops with an average value of P155,403. 5. Agrarian reform – Only 3 percent of the total respondents reported that they benefited from agrarian

reform. The average land holding distributed is 1.5 hectares.

6. Personal properties – Only 58 percent reported ownership of personal properties dominated by appliances and a far second is ownership of small vehicles and work animals.

External Opportunities and Threats: There are certain opportunities and threats emerging from the survey. The dominant ones are:

1. There are consistent identification of certain microfinance institutions and NGOs by respondents in both provinces, in both rural and urban, and poor and non-poor groups who helped them in their various financial needs. The needs frequently identified are the following: financing for livelihood, food and basic services, emergencies, (financing for) copra trading/buying, purchase of small vehicles, buy and sell, sari-sari store operations, etc. This is indicative of two opportunities: (a) there is a demand for microfinance

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services, and (b) there are microfinance providers that have working experiences in providing credit that can provide information on what works best (and what does not) among Samarnons.

2. Government and/or government-owned and/or controlled corporations and financing entities like GSIS,

SSS and LBP have existing engagements with both the poor and non-poor groups particularly among the salaried household members. These are the teachers, government employees including mostly barangay and LGU officials and employees, other salaried employees.

3. Very little help from government and NGO entities in terms of support system in helping the households

save (only 5 percent of respondents said they got some form of assistance to enable them to consciously save) and most of them relied support from their relatives.

4. A considerable number of the respondents identified informal private lenders as a source of credit

particularly in times of need. Private lenders comprised 20 percent of the total source of credit in Northern Samar and 11 percent in Eastern Samar.

Households in the Pilot Communities: Findings and Insights

Two Major Characteristics The households in the pilot communities surveyed exhibit two major characteristics. First, significant segments of them are mired deeply into poverty. Their distance from the poverty threshold is deep or far, considering the fact that the threshold in Samar is below the national threshold level. This set of households comes mostly from the rural and remote areas. Looking at income levels as a gauge of ability to engage in economic activities beyond subsistence, this group will exhibit less of such. The expectation for these households is that their main pre-occupation is daily survival more than entrepreneurship. The second characteristic found among the pilot households is that the income levels of the non-poor groups are not very far from above the threshold; their income levels in 2004-2005 are still in danger of slipping back near or below the poverty threshold given crisis in the households. Only a minority have achieved income levels sustain-ably away from poverty (threshold). These set of households however are poised to be more entrepreneurial and less subsistence framed. Duality of Interventions Addressing Two Groups The characteristics of the households in the pilot communities indicate a need to differentiate development interventions both in terms of project or program design and target clientele. Programs and projects to address the poorest of the poor – or the households deeply way below the poverty threshold – are in line. The design will have as a major outcome the shifting of the modal frame of the households from subsistence, day-to-day existence to a higher level of development. This will entail basic social and welfare services, education (formal and informal), asset reform, support services, basic shelter and public infrastructure. Parallel with the interventions addressing extreme poverty are the programs and projects whose designs are to engage the entrepreneurship-ready poor households and non-poor households that are only just above the poverty threshold. These programs and projects shall make use of existing local resources, local capabilities and innovative ventures needing support and capital. Interventions in this second mode, like the first, shall feature social capital formation and organizational maturity development to make organizations and enterprise formations operationally and organizationally viable. The interventions shall apply in all sectors feasible – agriculture and fisheries (on-farm, on-boat and off-farm/boat activities), non-farm sector, industry (home and community-based), small businesses and enterprises, services sector, trade and commerce, ecological-tourism, etc.

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Chapter

4 Local Governance

nalysis of the capacity and capability of the local government units (LGUs) in the municipalities covered by the study and their respective home provinces is undertaken in this chapter. An assessment of the development philosophy/vision of the current local chief executives (LCEs), LGU development plans,

investments, development resources and their set-up for development using strengths-weaknesses-opportunities-threats (SWOT) approach is done, keeping in mind the importance of these factors to local economy development. Local governance capability and capacity in helping build local economies are thus gauged both at the provincial and municipal levels, giving indication on the feasibility of the local economy building in the island of Samar.

Institutional Assessment of LGUs

The inventory and examination of LGU development vision, philosophy, interventions and institutional capability yielded certain features that will guide the formulation of the blueprint and the specific roles played by the local governance sector in local economy building. The data and information gathered from the formal semi-structured survey questionnaire and key informants are indicative of the situation of the local governance sector in the selected Samar LGUs. The survey, however, is limited to the following LGUs: provincial governments of Northern and Eastern Samar, municipal governments of Lavezares, Mondragon, San Jose, Borongan, Guiuan and Mercedes. Political Profile Rapid profiling of the political leaderships indicate that: (a) politicians from the liberal party dominate Northern Samar LCEs (provincial and municipal levels) and most of them are either in their first- and second-terms of office, (b) Eastern Samar LCEs come from various political parties mostly from Lakas or Lakas-NPC coalition. This political landscape indicate that development entities intending to introduce development interventions would have to deal with local political leaderships that support the administration and those that are on the side of the opposition. In practice, pro-administration LCEs have better access to development resources emanating from the national government. Access of LCEs and LGUs to other development resources particularly the Countryside Development Funds (CDF) or the so-called “pork barrel” also depends on the relationship dynamics between the LCEs concerned and their respective congressional representatives. The LCEs in Northern Samar aligned with the Liberal Party may benefit from the development resources of the Provincial Government in as much as the current provincial governor is from the Liberal Party. LCEs in the pilot areas in Eastern Samar in turn may be in a better position to gain from the resources wielded by the present administration. In both provinces, there are also partnerships and development assistance offered to LCEs by party list congressional representatives. Samar’s representation in Congress with the ascendancy of the An-waray Party List Group is a great opportunity to generate legislative and resource support. Overall Development Orientation and Stake All the LCEs have a keen understanding of how much far behind their communities and constituents are in terms of development status compared to other areas in the region and the rest of the country. The LCEs and their respective municipal/provincial socio-economic profiles also speak of the pervasiveness of poverty among the local populace. The LCEs who regularly attend conferences in other areas and interact with other LGUs have a sense of how backward Samar municipalities are relative to their counterparts in Luzon and Central Visayas and major cities in Mindanao. In other words, the prevalent development missions of these LCEs gear towards strategies to, at the very least, approximate in modest terms the development status of their more affluent

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counterparts. Their stake revolves around making their poor constituents less poor by feeding them and providing livelihood, make their areas conducive and attractive to moneyed investors who will bring employment and making their communities peaceful. Development Capacity and Capability Most LCEs in the pilot areas are new or second term officials. Some are traditional; some are young and come from a dynamic background. The survey provides limited insights on the personal technical capabilities of the LCEs. However, the LGU staff training needs assessment indicates that the LGUs have acknowledged their inadequacies in technical skills that are valuable in development planning and investment programming. Thus the ideal situation where the LGU technical staff provides LCEs the well-thought technical alternatives and scenarios to come up sound policy decisions on development plans, programs and their prioritization maybe wanting in the surveyed areas. All of the LGUs are wanting in development resources and finances to invest in necessary development infrastructure. Most of these LGUs are 4th to 6th class municipalities (except for the capital town of Borongan and 3rd class Guiuan), or low-income municipalities who rely heavily on national, regional, and provincial assistance to finance their poverty reduction programs and development needs.

Specific SWOT Analysis Findings

Strengths

1. There are development-oriented local chief executives in the pilot areas and provinces and are reflected in the formal LGU development documents. Their plans, programs, projects and public investments indicate the development orientation along the following sectors: health and nutrition, public infrastructure and economic facilities. The vision, plan and investment consistency is prominent in the municipalities of Guiuan, San Jose, Borongan and Mercedes.

2. Development vision and philosophy of the local chief executives in the pilot areas are pro-poor and

development oriented.

3. Majority of the LCEs are first or second term officials, making a medium-term development engagement with them possible. Political assessments indicate that most of them have high chances of re-election.

4. Three (3) of the LGUs have track records in partnership and interfacing with NGOs in the areas of

environment protection (Guiuan), women (Mercedes), sustainable development, agribusiness, and microfinance (San Jose).

5. Guiuan, Mercedes and San Jose have active development councils and technical human resources and

staff exposed and trained in participatory planning processes, project planning, management and implementation of development projects.

Weaknesses

1. Most of the LGUs come from low-income municipality classes and have limited financial capacity and technical capability to satisfy most of their public investments for the poor households and other poverty reduction programs and projects.

2. Most of the LGU plans and investment programs are in broad strokes and in generic terms. Development

priorities that have impact on the poor lack the specificity in relation to target households and their specific locations. Prioritization criteria used in the program and project line-up is unclear, if ever a criteria or system of prioritization used. The LGUs have acknowledged these weaknesses and some manifested

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their need to beef up their technical capability in development planning for poverty reduction in their respective localities.

Opportunities

1. There are considerable number of foreign-assisted projects that the LGUs may tap for local development and poverty reduction. The development menus of these FAPs are usually supportive of poverty reduction and local economy building objectives. The development resources offered by these FAPs come in the form of capital assistance for infrastructure (bundled with provision of local equity in kind or in cash), credit and microfinance, community and institutional development, local project management, and other sector-based assistance.

2. A number of municipalities have attracted the attention of private external investors in the areas of coastal

resource management, eco-tourism, and agriculture/agri-procesing and may provide opportunity for capital infusion into the localities (i.e., San Jose, Guiuan and Borongan).

Threats

1. Timely availability of financial resources due from the National Government given the political and fiscal crisis may hamper the LGUs’ implementation of development programs for the poor.

2. There has been progressive decrease of grants from the National Government particularly in financing

devolved functions and responsibilities. These are in the areas of small and local infrastructure like communal irrigation, farm-to-market roads and potable water supply.

Institutional and Organizational Support to Local Governance from the

Regional Level

Regional and local development planning, governance and development administration in Samar is under the regional development council (RDC) system. The RDC system is in turn under the Philippine economic planning system and structure steered by the National Economic and Development Authority (NEDA). The President heads the NEDA Board, which is composed of the cabinet. The NEDA is composed of major planning jurisdictions -- national/macro and sector planning and area-based regional development planning. RDCs are organized all over the country and are in-charge of coming up with regional development plans.

The most comprehensive development plan that guides the development of Region 8, of which the three Samar provinces are covered, is the Eastern Visayas Regional Development Plan (RDP) and its companion development plans. The entity that makes operational the RDP is the Regional Development Council (RDC) where all governors, mayors, regional line agencies and NGOs sit as a whole and/or through sectoral committees, charts and coordinates the implementation of the RDP. The National Economic and Development Authority (NEDA) Regional Office 8 serves as the technical secretariat and vice chair of the RDC.

