The virtue of giving back

By SENATOR MANNY VILLAR

March 17, 2011, 11:04pm

 MANILA, Philippines – Let us be reminded by the saying “Give and it shall return to you a hundred fold.”

This is the evolving concept from which the Corporate Social Responsibility (or CSR) Bill sprung — the virtue of giving back.

For the longest years, Capitalism has driven our economy. Businesses are measured by their bottom-line — whether they report a profit or a loss. In the new millennium, however, consumers, investors, and employees alike are beginning to be more discerning. They have started to judge these enterprises according to their corporate morality.

This is mainly caused by the people’s realization that everybody is intertwined. People cannot solely depend upon the government to do everything for them. Each person or entity has a role to play.

Clearly, the daunting task of bridging the gap between the haves and have-nots cannot and should not be dependent upon the government alone. People, or entities with considerable wealth should freely channel resources to an array of programs and activities that will improve the community that surrounds them.

Thus, the materialization of this bill.

We shall now outline the bill’s most significant features:

Number (1). Tax incentives.

By virtue of the CSR bill, a corporation may be given the chance to deduct reasonable CSR-related expense from its taxable income. The grant of this incentive is actually twofold. First, admittedly, there are already established corporations who involve themselves voluntarily with CSR activities.

Hence, we want to reward these philanthropic deeds. Second, we want more companies to embrace CSR. By granting an incentive, we are hopeful that more corporations will be willing to embrace CSR.

Number (2). Preferred Related Activities.

Corollary to the incentives, however, we want to ensure that there is optimal use of these funds. As such, these expenses shall be directed to related activities as provided for by law or the regulations, which should be parallel to the goals of the government.

These activities are as follows:

1. Charitable.

2. Scientific.

3. Youth and sports development.

4. Cultural or educational purpose.

5. Services to veterans and senior citizens.

6. Social welfare.

7. Environmental sustainability.

8. Health.

9. Disaster relief and assistance.

This way, the corporations’ CSR activities will in some way complement the government’s goals as delineated in whatever policy it may choose.

Number (3). Mandatory allocation of net income for CSR activities.

Also, the CSR bill makes it mandatory for “large taxpayers,” as defined by the National Internal Revenue Code and as identified by the Bureau of Internal Revenue (BIR), to allocate a reasonable percentage of their net income to CSR.

At present there are 1,376 identified large taxpayers. From these large taxpayers, the BIR collects over 60 percent of its taxes each year — this is reportedly worth P439 billion in taxes.

In recent developments, particularly, the issuance of BIR Revenue Regulations 17-2010, last Nov. 26, the BIR reported that the large taxpayer base is expected to double and is hoped to account for 80 to 85% of collections. In fact, the BIR large taxpayer service is tasked to collect P485.15 billion of the BIR's P860.4-billion goal for the year.

Therefore, we are looking at, at least 2000 large tax payer corporations mandated to involve themselves in CSR activities.

Number (4). Reporting.

Finally, this bill provides for a reporting requirement. The large taxpayers will be required to submit, as part of their annual report to the Securities and Exchange Commission (SEC), the list of activities relative to their corporate social responsibility. The SEC shall be the principal repository of all public records related to CSR.

In conclusion, the CSR bill aims to institutionalize Corporate Social Responsibility among the identified large taxpayers. Based on the assumption that these corporations are partners of the government in nation-building — the CSR activities are expected to complement the government’s goals or policies whether short-term or long-term.

On this note, we earnestly hope for the favorable action by this august body on this measure.

Clinton: World too unequal, unstable to lift poor nations out of poverty

By Cathy Cañares-Yamsuan
Philippine Daily Inquirer

MANILA, Philippines—Inequality in global economics and instability in world politics are making it difficult for countries like the Philippines to operate on a level equal to more progressive nations.

Former US president Bill Clinton made this observation at the “Embracing Our Common Humanity” forum held Wednesday as he urged Filipinos to seek “opportunities for prosperity” to balance the situation.
Clinton urged Philippine political and business leaders to practice corporate social responsibility while placing a special focus on the environment and exploring more sustainable energy sources to jumpstart this effort.

“Looking at problems of the modern world, it almost seems like the political equivalent of chaos theory in physics,” Clinton said.

He mentioned three “most significant problems we see in the modern world.”
First, Clinton said “the world is entirely too unequal to sustain the kind of economic growth to lift everyone in the Philippines, to give everyone good education, give everybody a chance to get a job or start or good business.”
He added that this situation has also been evident in many other countries.

“Looking at it globally, with market economics dependent on finding more and more customers, many people earn less than a dollar a day, many people do not have access to clean water. Two and a half billion people have no access to basic sanitation and one-fourth of the deaths worldwide come from AIDS, tuberculosis, malaria and infections from water,” he said.

