Informal Economy Budget Analysis in Philippines and ... - WIEGO

WIEGO Working Paper N o 12themselves. This has increased their confidence to go out and meet other people as well as participatein community life. It also gives them greater awareness of what is going on around them and willingnessto assert their rights as members of the community.• With their new-found financial independence, they regard themselves as being on equal footing withtheir husbands, proud that they contribute to household expenses, and in some cases, are of financialhelp to close relatives. In few cases, their financial empowerment has given them the confidence to goagainst the wishes of the husband on matters they find of extreme importance, for example, whether achild should continue going to school.Therefore, generally, it can be said that Sikap Buhay has had a major impact in helping stabilise workand earnings among programme beneficiaries by providing additional working capital, allowing for amore steady flow of income and reducing business risk. Microfinance has reduced financial vulnerabilityof programme beneficiaries by lowering the cost of capital as well as providing savings and insuranceservices. Likewise, there was a perception that women were economically and politically empowered.However, the impact study also noted the following limitations of the microfinance programme: (Pascual, 2009)• The survey reveals a negative side to employment for women. The overwhelming majority (81%) ofwomen continue to be mainly responsible for the performance of household chores, resulting in multipleburdens for women. The survey also shows that children take up additional chores in the householdwhen the mother is employed and can no longer perform all the household tasks.• Microfinancing of work in the informal economy means financing work/livelihood which is stillcharacterised by low and irregular work/income. The impact study showed that the beneficiaries of theprogramme were involved in occupations with earnings that vary from day to day, from one month to thenext. Informal workers are vulnerable to the ever-changing demands in the market.• The irregularity of work and earnings is also evident in the multiplicity of livelihood and sources of income.Most of the participants engaged in two or more businesses and economic activities. There are several reasonsfor this multiplicity of activities. One is to make both ends meet considering the low earnings from each activity.The other is to reduce income and business risk as well as to overcome the problem of limited market.• The initial requirements for programme participation—existence of a viable business along with creditinvestigation to establish permanent residence and ownership of assets—probably excludes the pooresthouseholds. Most of the programme beneficiaries who participated in the discussions did not comefrom very poor households. The more successful ones come from relatively better off households in theircommunities and not because of microfinance.The above limitations validate the experience of the SAMAKANA and the Luzon Vendors’ Association.Likewise, according to the Sikap Buhay ECO 2009 information materials, the majority of the PPSB borrowerpartnersare small traders and vendors. Only some 30–40% venture into service and small manufacturingbusinesses where there are greater chances for expansion and corresponding increase in income.It is also important to note the following findings:• There is limited verifiable data to prove that all programme participants have achieved an increase in averageincome. Part of the reason for this is that record keeping and financial accounting are hardly practiced notonly for lack of skills but also because there is little distinction between household activities and operation ofthe enterprise. Thus some of the costs of doing business form part of the household budget (e.g. electricity,water, household labour) and some of the business income is part of household consumption (e.g. food soldis also consumed by household members).26