The scope of the RDC is the regional economy and rarely focuses on local or much less community economies. Major development concerns usually gravitate around resolving regional or crosscutting sectoral or cross-provincial issues. The RDP focuses on the region-wide development and its integration with the national economy. In some ways, its regional focus dissipates development efforts from the three (3) Samar provinces. In other ways, the backwardness of the Samar island economy simply cannot compete with the more competitive sectors of the other provinces, notably Southern Leyte and Leyte that is host to the regional capital, Tacloban. The NEDA, which is technically equipped and competent to undertake local economic planning, has no presence at the provincial or the local level.

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The development scope of the LGUs (three provincial governments in the Samar provinces, the mayors and municipal governments therein) are limited to their respective jurisdictions. They have good provincial/municipal development plans that are consistent with the local economy-building framework but as the survey of LGUs in the blueprint’s baseline study shows, their respective development councils and development planning offices lack the financial, material, logistical and technical capability to undertake local economy building. At this level of capacity and capability, the LGUs need to forge partnerships and tap the expertise and resources of business, private sector, civil society and development technicians in stimulating their respective economies. All by themselves, the current pace of change and development will not alter much.

Samar Local Economy Building and Local Governance

Helping build the local economies of Samar will require two general modes of undertaking. First, there must be political acceptance of the model and adoption by way of policy enactments by the covered LGUs. Second, there must be development planning and investment programming assistance to LGUs and close coordination with respective LCEs (provincial and municipal) to guide them (“hand-hold” them for local economy building) on the development path towards local economy building. The first mode will open partnership possibilities and provide the overriding legislative mandate to operate within the communities and constituents of the LGUs. The second will in turn respond to the technical needs manifested by the LGUs and enable their respective LCEs to face an array of well-thought spectrum of development alternatives and options that efficiently and effectively uses available local and external development resources for poverty reduction and local economy building.

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Chapter

5 Civil Society Organizations

his section examines civil society organizations in Samar and their role in local economy building. The analysis focuses on the strengths, weaknesses, threats and opportunities (SWOT) and the possibilities for partnership for local economy building. The details on the profiles and nature of civil society organizations,

non-government organizations and people’s organizations are found in the baseline, which is companion document of this blueprint. The analysis done considers the political situation in Samar Island, a discussion of which is also found in the baseline. A discussion on the opportunities for civil society to work with the different actors in local economy building ends the chapter.

Civil Society Organizations in Samar

Strengths

The presence of POs and NGOs in Samar is a positive indication that there are efforts, other than that of government and private business, to address the various development needs of the people of Samar. The existence of peoples’ organizations implies that there are attempts among Samarenos themselves to collectively address their problems and change their conditions in an organized manner. The presence of small organizations down at the barangay level (as in the case of those interviewed in Northern Samar) though quite small in terms of memberships, represent the existence of core groups at the grassroots level that can or may be tapped later on to better promote political and economic development. Based on answers from the survey and on the number of organizations found to be present in Samar, people seem to have a trust or belief that being organized would mean a better chance of achieving positive change or development. The presence of NGOs as well means that there are initiatives to support and harness efforts by local people to self-organize.

One strong feature of the CSOs found among them is that their nature or concerns is mostly to tackle basic issues presently requiring much attention in the island– livelihood and sustainable development, protection and preservation of the environment and lack of social services. There are a number of cooperatives already existing in the island as can be seen from the list, both secondary and first hand data. At the same time, while it is true that economic requirements had to be addressed, the need to protect natural resources from abuse to ensure long term use of natural resources are also of equal importance.

The programs and services of various NGOs and POs, if ever these are present and delivered

properly (for lack of data to confirm them), are of huge help to the people of the three provinces of Samar. The training and education they provide, the social services they extend, the awareness they help create, the finance and other logistics they able to mobilize are all inputs to the local people of Samar that could help them change their situation and heir environment. These are the very strengths that POs and NGOs in Samar possess that should be developed and harnessed further. Through these programs and services, they are able to earn the trust and confidence of the Samareños. Their existence offers people immediate or short term answers to their needs and assist them further in finding alternative solutions to poverty. Through these programs, they are able to reach and mobilize a greater number of people.

In terms of mobilizations, the politically oriented POs and NGOs have demonstrated capabilities in this regard, but of course for a different purpose. This shows in the various forms of mass actions they conduct to air and advance their causes. To have such type of groups is also an advantage for Samar as they could act as awesome pressure group, something that most of the POs and NGOs gathered are not yet able to do. They also have strong links with other political groups outside of Samar and their own network of development institutions and organizations to rely on.

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Consciousness wise, a significant majority (63%) of the CSOs are aware of their role in pursuing

development either through the promotion of sustainable economic activities or advocating for the preservation of natural of resources. Such awareness could and should be maximized in pursuing development activities for the island Weaknesses

Strength of peoples’ organizations lies in membership -- their numbers, how many are active and the level of consolidation they have achieved. If we take into account the findings of the survey, there is great inadequacy relative to these concerns. Total membership for the 12 POs that were part of the survey is only about 375. One group, the Save Manicami Movement (SMM) declared a membership of 200, all active, which is way above the average number of membership of the POs of about 15 and is quite an exception. Membership participation or activeness in the organization is only 44% for Northern Samar and about 51% in the Eastern Samar if we exclude the SMM membership in the total.

In any case, adding to this dilemma is the seemingly low organizational appreciation and functionality. For one, members are not that familiar with the objectives of their organizations and how the same translate into concrete programs and actions. Second, most POs have only their set of officers to show in terms of organizational structure. Tasks that need execution seem to be at a limbo when you try to look at their structures. There are no existing committees whatsoever to handle recruitment of new members generate and manage resources, education needs of its members and relations with other organizations. Third, most groups rely on their heads to run and manage the organization. Mainly leaders of the POs. likewise control programs or projects. Last, consolidation is far from achieved, given the fact that membership is very small. Misunderstandings, poor attendance to meetings, bickering are some of the common problem cited as to why their group has not achieved its goals.

On the part of the NGOs, their organizational appreciation is not that very far from the POs. Answers on objectives were either not clear or incomplete though they were all able to enumerate their programs. This is rather unfortunate, as NGO personnel should be familiar with the workings of their respective agency. The three councils that interviewed reflected a higher level of organizational maturity as objectives and programs were comprehensible, structures with specific committees were clearer and defined regularity of meetings. Their only advantage compared with POs would be that they have programs and services and better funding source (because of better linkages) resulting in more assets and better equipment.

Cooperation and communication between and among POs and NGOs seem to be poor or somewhat lacking as reflected in their responses on this matter. It was rather rare to find a PO or an NGO interviewed, that has link or relation with another. Opportunities

The existence of POs and NGOs presents an opportunity for a relatively much easier way to reach, influence and mobilize people to act and/or improve their situation. These POs and NGOs have already built links with the grassroots that are supposed to be targets and beneficiaries of development efforts. It could also be the best chance to pull together all this organizations, POs and NGOs, to work together for a common goal since most of their objectives are essentially the same. Such unity would be to the advantage of the people of Samar as this could help in attracting more investors in development efforts.

Obviously, the most common of the CSOs are those involved in sustainable development and socio-economic activities. There are 43 of them concerned with reducing poverty in the island and are spread strategically for such purpose – from barangays to municipalities to provinces. What they offer clearly is machinery that is already in place in strategic positions. The NGOs have their programs and services while the POs can serve as the links to people at the grassroots level. The private foundations and

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other NGOs of Eastern Samar have such programs to offer and the peoples’ organizations from both provinces are still relatively active to be able serve as the line to reach out

The interest of the small POs in San Jose, Northern Samar are leaning towards addressing economic needs as reflected in their responses on programs and other services. In this case, it would not be difficult to rally them behind a common goal of economic and social welfare agenda. Threats

There are two main threats to development efforts in Samar, one is natural environment and the other on is the political environment. The island sits right along the country’s typhoon belt and as such making it highly vulnerable to natural disasters and other calamities. Economic underdevelopment coupled with consistent threats and damages from nature or natural disasters always put achievements by POs/NGOs under threat of negation more especially on the eastern side of Samar. However, according to some observation, Samar has been relatively free from direct typhoon hits compared with Luzon. Despite this, it being regularly near typhoon paths indicates that it is more prone to the ill effects of such calamities. Rampant and continuous abuse and exploitation of forest and other natural resources contribute more to the dilemma.

The political environment on the other hand threatens to curtail the growth of CSOs and prevent people from being or getting organized to pursue changes the way they see it fit.

Conclusion

There are quite a number of CSOs in existence in the island of Samar and are situated strategically for mobilization for various development purposes. The location distribution of NGOs and POs in Samar Island presents a positive opportunity to reach a significant segment of poor communities in the area. They are can be found in barangays, some are operating at municipal levels and a few covers province wide. In Northern Samar, for example, the women’s health organizations of the five barangays of San Jose town is an indication of the existence of small but organized groups catering to specific needs of people in their respective communities. The five organizations plus one program already presents a potential to reach some1,237 households or 6,138 poor populace (based on population statistics from the NSO as of year 2000) of Northern Samar. This is already equivalent to 45.25% of the entire population of San Jose town.

Almost the same can be said with the Eastern and Western Provinces, where one-third and two

thirds (of CSOs gathered) respectively, of organizations identified are barangay or community based groups and complimenting these groups are municipal and provincial-based organizations. The POs in Eastern Samar has the prospective to reach some nine thousand people while there are 16 POs existing in eight of the 26 municipalities of Western Samar.

The more important factor common among these organizations is their interest with projects and/or

programs that could help improve the lot of the people in Samar that is socio-economic and sustainable development. By the very nature of the majority of these organizations, they are very much interested, at the minimum, to activities that would help their membership find ways to supplement their incomes as proof of the actual programs and activities these organizations are involved with as shown by primary data. Secondary data also shows the presence of a good number of cooperatives in this province which are essentially grassroots organizations working for economically uplifting its members. Moreover, complimenting above factor are those groups whose principal goals are on ensuring the protection and preservation of much needed natural resources.

However, most activities by POs are still relatively low and unconsolidated to be able to make a bigger and upbeat impact on the lives of the Samareños. In addition, the growing repressive political climate in the island could hinder whatever efforts CSOs may want to pursue, political or otherwise.

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Exploring Opportunities of Working Together

Given these backgrounds and the present condition, political and economic including status of CSOs in the island of Samar, the need to discover better and more effective ways to achieve development becomes more critical. NGOs and POs should therefore explore more possibilities and other avenues that would increase their abilities to reach out to a larger number of the local populace including that of asserting its role in pursuing real development.