“Second, the world we live in is too unstable to be completely sustainable. You see it in how rapidly the financial crisis—that I’m sad to say began in the US—spread around the world. You can see it in terror with no national borders. You can see it in the growth of…narco-trafficking,” Clinton said.

Zeroing in on terrorist activities in Mindanao, the ex-US president noticed that “the continuing political conflicts with the (Moro Islamic Liberation Front) and other dissident groups” indicate “a continuing war between people who are basically interested in dividing up political or economic pie and those who are committed to growing it.”
Clinton also lamented the reality of climate change and its tremendous global impact.

The third problem, according to him, is that greenhouse gases responsible for this phenomenon will remain an issue because “ways of producing energy are not sustainable.”

“The reason the world has not reached an agreement on climate change…many countries are not convinced they need to cut down green gas emissions in a way that makes it good economics. I’m convinced that it’s not true. But in the last decade China spent twice as much money as the US to build solar and wind capacity but they won’t sign an agreement because they’re not sure they can meet (the requirements) and still grow their economy,” Clinton added.

Recalling his brief Palace visit just before the forum, Clinton said he was “complementing President Aquino that 43 percent of your electricity come from domestic resources—geothermal and hydro and natural gas. That is an amazing statistic.”

“I urge you to keep working so you can reach a hundred (percent domestic energy sourcing) because it’s good for national security, it’s good for economic security, it means more jobs and makes you much more competitive for long-term investment,” he suggested.

“We have to find more ways to expand opportunity for prosperity in order for market economies to work in 21st century. We have to find a way to break through this inequality…We gotta do something,” the former US chief executive added.

Clinton said he admired former classmate and Pampanga Representative Gloria Arroyo’s recent move to file a bill on Corporate Social Responsibility (CSR) as well as former president Fidel Ramos’ continued efforts to write books and immerse himself in social issues.

“You want people in these presidential jobs, no matter what their political differences, who have a clear idea of how countries need to change and to have sustainable energy. Nobody is going to succeed in anything they do unless they know where they want to go and have a realistic plan to get there,” Clinton said.

Prior to Clinton’s talk, Regina Lopez of Bantay Kalikasan and Pacita Juan of Echo Store spoke of their personal experiences on successful social responsibility efforts to inspire those present in the forum.

Lopez gave a slide presentation on the progress of her efforts to revive the Pasig River by showing “before” and “after” photos of the clean-up of Estero de Paco, a main tributary in Manila.

The photos were reminiscent of New York City’s own effort to revive the Main Line, a forgotten stretch of railroad tracks that were transformed into a park now frequented by city dwellers.

Lopez’s showcase is the Paco Market Headwater that features a growing water garden in what used to be a stinky estero blocked by tons of garbage.

“Isn’t that amazing? That’s reality, that’s not a drawing…If we can do this in all esteros…it would benefit the economy since the most expensive real estate is beside waterways. It would also be good for our health and peace and order because if people live well, they won’t have so much topak going in their brains,” Lopez said.

Lopez, managing director of the ABS-CBN Foundation and chair of the Pasig River Rehabilitation Commission, stressed the need for private companies to get involved in social issues like the environment.

“We need to revere the environment in which we live, I feel the planet is inextricably connected to who we are, emotions, culture and humanity. We cannot talk about environment without talking about these,” she explained.

Pacita U. Juan, whose latest effort Echo Store sells community products from all over the Philippines, urged businessmen to begin with baby steps.

“It can begin with a new eating lifestyle that chooses only products that are sustainable. It can also be a commitment to help farmers or artisans. Or make your business green or more environmentally compliant,” she said.

Juan’s Binalot fast food, for example, uses banana leaves instead of plastic plates and delivers food to customers using electric vehicles.

Her branches also use LED lights to save energy and are finished using toxic-free paints.
“Adopting a green advocacy is something that should start actually from the top.

A (chief executive officer) lives (the philosophy) and leads it and may be outlived by it. We can ask big business: ‘what is your CSR?’” Juan said.

“Think of small steps in your advocacy. Farmers can add value (to their) coffee (harvest) just by picking them (properly). It’s not rocket science, merely teaching them a new idea. They thought before that ripe and unripe cherries got the same price. But now, separate ripe from unripe and Philippine coffee will be great again. Even advocacies, just a small step, doesn’t take a lot of resources, sometimes it’s just an idea,” she added.

Juan noted that environmental consciousness in the country got a great push from the twin tragedies of typhoons Ondoy and Pepeng.

“It’s an example that if you don’t care, somebody will make you care. I saw somewhere that the consciousness about the environment increased tremendously after Ondoy and Pepeng. And it doesn’t have to be that way that when you don’t listen, something will come again,” she said.

“There has been a lot of movements for using less plastic. These are things we’ve been talking about many years ago but sometimes it takes, sad to say, a (tragedy) to make people do (something),” Juan noted

Source: Philippine Daily Inquirer