Ex-OFWs, advocates confront business realities

by JEREMAIAH M. OPINIANO
www.ofwjournalism.net

CALOOCAN CITY-–FORMER overseas Filipino workers trying their hands in business are discovering the cold truth of the market: rules are unforgiving to those unprepared.

While social enterprise advocates say the shock is due to lack of skills and training in entrepreneurship, former OFWs with businesses believe “luck” has something to do with it.

“[Going into business] is a daunting task when you don’t have a concrete business in mind before and upon your return to the Philippines,” Celestina Soriano said of her experience when she returned in 2002 after a 14-year domestic work stint in Hong Kong.

The 39-year-old mother of one owns a four-year-old home-based store, which was three-fourths full with food products. She also operates a six-door apartment, currently all occupied by low-income families and students.

She gave up her passenger transport business with the increasing prices of tricycle and jeepney parts, maintenance and fuel costs.

For Cecilia Icaonapo, operating a micro-store is enough.

“The sari-sari store is my dream business,” says Icaonapo, who manages her family’s store since high school and prior to working in Singapore and Taiwan from 1997 to 2002.

“I’m comfortable with it,” Icaonapo says, who earns as much as P39,000 monthly. That income comes from daily retail sales (P600), electronic mobile phone pre-paid loading sales (P400), and wholesale of alcoholic beverages and cold drinks to other stores (P300).

But for Ramon Gallinera and Acier Lotilla, former OFWs must go into manufacturing, as they claim their soap and health products business also creates employment for OFWs’ families and migrant Filipinos returning for good.

“[We’re] ‘lucky’ to have supplied at least 5,000 bars daily to distribution centers and have given jobs to 50 people from Calamba, Laguna and Bulusan, Sorsogon jobs,” said Gallinera, a former marketing employee in Riyadh.

Some OFWs are entrepreneurial, says Maria Angela Villalba of the enterprise development NGO Unlad Kabayan Migrant Services Foundation, and “many others are not.”

These observations on OFWs-cum-entrepreneurs hold true since the early 1990s, Villalba adds.

Skillet

RHODORA Hizon of the nongovernment group Center for Small Enterprises agrees with Villalba.

Dizon points to their group’s data that over 75 percent of the former overseas workers who sought CSE’s advice and help on their enterprises failed to make their enterprises grow.

CSE provides technical assistance and training to small enterprises worth over a million pesos, that is why they go into minor trading and sari-sari stores, adds CSE’s executive director.

Dizon, however, said these options reflect “their lack of skills”.

Hizon also notices many migrant workers “do not have that dream enterprise”.

“It is seldom that you enter into an enterprise you stumbled upon that succeeded.”

Villalba points to readiness.

“There are those ready to make their businesses grow, and those who can only reach as much,” she said.

Villalba adds migrant workers trying to make their enterprises grow are those “who think of their businesses’ needs”—and this is where they will be tested because many of them think business is “merely about buying and selling.”

Hizon says there are two types of enterprises: livelihood-oriented enterprises, where incomes go straight to the entrepreneur’s daily family needs; and growth-oriented enterprises, where entrepreneurs plow back part of their profits into the business for possible expansion.

Only a small number of enterprises run by former overseas workers are growth-oriented, Hizon observes, as she also called the stores owned by overseas workers as “micro-micro enterprises.”

Citing government data, Hizon estimates there are more than 700,000 micro-enterprises, 62,000 small enterprises, 2,000 medium-scale enterprises, and 2,000 corporations in the country today.

Within those micro-enterprises, Hizon says, those with assets worth P100,000 below are “micro-micro,” P100,000 to 1 million are “middle-micro,” and P1 to P3 million are “mezzanine micro-enterprises”.

Soap

LOTILLA and Gallinera can’t say where in Hizon’s level they could categorize their business center for their varied organic soaps—called “Sattin” (“Sariling Atin at Tulong sa Tao, Itaguyod Natin”)–in Barangka, Mandaluyong City.

