Livelihood struggles and successes

Among the package of government-wide social protection (SP, aka anti-poverty) interventions, livelihood programs (LPs) seem to be the most favored mode of helping the poor, next to outright cash dole-outs or “ayuda.” Yet government-assisted livelihood enterprises that survive beyond one to two years turn out to be the exception rather than the norm, making the assistance little more than “ayudas” themselves. But LPs are what national government agencies (NGAs), local government units (LGUs), and nongovernment groups like to provide the poor they serve, because “that is what they want.” This was validated in consultations around the country by a Brain Trust Inc. study team I led, tasked by the Department of Social Welfare and Development (DSWD) to assess the government’s prominent SP programs.

DSWD itself has its Sustainable Livelihood Program (SLP), which traces back to an early 2000s program called Self-Employment Assistance-Kaunlaran (SEA-K) spearheaded by the late former Secretary Corazon “Dinky” Soliman. SEA-K was described as “a microcredit initiative to provide small, non-collateral loans to help the poor start basic entrepreneurial activities.” But DSWD realized that providing financing was not enough unless it was supported by adequate entrepreneurial capability building. By 2011, it phased out SEA-K and launched SLP, primarily targeting households served by the Pantawid Pamilyang Pilipino Program or 4Ps (see last week’s “Has 4Ps worked for the poor?”). A major change was a shift in focus from microcredit to capacity building, to “provide participants with essential assets to engage in microenterprises or secure formal employment.”

Recognizing that not everyone is cut out to be an entrepreneur, SLP provided assistance in the form of microenterprise development (MD) and employment facilitation (EF). While the MD track took off from the phased-out SEA-K, the EF track drew from the Department of Labor and Employment’s (DOLE) strategy of skills training and job matching. Either way, SLP shifted the focus from financing via microcredit to capability building. In a 2022 assessment, the Philippine Institute for Development Studies (PIDS) observed low profitability and substantial business closures in SLP enterprises, along with management issues and lack of participation in and earning opportunities for members in group enterprises that SLP assisted. PIDS assessed SLP’s cost to have exceeded its benefits, putting its very usefulness into question, and belying the key adjective in its name.

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DSWD’s SLP is but one of numerous LPs offered by various government entities like DOLE, Technical Education and Skills Development Authority (TESDA), Overseas Workers Welfare Administration (OWWA), Department of Agriculture (DA), Department of Trade and Industry (DTI), Department of Science and Technology (DOST), and more—not counting LGUs, parishes and churches, and civic organizations. With such a plethora of LPs of various kinds targeting various beneficiary groups, our study team found it useful to make a distinction between initiatives best characterized as “livelihood assistance,” and those with “enterprise development” as an end goal.

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OPINION

“Livelihood assistance” would better characterize programs from DSWD, DOLE, OWWA, and most LGUs, with no necessary aim for sustainability beyond economic relief and capability-building. Experience shows that these often result in minimal income increases in beneficiaries over time. “Enterprise development” would be the more appropriate term for programs from DTI, DOST, and TESDA that aim to build profitable, job-creating and sustainable businesses via capacity-building and technology support, and business development services. While both livelihood assistance and enterprise development programs ultimately aim to provide sustained income for beneficiaries, the latter generally yield superior outcomes, but entail larger investments and more complex assistance. In contrast, the former are cheaper and easier to implement, and thus commonly favored even as they often fail the test of sustainability.

Some exceptional DSWD regional field offices actually claimed high success rates for their own SLP beneficiaries. Asked what their secret of success was, the one word that kept emerging was “tutok,” or close follow-up support, especially sustained business mentoring. DSWD has since adopted a new SLP Sustainability Plan to address this and other adverse findings in the 2022 PIDS assessment.

It is worth recalling former DTI Secretary Ramon Lopez’s seven Ms for fostering small business: mindset (change), mastery, mentoring, money (financing), machines (technology tools), market (access/linkage), and models (business setups). If all LPs ensure inclusion of these key success factors, the line between “livelihood assistance” and “enterprise development” would fade out, and the better we would be able to help our poor.

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