NGOs can initiate/facilitate dialogues between POs, government agencies or institutions and the business sector in coming up with a more unified approach to addressing poverty and in stirring local economy. Finding specific areas of cooperation, defining roles, setting of common objectives are just some of the things that needed to be established. For example, the POs and the LGU of San Jose town are both interested in implementing livelihood projects essentially for the same purpose – to generate supplemental incomes for its constituents, but such concerns by both parties seem to be far from finding each other. The PO’s are still looking for supplemental livelihood projects while its local government is already into aquaculture, vegetable gardening and culturing mushrooms (based on data gathered from the LGU’s own website). POs can take the initiative of establishing mechanisms as to how local organize groups and other locals can avail from such program of its local government and even help it promoting it. NGOs, in turn, can help POs prepare in handling such type of projects through provision of necessary skills and finding appropriate technology to help achieve sustainability. NGOs can provide inputs such as giving skills training in handling small businesses and financial management. The business sector on the other hand can help through the provision of much needed capital and in developing market as well as corresponding strategy, for selling all the produce.

In the town of Borongan, its local government is pursuing tourism as a strategy to achieve economic development while the local NGOs and POs are advocating for the protection of Mother Nature. A common ground both beneficial but still consistent with the tenets of sustainable development can probably be reached, if again for example, these two groups would pursue defining areas of cooperation and complementation. Local government can still make necessary investments to develop and promote local areas for tourism while NGOs can still help in monitoring and safeguarding natural resources. Again, NGOs can take the initiative in establishing working relations with the local government. Areas of cooperation can start by offering their own areas of expertise as a starting point. Two of the NGOs in this town focus on promoting sustainable development and provision of skills training at the grassroots level and the one PO can take the lead in proposing specific guidelines in protecting the environment with consideration to locals finding additional incomes in the area.

The same is the case with the town of Guiuan. Its local government is both into developing livelihood and local tourism while CSOs are into promoting sustainable development with due consideration in protecting the environment.

In effect, CSOs can serve as machineries for reaching a greater number of poor people in Samar. Nevertheless, NGOs can also serve as an alternate source of help for local people in finding viable and sustainable means of livelihood. POs on the other hand can serve as avenues for people to help each other find solutions to their common problems and handle it in a collective manner.

CSOs should also look into ways how it can consolidate further its own ranks in order to prepare them to handle bigger responsibilities and tasks in pursuing and managing real development.

CSOs with strong political advocacies should continue playing its own role and pursuing its own set of objectives as their agenda offers a larger frame in pursuing local development in the island of Samar.

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Chapter

6 Development Financing

Institutions

inancing for the improvement of the living status of the poor and developing the local economy is an essential feature of any meaningful development undertaking. Financing here refers to funds that serve as capital (loan or grant) for economic and enterprise activities coming from varied sources/nature: the government, semi-

government, private sector and non-government organizations, formal and informal entities. This chapter analyzes the development financing landscape in Samar. The analysis stems from the results of the survey done on development financing institutions and related entities.

Major Characteristics of Financing Entities

Profile and Nature The dominant financiers in the surveyed pilot areas are private entities. These include individuals from the informal sector (usurers or the so-called “five-sixers” or individuals, relatives of borrowers), and the formal sector (small private lending investors). The second dominant entities are the major development financing institutions (Landbank and the Philippine National Bank) and NGOs/Microfinance institutions. There are footloose minority financers – cooperatives, church-based organizations, and limited number of rural banks.

The profiles and nature of financing entities (“suppliers”) is indicative of the nature of the demand for capital or funds. In this case, there is a lean demand for big-ticket economic activities requiring medium to large-scale financing. The predominance and high frequency of private, small and informal lenders indicates a demand for small, personal and emergency financing needs that are rarely investment forming or value-adding. The presence in urban centers of Landbank, DBP and other government financing institutions that have known portfolios for farmers, fishers and agriculture-related enterprises, is a development opportunity to start with. Development efforts can start devising ways how to make these portfolios accessible to the poor and enterprising poor. Clientele and Assistance Extended The clientele assisted and nature of financial assistance is consistent with and matches the above profile of financial providers. The clients assisted come from quite a varied lot – women, teachers/pensioners/salaried employees, and existing members of cooperatives and “any interested individual”. There are limited small businesses/microentrepreneurs reached. There are no medium or large-scale enterprise clients coming from the emerging community entrepreneurs from among those assisted by development financing entities surveyed (save probably the unnamed major borrowers and institutional entities serviced by the LBP and DBP). Majority of the clients are individuals borrowing for personal needs, small businesses and petty, multi-purpose causes. There is a clear dearth in development finance demanders who are into an organized enterprise that have at the very least, a simple system of enterprise organization (i.e., organized group of fisherfolks, coconut gatherers, rice farmers, etc.). Finance Portfolio and Cost of Borrowing Among the surveyed development financing entities (except for the LBP and DBP), the borrowed amount of the clients served is generally low and micro. Loans amount range from P1,000 to as high as P300,000 – amounts that usually fend for personal and small needs. The cost of borrowing ranges from 2 percent per month to as high as 20 percent, with the latter obviously charged by usurers.

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Specific SWOT Analysis Findings

Strengths 1. Borongan and Guiuan in Eastern Samar and the pilot areas near Catarman in Northern Samar have access to

formal government and development financing institutions such as Landbank, Development Bank of the Philippines and Philippine National Bank.

2. There are formations in the pilot areas that indicate pooling of resources of individuals to create credit

cooperatives and credit unions. 3. There are small financing institutions that offer training and orientation programs to clients; repayment rate

ranges from 75 to 100 percent with the average of about 90 percent. Weaknesses 1. In most of the pilot areas, there are very few formal development financing institutions with limited array of

development services that are easily accessible to poor households and enterprising poor. Only the municipalities of Borongan, Guiuan, San Jose and Lavazares have access to formal development financing institutions/microfinance institutions.

2. There are a considerable number of informal private lending entities who cater to the financing and credit

needs of the poor in the pilot areas.

Opportunity Given the significant number of informal financial entities who serviced the financing needs of clients in the pilot areas, there is a demand-supply gap for small, accessible and affordable development financing from formal financing entities in the said areas.

Threat The limited number of small development financing/microfinance institutions in the area may indicate the high-risk nature of putting up such investments given the perception on the peace and order situation and disaster vulnerability of the area.

Development Financing Entities: Findings and Insights

Development financing entities in Samar, particularly those that are formal and with established portfolios for development are serving a lean, limited and narrow market. The type of financing currenly demanded is small and informal. Their reasons for borrowing are typically for multi-purpose causes, personal and emergency in nature. These demanders are typically situated in the rural areas or located far from the capital towns. Even if government banks and financing institutions have available portfolios, they are inaccessible to the target clientele and/or the target clientele are not entrepreneurially and organizationally ready to borrow at a developmentally relevant mode. The current situation in Samar, particularly in rural areas and off-capital towns, favors informal lenders. They are mobile, accessible to clients but charge very high cost of borrowing to demanders; neither are they developmental. Thus, there is a demand for development financing institutions that are accessible, affordable and educational/developmental for the small borrowers in Samar -- a development financing entity that shall pose as a better alternative to usurers.

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Encouraging development financers whose products and services are accessible, affordable and empowering to small borrowers is one side of the spectrum. On the other side, the nature of the demand for loans should transcend petty and personal activities to more developmental, value adding and entrepreneurial endeavors. This necessitates a two-tiered and two-phased shift in both development financers and demanders. Development financers customize and make their financial products and services for: (a) micro, small, individual borrowers and (b) organized borrowers for development, value adding and enterprising/innovative ventures. The organized poor and enterprising poor (both individuals and organizations) or the “demanders”, while recognizing their current low borrowing capacities, should veer towards a development path that go beyond petty borrowing to enterprise-forming projects. For the development financiers, the adjustment in strategy in Samar will be easier. This cannot be said for the poor and enterprising poor. They need to interface with LGUs, NGOs and the private sector – the other pillars of poverty reduction and local economy building. Thus, the challenge: Address the needs of the poor quickly and in a sustainable manner, and move from subsistence to enterprising ventures that proliferate collectively towards vibrant local economies.

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Chapter

7 Private Investments and

Remittances

rivate investments are essential in building and making local economies grow. Whether these investments come from external or internal sources, they nevertheless offer resources that help create more value adding ventures and other multiplier effects. It is difficult to achieve economic development without private capital

flowing into the economy and invested in worthwhile and sustainable businesses. The local economy-building model seeks sustainable poverty reduction, driven by a critical mass of empowered local people and entrepreneurial class. While private investments are a factor to make the model work, they need to be aligned and consistent with sustainable development principles, pro-poor and engendering local capabilities. Overseas Filipino remittances are a form of private investments that, if attracted, flowed and aligned according to the principles of local-economy model, can bring in the needed resources that are sustainable, pro-poor, and locally empowering. Unlike private foreign investments, remittances flowed by Filipinos come with natural attachment and stake holding for the local communities. This chapter examines the potentials of private investments (internal and external) and remittances of overseas Filipinos in helping development the local economies of Samar.

I. Small Private Investments in Northern and Eastern Samar

Private investments generation is an important step towards poverty alleviation. First, it provides employment opportunities that are necessary to increase monetary incomes among poor families without being a burden on government finances. Second, it gives income to governments that, in turn, should create complementary projects for the poor that are beyond the scope of private business. Third, it opens new area or type of production, thus putting a “value-added” to the local raw materials. The impact of private investments is evolving. Once a business rises in one community it stimulates other investments to come in.

In this country, where poverty is in abundance and government has proved to be incapable of solving this problem if not exacerbating the situation, clearly there is a need to stimulate more investments from the private sector. However, what government does is to put more emphasis on attracting foreign investments that is not so keen on coming to this country because of the so-called problem of peace and order situation. Local investors, as well, face tough problems. Studies by the Asian Development Bank (ADB) show how corruption, lack of adequate physical infrastructure and excessive bureaucracy have deterred the business sector from establishing a base of business here.1

In terms incentives, government led programs for

business skew towards big investors. Small business owners, particularly those into microentreprises, have to contend with the crumbs of the pie. Even some programs intended for the poor have been channeled to those who are better off. World Bank studies have concluded that it is usually those belonging to the higher income strata or social standing who are able to benefit from the credit

1 The ADB led study entitled “ADB business survey highlights areas to improve investment climate” (20 January

2005) was conducted in with establishments in the Philippines. Thirty-four percent of the respondents identified

corruption as a major threat in business expansion. In particular, 41% of those who are in the textile business

complain of the severe negative impact of corruption in their business. In terms of infrastructure, the business

sector aired power failures as the culprit to their loses that on average amounts to 8% of their production.