“It’s not that big,” they say.

Nonetheless, it is one of a dozen business centers scattered nationwide that sell soaps ranging from a P40 Papaya-based soap to a P1,200 soap for “slimming”.

These centers are part of a network of distribution under the Sapi-OFW Development Cooperative that Lotilla and Gallinera formed four years ago.

The duo trained in soap making abroad: Lotilla while working as caregiver in Canada and Gallinera while working in the Kingdom of Saudi Arabia capital.

They returned to the Philippines in different years and established their own businesses before agreeing to merge operations in 2002.

Their soap manufacturing venture produces 5,000 bars a day and yields “a fairly good income.”

Sapi-OFW uses direct marketing schemes such as inviting people to pay membership fees and avail of soap products, forming groups to become distributors of at least P11,000 worth of products; and, enabling people to set up service centers and avail of discounts from selling the products.

Gallinera declined to disclose profits they get from Sapi-OFW’s methods.

However, Lotilla, whose Acier Group of Companies is a Sapi-OFW partner, claims that since starting her soap business in 2004, she profited from P500,000 to P1 million.

Apartment owner Soriano, on the other hand, said that whatever she earns from the store goes to meet her family’s daily expenses like food, water, and electricity.

She is keeping earnings from her apartment rental business, at least P7,000 a month, for repairs and improvement.

Soriano doesn’t have plans to go back to her passenger transport business and says she’s focusing on her apartments.

Icaonapo, on the other hand, plans to buy a taxi franchise.

Happiness

VILLALBA is not worried “if these former migrant workers can only do so much in terms of making their businesses grow, so as long as they are equipped with skills and avoid ‘trial and error’ situations.”

But Hizon thinks that while giving OFWs the skills to do business will help, “many of them still lack the appreciation on why training will help them and their businesses.”

Hizon points to culture as one of the culprits.

She believes Filipinos have a mindset of being “employees” and, thus, becoming an entrepreneur from being an employee will need self-preparation.

“If you really want to manage a business, you already know what business you will set up, and the risks involved in entrepreneurship will then become calculated risks because you have planned for those already,” Hizon says.

Prior to equipping yourself with skills, OFWs should make a “careful self-assessment” about their capacities to be in business.

“Part of this assessment is if the entrepreneur has plans to make the business grow.”

Soriano believes that her work as domestic worker in Hong Kong has deadened her skills set as a graduate of business administration almost two decades ago.

Still Gallinera said venturing into manufacturing in the Philippines doesn’t only require skills and mindset since the odds against this sector are high.

While making soap is “easy to do,” Gallinera says Sapi-OFW’s 10-year-old venture “is not without rough sailing.”

He is aware that venturing into manufacturing, a “struggling sector in the Philippines,” is no easy picking.

Hence, he said they continue to seek partnerships with businessmen and with groups of overseas workers.

OFWs as entrepreneurs may have “special, distinct” characteristics and needs, observes Nancy Borje of Zone One Tondo Organization (ZOTO), which provided entrepreneurial loans to nearly 50 former OFWs like Soriano and Icaonapo.

“They (OFWs) came from difficult situations abroad, and these affect their transformation into entrepreneurs back home,” ZOTO’s director for microfinance says.

Icaonapo and Soriano are among ZOTO’s OFW entrepreneurs who are “doing well” in their enterprises.

Soriano, for example, started with an P8,000 loan from ZOTO and the loan became P13,000 which she dutifully paid within 75 days recently, says Borje.

Borje credits Soriano’s increasing borrowing as a reflection that the latter’s business is doing well..

“I’m happy with my life and my business,” Soriano said.

“Isn’t that more important?”

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OFW Journalism Consortium Inc. in partnership with the Ateneo de Manila-Economic Policy Reform and Advocacy (EPRA) project

Links:

Unlad Kabayan Migrant Services Foundation — www.unladkabayan.org
Center for Small Enterprises — www.csentrepinoy.org
Zone One Tondo Organization -– www.zoto.org