Similarly, the lack of paved roads and maritime transport was identified as another deterrent in their production.

P

Table 1 Year 2000 per capita poverty threshold & incidence of poor families (in %) Philippines 28.4 Region 8 37.8 Eastern Samar 47.3 Northern Samar 40.7

Source: NSCB

41

program that are originally intended for the poor.2

The role of credit and information. A study by the International Labor Organization (ILO) identified access to credit, and training and information as crucial in enticing small and medium investments (SMEs) or in the expansion of existing small businesses. While the samples were all taken from Thailand, nevertheless, the result of the study also reflect the experience of other developing countries like the Philippines.

What is revealing in the ILO study is the fact that almost all of the SMEs surveyed have procured credit not from banks or other formal credit institutions to build and expand their business. Capital usually come from savings before venturing into business or was set-aside during high-income season for those that are already in business and wish an expansion. According to this study, this is what happens when formal credit is simply inaccessible to smaller investors. This means that the requirements and charges of banks or other formal lending institutions are beyond their reach.

The results of this ILO study are almost a photocopy of the outcome of local researches on credit for the poor done locally. High interest rates, and too much paper works and document requirements have deterred small rural producers away from banks. Instead, they normally opt to secure credit from informal sources that charge higher interest but do not require any documents. Apart from this, there was an inherent fear among the respondents to borrow from formal sources, particularly from government lending programs that they might go to jail if they are unable to pay their loan.3

Those that are into micro enterprises (and/or what is dubbed as the informal sector) find it difficult to obtain credit from formal sources not because they have no capacity for repayment. Instead, very few sources of credit are willing to lend them money for lack of formal documents and accreditations.

Among small and microenterprises, capital expansion is important to be able to diversify the type of activities and the products that they sell. In fact, a major concern on the state of small and medium enterprises in this country is their significantly low value added contribution. According to the Chair of the Small Business Corporation Zorayda Amelia Alonzo the contribution of the SMEs is more towards the provision of labor and hardly in the creation and processing of raw materials, and the operations are hardly mechanized.4 Table 2 Contribution of SMEs vs. Large Enterprises in Some Asian Countries

Indicator Philippines South Korea Japan China Employment 67.0% 69.0% 78.0% 74.0%

Value-added contribution

32.0% 46.0% 56.0% 60.0%

SME Population 99.6% 99.0% 99.0% 99.7%

The MODE survey on small private investors

From March to April 2005, MODE conducted a survey on the needs and views of active and inactive small private investors on how the investment climate in Samar can be improved. Eighty-five (85) representatives (42 % are males and 58 % are females) from the different local businesses participated. The respondents hailed from the municipalities of San Jose (29.4 %), Mondragon (23.5%), Lavezares (23.5%),

2 World Bank (1998). “Apoyo a pequeñas empresas.” Precis no. 173. Primavera 1998.

3 Leyesa, Daryl (2003). The state of Philippine rural women. Presented during the 1

st Rural Women’s Congress in

Taguig, 18 October 2003. Philippine Peasant Institute.

4 Zorayda, Amelia C. Alonso (2002). “The SME Development Plan and the Role of Rural Banks.” Helping Build

Local Economies. Pp. 264 to 265. Originally prepared for the Rural Banks Association of the Philippines 2002

Annual Corporate meeting and the National Convention held at the Xavier Estate, Cagayan de Oro City on 17-19

April 2002.

42

Table 3 Reason why they are no longer in business?

� They have found other sources of income and cannot find any person who is responsible to take over 8

� Age and health reason 3 � Lack of capital 2 � State of the economy 1 � High cost of inputs (including electricity) 1

Guian (12.9%) and Borongan (10.5%). Majority of the respondents were business owners (86%), while a small percentage were managers (9.4%) and salespersons or clerks (1.17%).

Figure 1. Distribution of business

size according to annual labor cost

0

200000

400000

600000

800000

1000000

1200000

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al

lab

or

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Majority of those interviewed were into the retail business (89.4%), and the rest are into food and restaurant (5.88%) and insurance business (4.7%). More than half of the respondents are no longer active in the business sector (61.17%). However, clearly, majority of them want to go back (76.47%). When asked for the reasons behind closing shop, the number one reason cited was that they are able to find employment that pays more than their business. However, they still want to continue with the business while maintaining their present work, they find it hard to find some one who can manage in their behalf (see table 3).

Government incentives. The respondents were asked what types of incentive government should

provide to boost investments in Samar. The number one answer was capital assistance. It seems the major obstacle among potential small investors would be the difficulty of attaining credit for capital-built-up. The results of the survey attest that informal sources of credit such as neighbors and relatives remain the major source of capital even for relatively larger businesses.

Another issue cited was the peace and order situation in the provinces that deter potential investors from building their business there. The impact of an increase in taxes (the increase of the Expanded Value Added Tax from 10% to 12%) and the prices of production inputs, such as petroleum prices, as discouraging to the business community. As well, the erratic power supply is a major concern among the business owners.

The role of the NGOs. Most of the respondents are very much concerned about continued

patronage for their stores. The competition among them for such a small market in the two provinces

Table 4 What type of incentives should government provide to businesspeople? � Capital 25 � Peace and order 21 � Less taxes (VAT, business taxes) 12 � Control on prices (i.e. petroleum) 10

Better power supply 9

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compels them to call on the different organizations in civil society for assistance in advertising their store and the products that are made in their municipalities.

Secondly, they hope that the NGO community will be able to provide help in credit procurement for added capital. A quality that the proposed credit program should have is low interest. Similarly, the respondents hope that NGOs will espouse a savings trainings program to make it easier for their clients to pay their debt to their stores.

In addition, the third most frequent answer was technical assistance in terms of producing new items that may enable them to expand their business.

The impact of investments in Samar. A range of variables was given to the respondents to know

their perception on how it will be affected by local investments. In terms of growth in local employment, the majority (66%) agrees that investments will bring more job opportunities. Though there was a smaller number (19%) who disagreed on the basis that normally businesses in the provinces are small that they usually employ family labor.

The rise in investments is said to produce a multiplier effect. That is, once a business is established its very presence stimulates other small entrepreneurs to come into the market, either as competitors or as complementary businesses. Fifty-eight percent (58%) of the respondents affirmed this scenario. Nevertheless, 23% were uncertain whether this will be the case and opted not to give any remarks. The remaining 19% of the respondents do not believe that the entrance of new private investments will be enough to entice small entrepreneurs to go into business.

They were also asked whether going into business means greater capital accumulation for the households. Clearly, the majority (61%) said yes, but almost a quarter of the respondents (23%) choose not to answer this question. Only 15% said no.

Similarly, the respondents were unsure whether an increase in investments in Samar would lead to a growth in agricultural production. The majority (47%) chose not to give a response to the questions whether investments will have a positive effect on the local agricultural sector. Nineteen percent (19%) gave a negative answer saying that the types of businesses are normally not related to agriculture therefore they do not have any impact on the farming sector. The remaining 34% however are hopeful that whatever investments come in their province will be able to use their agricultural products as raw materials or at least increase the consumption of agricultural products of those who will be employed by the new businesses.

They showed the same pattern of responses when asked whether they believe that new investments will be more environmentally friendly. More than half of the respondents (55%) were unsure and chose not to give a response. Thirty-four percent (34%) said yes, while the remaining 19% said no. Table 6 Will investments in Samar create a positive or negative effect on the following

Variables Yes No No response

Local employment 56 (66%) 16 (19%) 13 (15%)

Growth of local entrepreneurs 49 (58%) 16 (19%) 20 (23%) Accumulation of capital for households 52 (61%) 13 (15%) 20 (23%) Growth in agricultural productivity 29 (34%) 16 (19%) 40(47%) Lead to a more ecologically sustainable form of production processes

26 (30%) 12 (14%) 47 (55%)

Table 5 What should be the role of the NGOs Advertising and advocating for the procurement of locally produced products 27 Credit and capital (including savings training, etc) 26 Technical assistance on production 13

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The informal sector in Samar. Government statistics are unable to capture the extent of the

informal sector in the country. For one, the fact that they are not registered with formal public institutions makes it very hard to find out exactly their population size. In broad strokes, those belonging to the informal sector would be those that are engaged in informal labor or enterprise that is unregistered with national government offices, such as the Bureau of Internal Revenue and the Securities and Exchange Commission, that hires up to ten people or less but mostly employ unpaid family labor. They can be ambulatory or home based. 5 ILO data suggests that more than half of local entrepreneurs would fall under the informal sector. Of those engaged in business, micro entrepreneurs and their employees who are in the informal sector are in the most disadvantaged position. One, their lack of accreditation makes it impossible to procure formal credit and training. Two, very few of them, if at all, have upstream linkages with formal investors that might be able to use their products as raw materials or for further sales. Given the situation, very few of them are able to expand and go into the next stage as small formal entrepreneurs.

In Samar, NSCB data say that there are more families obtaining their primary income from entrepreneurial activities. Table 7 indicates that both for Eastern and Northern Samar that for every family that depends on wages, there are almost two families that earn from micro enterprises. However, clearly, the majority of entrepreneurial families are involved in agriculture related ventures. Their annual earnings indicate that these non-wage earning families are mostly part of the informal sector. In Eastern Samar, the median income of these families are between PhP30,000 to PhP59,999 annually while in Northern Samar it ranges from PhP30,000 to PhP39,999.6

5 ILO characterizes the informal sector as :“..very small units producing and distributing goods and services, and

consisting largely of independent, self-employed producers, some of whom also employ family labor and /or a few

hired workers or apprentices; which operate with very little capital, or none at all; which utilize a low level of

technology and skills; which therefore operate at a low level of productivity; and which generally provide very low

and irregular incomes and highly unstable employment to those who work in it. They are informal in the sense that

they are for the most part unregistered and unrecorded in official statistics; they tend to have little or no access to

organized markets, to credit institutions, to formal education and training institutions, or to many public services

and amenities; they are not recognized, supported or regulated by government; they are often compelled to

operate outside of the framework of the law, and even where they are registered and respect certain aspects of

the law they are almost invariably beyond the pale of social protection, labor legislation and protective measures

at the workplace. From Ya, Sandra (2001). ILO and the challenge of the informal work. Draft copy. ILO, p. 2.

previously quoted in ILO (1991). The Dilemma of the Informal Sector. ILO, Geneva.

6 NSCB (2004). Annual Statistical Yearbook.

Table 7 Primary Source of family income for the year 2000 Eastern Samar No. of families Total entrepreneurial activities 31,551 Agri-related enterprises 24,481 Non-agri enterprises 7,070 Wages 17,935

Northern Samar No. of families Total entrepreneurial activities 50,425 Agri-related enterprises 37,304 Non-agri enterprises 13,121 Wages 30,541

Source: NSCB 2004

45

Annex A: Summary of tables Respondents: Sex No. % Male 36 42.3 Female 49 57.6

Total 85 100

Municipality No. % Guian 11 12.9 Borongan 9 10.5 San Jose 25 29.4 Mondragon 20 23.5

Lavezares 20 23.5

Position in the company No. % Manager 8 9.4 Owner 73 85.9 Sales clerk 1 1.17 Others 1 1.17

No answer 2 2.35

Sector No. of responses % Insurance 4 4.7 Retail 76 89.4 Food and restaurant 5 5.88 Others 1 1.17 No answer

Whether in business as of present time or not Response No. % Yes 33 38.8 No 52 61.17

Among those who are no longer in business but wanted to return to business Response No. % Yes 39 76.47 No 12 23.53

Total 51 100

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II. Investment Potential of Remittances

Overall Situation Analysis on OFWs and Remittances

Harnessing the potential of migrant workers as entrepreneurs or sources of capital

Data from the NSO census in 2000 indicate that 2,408 registered Filipino overseas workers hail from Eastern Samar (1,352 are women while 1,057 are men). The same organization says that Northern Samar’s contribution to the OFW sector doubled from1995 to 2000. The number jumped from 1,129 in 1995 to 2,542 in 2000. The year 2000 data are divided between 1,236 women and 1,306 men. These data from NSO is a very conservative estimate given that the majority of OFWs are not registered with the Philippine Overseas Employment Agency (POEA) where the samples were taken. In fact, the results of the MODE survey indicate that almost all of the household respondents have a close relative who is working abroad. And this survey represents just five municipalities in Northern and Eastern Samar.

These OFWs have the capacity to channel much needed capital for business in the rural areas. The Bangko Sentral ng Pilipinas (BSP) says that in 2003 remittances through formal channels amounted to US$7.6 billion that is equivalent to 7.5% of the country’s gross domestic product (GDP). 7

The same ADB survey says that on average, an OFW remits US$340 per month to their families. At a conversion rate of PhP55 to US$1, this is equivalent to PhP18,700 per month or PhP224,400 annually, an amount that is way above the normal family income in Eastern Samar. The mean annual family income in the province in year 2000 was PhP71,527, while in Northern Samar it was PhP80,114.8

Do the OFW set aside a portion of their income for savings or capital formation for business? Another ADB study noted that a big percentage of the money sent by OFWs is usually spent on lavish purchases.9 While some OFWs have allocated the amount of their remittances in business investments or in the purchase of real estate properties, they were exceptions rather than the norm among the group interviewed. The majority says that apart from household expenses, the next major expense would be contributions to fiestas, marriages, and birthdays and of course, money lent to close family members.

In terms of microfinance, the OFW sector is both a source of capital and potential clients. This is a sector with a capacity to repay loans at regular intervals through monthly remittances. In addition, this sector has emerged as a quick source of informal credit. What needs to be done is too change their mindset in using their capacity for long-term investments. Results of the Household Survey in the Study Areas

About 47 percent of the household respondents surveyed in the two provinces of Samar have relatives working abroad. Of those with relatives abroad, about 48 percent of them received some form of assistance from these relatives.

Yes No NA Total

With Relatives Abroad 497 545 19 1061

Received Financial Assistance 237 732 92 1061

7 ADB (2005). Poverty in the Philippines: income, assets and access. Pp. 59 to 61.

8 NSCB (2004). Annual Statistical Yearbook

9 ADB (2004). Enhancing the efficiency of overseas workers’ remittances. Technical Assistance Final Report. July

2004.

47

Most of these relatives working or residing abroad are female (60%). While 17 percent have

relatives abroad from both genders.

Male Female Both Total Relatives

NA Total

Gender of Relatives 46 113 33 192 869 1061

Thirty-three percent (33%) of the financial assistances received from relatives abroad are for gifts/pasalubong/social events purposes. Other frequent uses are for emergency/death/burial expenses (22%), educational expenses (19%), regular stipend or assistance (13%), other purposes (7%) and health care purposes (6%).

Uses/Purposes of Financial Assistance N %

gift/pasalubong/social events 89 33%

regular stipend assistance 36 13%

education 51 19%

emergency/death/burial 60 22%

health care purposes 17 6%

others 18 7%

TOTAL 271 100%

Overall SWOT Analysis

Strengths 1. Presence of private investors in the areas of retail business, food and restaurant, and in the insurance

business indicates presence of a market in the pilot areas along the previously mentioned business lines.

2. Increasing competition has prompted small private investors to tie up with NGOs/cooperatives/POs to advertise/link-up their products to buyers in the respective areas of operation of the NGOs/cooperatives/POs.

3. There is potential inflows from remittances in the pilot areas since almost half of the surveyed households (47%) have relatives working abroad (majority are female) and half of them (48%) received financial assistance by way of remittances.

Weaknesses 1. There is a significant rate of closure and inactivity of investments due to shift in business and economic

activity of erstwhile investors, and other reasons (particularly the high cost of doing business and state of the economy).

2. The small private investors indicated their lack of capital to build on their existing businesses on top of the fact that their finances could no longer absorb increases in taxes, higher cost of inputs such as petroleum products.

3. The nature of businesses of the respondents is in business lines that cater to an urban market and thus are located mostly in built-up, urban areas. There are minimal business operations located in rural areas where most of the poor households are located.

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4. Majority of the remittance flows are directed to non-productive/non-investment forming ventures like gifts, pasalubong and social events.

Opportunities 1. The small private investors/businessmen interviewed believe that given external opportunities extended

by governments in the area of capital assistance for businesses, a significant number of investors will locate, thrive, revive or expand existing business operations in Samar.

2. Most of the small private investors agree that the entry of external investors in Samar will: (a) stimulate small entrepreneurs to join the market (either as competitors or complementary businesses), and (b) create more jobs/employment opportunities. (However, a small minority believe otherwise since most small businesses employ family labor).

3. There are potential business opportunities in rural areas and in the agriculture, aquaculture/fishing and eco-tourism subsectors apart from the traditional, urban market-dependent business lines.

4. External intervention of overseas Filipino organizations that have stakes in Samar may create positive impacts in re-orienting and re-directing remittance flows from non-productive ventures to productive ones (about 25% already go to education and health purposes or social capital formation and another 46% of the flows may be influenced for shifting to more productive ventures).

Threats 1. The businesspersons identified peace and order as the second major deterrent to potential investors in

locating in Samar.

2. Peace and order, and the continued risk of being devastated by typhoons deters flows of remittances to investment and capital/employment-generating ventures and instead are channeled to emergency and/or basic necessity purposes.

Sources: ADB (2004). Enhancing the efficiency of overseas workers’ remittances. Technical Assistance Final Report. July 2004 ADB (2005) .ADB business survey highlights areas to improve investment climate. ADB (2005). Poverty in the Philippines: income, assets and access. Ya, Sandra (2001). ILO and the challenge of the informal work. Draft copy. ILO Leyesa, Daryl (2003). The state of Philippine rural women. Presented during the 1st Rural Women’s Congress. Taguig, Metro Manila. 18 October 2003. Philippine Peasant Institute. World Bank (1998). “Apoyo a pequeñas empresas.” Precis no. 173. Spring 1998. Zorayda, Amelia C. Alonso (2002). “The SME Development Plan and the Role of Rural Banks.” From Panganiban (2002) Helping Build Local Economies.

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Chapter

8 Blueprint Specifications:

Strategies & Interventions

his chapter devotes itself to identifying the emerging development blueprint specifications in helping build the local economies of Samar. Just like a the construction of an edifice, a set of development strategies and interventions that aims to reduce poverty and launch local economic development, needs a set of

specifications to become effective at the least possible cost to the planners and builders. The specifications shall come in the form of emerging strategic choices that were derived by interspersing the major strengths, weaknesses, opportunities and threats of the five pillars and of specific economic and spatial levels in Samar.

Overall SWOT Results and Emerging Strategy Options

The following are the emerging strategy options. The sky-blue shaded boxes are the preferred mode if one were to maximize strengths and take advantage of opportunities. Development interventions, however, need to be tempered with the realization of risks attendant to the rest of the boxes. A reiterative process is thus recommended to continuously assess the cost effectiveness and efficiency of pursuing aggressive strengths-opportunities strategies and interventions in view of the weaknesses-opportunities, strengths-threats, and weaknesses-threats. (A detailed enumeration of the SWOT tables is contained in Annex 1.)

Macro Level

At this level, the following strategy options are the overall outlook at the macro or island-wide level. The blueprint specifications that maximizes the strengths and opportunities attendant in Samar (as an offshoot of the findings of the study on the pilot areas) is to pursue poverty alleviation and reduction programs and projects that shall maximize the island’s potential along its competitive sectors or areas.

Strategy 1 Maximizing Strengths & Opportunities

Strategy 2 Minimizing Weaknesses Maximizing Opportunities

Pursue poverty alleviation/reduction programs that maximizes Samar's potentials and sectoral/subsectoral Create greater employment opportunities particularly for

competitive advantages ("winners") among the following women and the poor unemployed groups along

poverty groups: fishers, rice and corn farmers, cash the emerging eco-tourism sector and ensure

Crop/orchard farmers, coconut plantation workers, employment of poor households in public infrastructure

landless farmers, rural women, unemployed rural folks, projects

etc. Strategy 3 Maximizing Strengths &

Mitigating Threats Strategy 4 Minimizing Weaknesses

Mitigating Threats

Pursue poverty alleviation and productivity enhancement Create greater opportunities for women, poor and

programs by improving program and project targeting that landless farmers and people in disaster-prone areas;

shall address the concerns of the poor, population in ensure that public infrastructure projects employ local

disaster-prone and war-torn areas. people and are located in safe areas and institute and

implement land use plan particularly on environmental

protection.

T

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These economic sectors and their publics (and attendant issues) are:

1. Coconut and its by-products • Copra – market access, & price vulnerability (“tumador” pricing) • Coco coir/peat – access to mechanization • Downstream coco-products – develop coco-flour, desiccated, coconut, copra meal feeds, etc.

2. Fishery and aquamarine • Address unsustainable/illegal fishing methods • Product quality of seaweeds (coastal resource management)

3. Abaca production, marketing and trading 4. Palay and corn (reach sufficiency levels) 5. Eco-tourism (promotion, package tours, home stays) 6. Other agricultural products – banana and root crops 7. Non-agricultural/Non-traditional products & enterprises (women-led)

For the interventions to be relevant to poverty reduction, they must target the poor groups and the enterprising poor among these groups. These are:

1. Fisherfolks and their families; 2. Traditional rice and corn farmers; 3. Coconut plantation workers, farmers and their families; 4. Abaca farmers, gatherers, farm workers; 5. Landless farmers and upland dwellers 6. Rural women

Focusing on the identified economic sectors need to address too the issues and concerns that impede the

growth and development of these sectors. A number of them are identified above, particularly in the coconut and fishery/aquaculture sector. Sector studies and conferences (that bring all the stakeholders of the sector together) that thoroughly examine the factors that impede the development of each sector are in line. This blueprint does not cover these sector studies for lack of time and technical expertise. The succeeding activities of the development interventionists (CANDLES) are advised by this study to go through this essential process of knowing the risks involved in pursuing local economy building along said sector lines and target beneficiaries. Community Level

The following are the strategy options proffered at the community level. These are offshoots of the detailed analysis of the SWOT in the pilot study areas. The strategy options emanate from the rapid spatial analysis of the six towns studied in two provinces. The same exercise may be done for other areas and the emerging strategies therein may apply to the rest of the island’s municipalities. The main strategy maximizes the presence of international and government financing institutions in certain interest areas like eco-tourism, agro-industrial development in the identified municipalities. These entities may have plans in the areas and these pose as opportunities favor of the identified sectors and target clientele by ensuring that they are re-alignment and complement the CANDLES initiatives.

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Strategy 1 Maximizing Strengths & Opportunities Strategy 2 Minimizing Weaknesses Maximizing Opportunities

1. Ensure that the development opportunities emanating from international & government financing institutions are aligned along the eco-tourism and agro-industrial potentials of Borongan and Guiuan, San Jose, Lavezares (in terms of spatial development) and along the comparative advantages of the Samar products (sectoral development). 2. Maximize the assistance and services of international, national and local NGOs in socially preparing the community and local people on the attendant demands and implications of the spatial and sectoral development priorities.

1. Integrate the development of Mercedes into the spatial configuration of Guiuan taking into consideration comparative advantages, complementary development and healthy competition. 2. Ensure that investment opportunities from external financing sources address the inadequacy and/or absence of basic infrastructure that shall support the spatial and sectoral development of Samar communities.

Strategy 3 Maximizing Strengths & Mitigating Threats

Strategy 4 Minimizing Weaknesses

Mitigating Threats

1. Ensure that investments in terms of physical infrastructure take into consideration environmental hazards and that these interventions are not destructive to the already deteriorating state of the environment in the threatened areas. 2. Institute eco-friendly practices and enforce environmental laws in utilization and extraction of Samar's resources and natural endowments.

1. Implement the provincial and municipal land use and zoning plans that shall mitigate and prevent the effects of natural disasters and other environmental hazards. 2. Integrate Mercedes in the Guiuan ecozone cluster plan in order to ensure that the whole southern municipalities of Eastern Samar benefit from the planned development of the southern corridor.

Household Level

The emerging strategy options at the household level indicate the overall potential (and demand) of households in certain areas. Potential entrepreneurial households in Borongan and Mondragon indicate a level of success should microfinance and similar development financing is extended and made available in these areas. Similarly, secondary areas and specific sub-groups are present.

Strategy 1 Maximizing Strengths & Opportunities Strategy 2 Mininimizing Weaknesses Maximizing Opportunities

1. Establish a development financing/microfinaning institution that shall develop and cater to the potential entrepreneurial households in Borongan in E. Samar and Mondragon in N. Samar; establish secondary centers in rural, non-poor areas in San Jose and both rural and urban non-poor areas in Lavezares. Secondary centers may likewise be established in Guiuan and Mercedes urban, non-poor areas but operating from Borongan base of operations.

1. Review and re-design microfinance products and services (and/or allied interventions from other development entities) that cater to the basic needs of the households that shall serve to effect substantive decreases in the depth of poverty and enable them to be nearer and/or rise above the poverty threshold.

2. Design and establish development-financing products that shall target specific sectors in agricultural and agricultural processing, fishing and aquatic resources production and trading and women/household members in housekeeping and/or tending to secondary and tertiary income sources.

2. Support and supplement pro-poor and poverty reduction financing programs of existing microfinance providers, government financing institutions and NGOs.

52


Strategy 4 Mininimizing Weaknesses Mitigating Threats

1. A campaign among both the poor and non-poor households (particularly in E. Samar) along savings consciousness and education on entrepreneurship, microfinance and capital accumulation for investment and business advisories should be undertaken to mitigate exposure to costly and unsustainable financing engagements.

1. Link up the poor and needy households with pro-poor programs of LGUs and other government service providers particularly along education, health, agrarian reform, housing and basic infrastructure programs.

2. Ensure accessibility (bridge the gap of social distance between formal financing entities and household-at-demand) of financing/credit products and services to poor households particularly along the following sub-groups: women/housewives, farmers/fishers/coconut gatherers, tenants, barangay staff and pensioners.

2. Offer accessible and affordable credit facilities and services whose entry programs cater to basic needs but with the attendant incentive to access higher-level programs and services that shall distance them away from unsustainable informal credit sources.

The targeting of specific population sub-groups consistent with the strategy options cited above (at the Macro Level) is also a feature of the strategy options in the household level. These are women/housewives, farmers, fishers, coconut gatherers, tenants, barangay staff and pensioners. (These are some of the frequently identified groups in the survey wanting to access financial services). Local Governance Level

The following are the strategy options at the local governance level applicable to both municipal and provincial levels:


Strategy 2 Minimizing Weaknesses Max Opportunities

1. LGUs Guiuan, Mercedes, San Jose and Borongan should tap the opportunities offered by various financing institutions and prospective investors along poverty reduction and local economy building specifically anchored along: eco-tourism, coastal resource management, agricultural production and processing (coconut, corn, fishery and aquatic resources).

1. LGUs set aside development resources for priority public investments in high impact areas as counterpart equities with possible donors to minimize capital outlay from their meager IRA.

2. Pilot LGUs should aggressively tap the opportunities offered by foreign assisted projects particularly in the areas of public infrastructure (farm-to-market roads, communal irrigation, potable water supply, etc.)

2. LGUs should take advantage of capability building components of foreign assisted projects and technical assistance offered by national and regional line agencies.


Strategy 4 Minimizing Weaknesses Mitigating Threats

1. LGUs should evaluate and prioritize their programs and projects according to the ones that deliver the highest impact and multiplier effects on poverty reduction and local economy building.

1. LGUs should further prioritize its public investments to the most urgent endeavors and with the most multiplier effects on the poor and underdeveloped areas or sectors of its community.

2. LGUs should increase their revenue bases, tap foreign assisted projects that still provide lower equity counterparts and invest in high impact projects for the poor households by siting and designing them well.

2. LGUs should orchestrate convergence of efforts by civil society, development financing institutions, private sector and donor community.

53

Civil Society, NGO and PO Level

It is imperative for the civil society organizations, NGOs, and peoples organizations to converge and develop a common agenda for the poor and enterprising poor in Samar. The interventions need to focus primarily on social capital formation and/or increase social capital and organizational maturity of the organizations or groupings of the poor and the communities. The succeeding phases are to organize their constituencies along entrepreneurial awareness and education, development of livelihood and enterprise proposals for supplemental income and gearing up for upscale enterprise and business operations.


Strategy 2 Minimizing Weaknesses Maximizing Opportunities

1. In areas where CSOs converge and have a common development agenda, an aggressive program to integrate and focus their specific services and programs should be undertaken. Potential areas here are in San Jose and Borongan.

1. Revitalization and activation of small NGOs may be effected through the convergence campaign initiative of CANDLES and other upcoming NGOs interested in local economy development in the pilot areas.

2. Cause-oriented and development-oriented NGOs should pursue a common development program for common/convergence areas and this will be advocated to LGUs and government sector for prioritization.

2. The introduction of new and tested technologies and best practices of incoming NGOs, microfinance institutions and development-oriented rural banks will help develop and enhance the organizational capability of small NGOs/POs/cooperatives already operating in the areas and at the same time open and/or enhance collaboration with LGUs.



1. Civil society interventions shall focus on convergence areas that are low-risk relative to effects of natural disturbances and at the same time will lead to high impact on sustainable income generation.

1. NGOs already operating in the pilot areas should maintain their presence and/or coordinate with affiliated and but stable entities to preserve the gains in membership and organization.

2. Civil society to focus on doable common and priority areas while continually advocating pro-people agenda.

2. NGOs should review the development agenda of emerging development-oriented entities in Samar and examine if these are consistent with their declared goals and objectives and could help revitalize and re-mobilize their membership bases.

The call for the civil society sector to advocate and act as lobby group to LGUs in pursuing development –oriented undertakings is the second major strategy recommended. NGOs particularly that are on the ground, nurturing rural poor communities are in a better position to know where, and for whom, should LGU investments should be aligned, sited and administered. This will unburden NGOs of providing welfare services that should be the duty of government sector. They will then have more resources and effort in developing the organizational and enterprise readiness/maturity of the poor and enterprising poor.

54

Development Financing Entities

Development financing entities are to offer appropriate, accessible and low-cost financial products and services to the areas and sectors where the poor and enterprising poor are. While they may locate in capital and built-up areas, their operations can be decentralized, catering to remote but enterprise and finance-ready areas or target clientele.


Strategy 2 Minimizing Weaknesses Max Opportunities

Establish development financing services and/or microfinance institutions that offer appropriate, cheap and accessible products and services in the pilot areas particularly those not serviced, underserved or reached by formal financing institutions located in urban centers. (plus align & develop their portfolio to identified "winners"

Take the opportunity to cater to the gap for development financing by locating in underserved areas by setting up viable alternatives to informal, private lending entities.



Investment in development financing services, microfinance products and services should be piloted in in-demand and/or underserved areas but spreading the risks attendant to the vulnerability of the population to peace and order problems and natural disasters.

Offer alternative development financing services in underserved by lower-risk areas.

Private Investments and Remittances of Overseas Filipinos

Listed below are the recommended strategy options for private investments and maximizing the potentials of remittances of overseas Filipinos for poverty reduction and local economy building. Encouraging private investments and investment-trained remittances along the major sectors and target clientele will greatly stimulate value-adding activities and thereby create employment and other multiplier effects beneficial for the local economy. CANDLES should also find a way to be in contact with Filipino overseas workers organizations to help in the campaign for productive use of remittances and Samar local economy development. Touching base with the relatives and family member of overseas contract workers from Samar through their organizations will provide the link in this regard.

Strategy 1 Max Strengths & Opportunities

Strategy 2 Min Weaknesses Max Opportunities

1. Open capital assistance to or encourage investments (capital infusion) in areas or businesses that: (a) have high profit/market potential, (b) provide greater local employment opportunities, and (c) stimulate local entrepreneurs and other producers/suppliers. These are along the lines of agriculture, aquaculture/fishing and eco-tourism and related industries, and the same shall have business tie up with pro-poor NGOs, POs and cooperatives in the pilot, far-flung rural areas.

1. Encourage shift of businesses to emerging economic activities that shall support value-added activities of the rural poor, create local employment and encourage infusion of external capital and investment. These are in economic and/or business activities that encourage linkages and networking among rural-urban areas, suppliers and producers, putting to sustainable use the natural endowments of the areas thereby help reduce poverty and encourage local entrepreneurship.

2. Potential inflows from remittances should be trained to productive investment purposes (after the same shall have satisfied priority household basic needs like education and health) through organized campaigns by OSF organizations.

2. Effect gradual shift from less-productive purposes of remittances to more productive and investment-forming ones by taking advantage of the campaign potential of OSF organizations who have stakes in Samar local economy development.

55

Strategy 3 Max Strengths & Mitigating

Threats Strategy 4 Min Weaknesses Mitigating

Threats 1. Promote the alternative investment potentials of

Samar particularly in pro-poor and environment-friendly investment areas mentioned above to help reduce peace and order problems attendant to joblessness and poverty.

1. Shift businesses to those that create local employment (and help abate unemployment) and at the same time operate on low overhead costs.

2. Create alternative business and employment opportunities to families of OSF in the pilot areas in order to make them resilient and less vulnerable to the negative effects of natural disasters and civil war.

2. Campaign for the use of remittances to buy insurance (health, education, life, and pension) and help make families of overseas contract workers less vulnerable to effects of natural disasters and public disturbances.

Translating Strategies to Themes of Model Interventions

This section provides translation of the major strategy options into thematic model interventions expected at each planning level and each actor in poverty reduction and local economy building. The complete matrix is in Annex 2. Each strategy presented here is supported with various themes of model interventions expected from each actor in the local economy building process.

Samar-wide Perspective and Role of the Pillars

Main Strategy S-O

Pursue poverty alleviation programs that maximizes

Samar’s potentials and sectoral/subsectoral competitive

advantages (emerging “winners”) among the following

poverty groups: fishers, rice and corn farmers, coconut

plantation workers, abaca planters, landless farmers.

I. Samar-wide, regional-national context

National-Regional

Regional and line agencies plan/s that designs, finances and

implements programs and projects focusing on the competitive

advantages of Samar targeting the identified poverty groups.

(DTI, DA, DSWD, TESDA, DPWH, PCA, BFAR, etc.)

Local Governments

Create local opportunities among the poverty groups by re-aligning

local resources to common service facilites, public infrastructure,

technology extension and skills development along the following

areas/sectors: fisheries/aqua/marine culture, coconut production &

processing, abaca production and processing, eco-tourism, etc.

(LDC, MAO, DTI, MEO, MPDC)

56

-Organized enterprising poor are socially prepared to engage along the

major sectors mentioned.

-Demonstrated capabilities and experience of successful enterprising poor

in other areas transferred/extended to Samar poor-enterprising

households and there is a significant uptake of the technology.

Poor & Enterprising Poor

Development financing products and services are designed according to

specific financing requirements of products and population groups,

including the poor, cooperatives, pro-poor investor, NGOs, big

businesses/integrators, etc.

DFIs/MFIs

-CSOs have put forward and integrated their concerns

at various plan levels the advocacies of the poverty

groups/sectors

-CSOs have administered social preparation activities

to the poor; have rendered focused basic services

Civil Society

- Private investors have directed and/or shifted

investments along the products and target

populace

-Remittances of OCWs are directed and/or shifted

to productive ventures for the poor and enterprising

poor

Private Investments & Remittances

Community-based Spatial Development

Main Strategy S-O

Development opportunities emanating from international

and government financing institutions are maximized along

the major spatial potentials of the pilot communities particularly

along the eco-tourism and agro-industrial potentials of

Borongan and Guiuan, San Jose, Lavezares (in terms of

spatial development) and along the comparative advantages

of the Samar products (sectoral development).

I I -a Municipal, Community-based spatial development

Emerging stategies along major areas of concern

National-Regional Local Governments

Re-align national/agency priorities in favor LGUs are able to package financing- and

of local communities implementation-ready programs and projects to

international and government financing institutions

Support and technical assistance to LGUs along the major sectoral and spatial development

potentials of their respective communities

Governance

57

The poor and enterprising poor participate

in the proper siting and designing of spatial

and sectoral projects of LGUs


Civil society foster partnership with LGUs

along the emerging sectors to ensure

sustainable development in the communities

CSO to socially-prepare the local POs/

communities in the area

Civil Society

Private investors and overseas

Filipinos are well-informed of the

potential businesses in the

communities


Financing products for various sectors are designed,

made available and accessible to various groups

especially the poor and the pro-poor conduits

Successful financing packages that worked

elsewhere along similar investment and

business areas are replicated in the Samar

communities

DFIs/MFIs

Poor Households and the Enterprising Poor


Stable macroeconomic -Provide basic local infrastructure that are well-sited,

fundamentals well-designed for the poor and enterprising poor

Stable policies on -Provide basic capability-building programs, welfare

microfinancing, rural services, education and health facilities/services to the

banking & overall poorest of the poor in the localities particularly rural areas

development financing -Promote peace and order climate

Governance

Main Strategy S-O

Establish a development financing/microfinaning institution (or a network of

DFI-MFIs) that shall develop and cater to the potential entrepreneurial

households in Borongan in E. Samar and Mondragon in N. Samar; establish

secondary centers in rural, non-poor areas in San Jose and both rural and

urban non-poor areas in Lavezares. Secondary centers may likewise be

established in Guiuan and Mercedes urban, non-poor areas but operating

from Borongan base of operations.

Design and establish development financing products that shall target specific

sectors in agricultural and agricultural processing, fishing and aquatic

resources production and trading and women/household members in

housekeeping and/or tending to secondary and tertiary income sources.

II-b Poor Households and the Enterprising Poor


58

-Organize and socially prepare their ranks and organizations to receive

assistance and technology along the potential entrepreneurship lines

being envisioned in their communities

-Enterprising poor leaders (cadres) are trained and later become

entrepreneur-teachers/trainors to increase uptake of entrepreneurial

skills, successful methodologies and technologies

-Entreprenuerial poor developspecialization along various

entrepreneurial sectors and radiate or increase their outreach

(sector-wise and area-wise)


Develop and make available financing products and services:

- for the enterprising poor along the major sectors and areas

- for the poorest of the poor

Review portfolio on collateral lending

Establish a hierarchy and network of primary and secondary centers

in the pilot and similarly-situated communities in Samar

Organize and participate in development financing conferences that shall

package financial products and services for the various emerging sectors

and products

DFIs/MFIs

-Socially-prepare the enterprising poor and their

communities in the emerging sectors and productive

areas to better make them "bankable" and less risky.

-Develop best practices courses and capability building

programs to reinforce the knowledge, skills and attitude

of the organized poor/ entrepreneurial poor

-Develop specific advocacies/standards attendant to the

emerging sectors that shall ensure protection of poor and

the marginal sectors

-NGOs with enterprise components to invest and

demonstrate pro-poor microenterprises among emerging

sectors/products in Samar pilot communities

Civil Society

Private investments and remittances interface and/or

converge in the emerging sectors/growth areas and

enterprising poor households

Private investments support the high capital needs of

the emerging areas/products and employ local

workers and/or support POs/coops

suppliers/producers whose membership come from

the poor households .


Local Government Units

Main Strategy S-O

LGUs Guiuan, Mercedes, San Jose and Borongan

should tap the opportunities offered by various financing

institutions and prospective investors along poverty

reduction and local economy building specifically

anchored along: eco-tourism, coastal resource

management, agricultural production and processing

(coconut, corn, fishery and aquatic resources).

III. Pilot Local Government Units


National-Regional

Re-align

national/agency

priorities in favor of

local communities

Support and technical

assistance to LGUs

59

Enterprising poor to support pro-poor,

pro-microentrepreneur features of the LGU plans,

programs and projects

Ensure and participate in the designing and siting of

LGU plans and programs

Poor and enterprising poor to organize themselves

into local infrastructure quality control, maintenance

and labor units, IAs, BAWASAs, etc.


DFIs/MFIs to offer financing packages and

services to the pilot LGUs along the identified

emerging and priority areas, products, sectors and

population groups

DFIs/MFIs to open financing to LGUs to satisfy

equity requirements to access grant financing

DFIs/MFIs

CSOs/NGOs to prepare the communities and the

households on the planned interventions of LGUs

CSOs/NGOs to advocate and influence LGU

prioritization along pro-poor identification, prioritization

and implementation of programs and projects

Civil Society

Private investments (or donations) and remittances

can be directed to support public investments in pilot

LGUs that specifically complements business

interests and welfare of constituencies

Private investment ventures can locate in areas

where the LGU have planned interventions


Civil Society Organizations

Main Strategy S-O

In areas where CSOs converge and have a common

development agenda, an aggressive program to integrate

and focus their specific services and programs should

be undertaken. Potential areas here are in San Jose and

Borongan.

Cause-oriented and development-oriented NGOs should

pursue a common development program for

common/convergence areas and this will be advocated

to LGUs and government sector for prioritization.

IV. Civil Society Organizations


Local Governments

LGUs with successful track record in

partnering with NGOs can share and

help replicate the experience with the

other pilot LGUs/areas

LGUs to lay down the areas and

sectors where they need to forge

coalition with CSOs/NGOs for stronger

bargaining and advocacy vis a vis

pro-poor development

60

The organized poor and enterprising poor in areas

where there is higher organizational maturity and

social participation can serve as trainers in other pilot

areas


DFIs/MFIs to converge in the common areas of

CSOs/NGOs, LGUs and the poor households and

prepare appropriate financing packages that can

be tapped in the potential areas.

DFIs/MFIs

Concerned CSOs to network and

compare programs & projects in the

pilot areas

CSOs/NGOs to forge common

(win-win) advocacies at various

levels (local, regional, national) that

support poverty reduction and

enterprise development in Samar

Civil Society

Private investors and overseas Filipinos are

informed of the ready investible areas or viable

ventures in the pilot communities and in turn,

pledges from them can be secured

Private investments and investments from

remittances of overseas Filipinos shall support and

observe pro-poor and pro-sustainable development

principles


Development Financing and Microfinance Institutions

Main Strategy S-O

Establish development financing services and/or

microfinance institutions that offer appropriate, cheap and

accessible products and services in the pilot areas

particularly those not serviced, underserved or reached

by formal financing institutions located in urban centers.

(plus align & develop their portfolio to identified "winners")

V. Development Financing and Microfinance Institutions





Stable policies on -Promote peace and order climate

microfinancing, rural banking & -Provide business incentives to DFIs/MFIs particularly

overall development financing those that are intending to locate and/or operate in poor and

marginal areas

Governance

61

The poor and enterprising poor that

have demonstrated capability in

engaging DFIs/MFIs should share and

transfer their experiences in pilot areas

in Samar


Social preparation activities by

CSOs/NGOs in the priority

areas/communities should be undertaken to

"soften the ground" among the poor and

marginal but emerging sectors/areas

Civil Society

Complementary areas for private business and

external investments should be offered to the private

sector, overseas Filipino investors and other

external investors who are willing to invest in

poverty alleviation and small enterprise

development


Private Investments and Potential of Overseas Filipino Remittances

Main Strategy S-O

Promote the alternative investment potentials of Samar particularly in

pro-poor and environment-friendly investment areas mentioned and

to help reduce peace and order problems attendant to joblessness and

poverty.

VI. Private Investments and Potential Investments from Remittances





-Promote peace and order climate

Pro-poor policies on remitance\ -Provide business incentives to DFIs/MFIs particularly

flows those that are intending to locate and/or operate in poor areas

Governance

62

Poor households to organize

themselves and socially prepare for

possible employment opportunities

along the emerging sectors and

investment areas


DFIs/MFIs to introduce various

portfolios to overseas Filipinos/

overseas Samarnons

DFIs/MFIs

CSOs/NGOs to come up with a checklist

or criteria that shall define pro-poor and

environment friendly investment areas that

addresses poverty and social unrest

Civil Society

63

Chapter

9 Program and Project Ideas

he test of the blueprint and its specifications lies in the formulation and implementation of a viable set of programs and projects that shall realize the goals, objectives and targets of the whole poverty reduction and local economy building effort. Programs and projects are the “cutting edge” of development. Guided by the

larger schema, individual programs and projects work on-ground, complementing each other in carving out the grander end-vision laid for them. This chapter devotes itself in enumerating the activities, program, and project ideas that can possibly carve the vision of the development plan for Samar. Through a project schematic framework, it attempts to illustrate and provide specifications of how projects and their implementers can coordinate, complement and converge towards a common development objective. The activities, programs and projects are neither final nor complete – these are just preliminary project ideas consistent with the findings and trends given the overall framework of local economy building. CANDLES will have to initiate specific forums and sector-, product-, industry-, and beneficiary studies to ascertain viability, effectiveness and efficiency of undertaking these program/project ideas.

Project Implementation Framework and Specifications

The diagram below provides a schematic illustration of how the pillars of the local economy and their respective development roles can converge into specific sector/product theme. In this example, the industry or sector in focus is copra, coconut and by- products. The actors can agree on specific overriding problems confronting the industry and converge in addressing/or instituting the specific needed interventions to make the industry work for the benefit of the coconut farmers and their organizations.

LGU

Poor

NGOs

MFIs

Private

Investors

Common Service Facilities

Copra & By-Products

FMRsFinancing & Operation of portable decorticating machinesSocial preparation & capability bldg

Program/Project

Specifications:

•well-sited

• well-designed

•Poor &

entrepreneurial

poor- denominated

T

64

The key specifications here lie in the nature of the interventions. In this example, the identified problem may be “tumador pricing” or middle men and traders dictate the selling price of copra and by-products to the disadvantage of coconut farmers. The perceived solution may be that of providing a facility that will enable coconut farmers to process, by themselves, their raw produce into semi-processed or processed products that will command higher prices. To do this, NGOs help organize and socially prepare the coconut farmers and gatherers to the planned scheme. The farmers commit to the undertaking through agreements with their PO leaders and the PO in turn prepares the proposal for financing. Development financing institutions open windows for farmers’ organization to access financing and evaluate the viability of the proposal.

LGUs can help in social preparation, provision of local equity into the venture and/or guaranteeing the borrowed funds. LGUs can also invest in common service facilities that can house the enterprise and its facilities; improve farm-to-market roads influenced by the venture and other support services. The POs can get in touch with private sector businesses that agree to buy their produce (semi-processed and finished) at fair prices as long as quality and specifications are guaranteed.

The whole system, in the medium-term, becomes a poverty alleviation and enterprise-building machinery.

Introduction of supportive and related projects and programs follow or the whole system is replicated in other similarly situated areas. The key indicators of good programs and projects are thus: (1) they are well designed, (2) they are well sited, and (3) they are poor- and enterprising poor-denominated.

Proposed CANDLES Priority Sector Activities, Program and Project Ideas

Macro, Island-Wide

SamarSamar--

wide wide

regionalregional--

national national

contextcontext

LEAD: LEAD:

Regional Regional

line line

agenciesagencies

Demonstration farmingDemonstration farming--, ,

production & processing production & processing

along the sectors in along the sectors in

CANDLES pilot areasCANDLES pilot areas

--technotechno--demodemo

--capacitycapacity--buildingbuilding

--inputs assistanceinputs assistance

--replicationreplication--uptakeuptake

National line agencies National line agencies ––

CANDLES interfacing on CANDLES interfacing on

applicable applicable

technologies/packages technologies/packages

on:on:

--fishery, aquafishery, aqua--marinemarine

--coconut production & coconut production &

processingprocessing

--abacaabaca

--traditional/nontraditional/non--

traditional cropstraditional crops

Program/Project Program/Project

IdeasIdeasActivitiesActivities

65

Spatial and Sector Level: LGU-Led Poor Households and Enterprising Poor Level

CommunityCommunity--based, based,

participatory community participatory community

planning & organization for planning & organization for

agri agri prodprod’’s & rural s & rural

enterpriseenterprise--social preparationsocial preparation

--capability buildingcapability building

--local resources/equity mobilizationlocal resources/equity mobilization

(initial areas that may be ready (initial areas that may be ready ––

San Jose andSan Jose and GuiuanGuiuan))

Local infrastructure & Local infrastructure &

common service facility common service facility

develomentdeveloment

LGULGU--CANDLES (NGO CANDLES (NGO

sector & sector & MFIsMFIs) )

interfacing on the areas interfacing on the areas

and sectors that can be and sectors that can be

piloted for spinpiloted for spin--off off

projects supporting the projects supporting the

spatial frameworkspatial framework

Realignment of LGU Realignment of LGU

sociosocio--economic plans economic plans

& investment & investment

programsprograms


Ideas/ConceptIdeas/ConceptActivitiesActivities

Support Support

activities to activities to

the spatial the spatial

and and sectoralsectoral

development development

of the of the

communitiescommunities

Food security/basic Food security/basic

commodities program (creditcommodities program (credit--

forfor--food productionfood production

--CO for food productionCO for food production

--Revolving credit fund for food Revolving credit fund for food

production and marketingproduction and marketing

--MicrofinanceMicrofinance perspective/ perspective/

incentivesincentives

Enterprising poor programEnterprising poor program

--demonstrationdemonstration--replicationreplication

--leadership developmentleadership development

--handshands--on enterprise on enterprise

engagementengagement

--onon--ground replication/ ground replication/

radiation in identified pilot radiation in identified pilot

areasareas

Community assessment Community assessment

on poorest of the poor on poorest of the poor

and enterprising poorand enterprising poor

Identification & Identification &

development of development of

community community

leaders/cadresleaders/cadres

ExperienceExperience--sharing by sharing by

successful and successful and

organized enterprising organized enterprising

poor to poor to SamarnonsSamarnons


Ideas/ConceptsIdeas/ConceptsActivitiesActivities

Poor Poor HouseholdsHouseholds

(NGOs/POs (NGOs/POs

and organized and organized

enterprising enterprising

poor)poor)

Enterprising Enterprising

Poor Poor ((MFIsMFIs

and NGOs)and NGOs)

66

Civil Society/Non-Government Organizations Development Financing and Microfinance Institutions

Advocacy programAdvocacy program

--sitesite--specificspecific

--At all levels possibleAt all levels possible

--LGULGU--NGO partnerships in NGO partnerships in

environmental protection environmental protection

(forest & marine)(forest & marine)

Community organizing Community organizing

program with entrepreneurial program with entrepreneurial

perspectiveperspective

Setting up and operations of Setting up and operations of

businesses in coconut, ecobusinesses in coconut, eco--

tourism, fishery & aquatourism, fishery & aqua--marine marine

(and other sectors feasible)(and other sectors feasible)

Active advocacy to reActive advocacy to re--

align government align government

policies, programs and policies, programs and

projects to the poor and projects to the poor and

their localitiestheir localities

Extend services and Extend services and

help augment help augment

government government

underserved areasunderserved areas

Invest and engage in Invest and engage in

enterprisesenterprises



Civil Society & Civil Society &

NGO services, NGO services,

products and products and

advocacies advocacies

converge in converge in

pilot pilot


CreditCredit--forfor--Food Production Food Production

projectproject

-- production of high value production of high value

crops/crops/agri agri products products

consumption and marketingconsumption and marketing

Modified and customized Modified and customized

microfinance microfinance programprogram

Designing/review of Designing/review of

financial services to financial services to

address basic needs of address basic needs of

the poorthe poor

Designing of specific Designing of specific

financial packages financial packages

along the emerging along the emerging

product/sector themes product/sector themes

for the enterprising for the enterprising

poorpoor



DFIsDFIs//MFIs MFIs to to

establish and establish and

extend extend

appropriate appropriate

products products

services in the services in the

pilot areas & pilot areas &

target target

beneficiariesbeneficiaries

67

Private Sector Investments and Overseas Filipino Remittances

Investment mission projectInvestment mission project

--information on potential information on potential

winnerswinners

--investment matchinginvestment matching

--information on cost of doing information on cost of doing

business in business in Samar Samar pilot pilot


Remittance as investment & Remittance as investment & equity campaign program equity campaign program

--resource mobilizationresource mobilization--remittance for equity in remittance for equity in businesses or viable ventures businesses or viable ventures

Project packaging for Project packaging for

private investors along private investors along

the major product/ the major product/

sector themes and sector themes and

applied/customized to applied/customized to

the poor and their the poor and their


--Local Local

--ForeignForeign

Mounting of campaigns Mounting of campaigns

and investment and investment

missions for OSF missions for OSF

organizations & organizations &

overseas overseas SamarenosSamarenos



Direct Direct

private private

investments investments

and OSF and OSF

remittances remittances

in the in the

convergence convergence

areasareas

Documents

Blueprint for the Development of Local Economies of Samar