The Philippines’ NGO Sector

 

By Joanna Moshman

 

 

Charity and welfare work in the Philippines dates back to the beginning of colonization.[1] The motivation behind Kawanggawa (“charity”) is based on the notion of Pakikipagkapwa, meaning “to holistically interact with others” and Kapwa, meaning “shared inner self.”[2] When charity and volunteer work are carried out, it is implied that there is “an equal status between the provider of assistance and the recipient,” as exemplified by Damayan—the assisting of peers when in crisis—and Pagtutulungan, which means “mutual self-help.”[3]

 

These conceptions have acted as a backdrop to the successful development of the large number of non-governmental organizations (NGOs) in the country today.

 

The Rise of NGOs: A historical Context

1521-1946

 

The Republic of the Philippines, as it is known today, has a population of over 96 million people, making it one of the most populous countries in the world.[4] An archipelagic country, it comprises 7,107 islands, with Manila as its capital city. Sometime after arrival of Portuguese explorer Ferdinand Magellan on March 16, 1521, the country, inhabited by Austronesian (Malayo-Polynesian) peoples, was established as a Spanish colony and it remained under Spain’s control until 1898 when the islands were surrendered to the United States at the end of the Spanish-American war.[5] In 1935, “the Philippines became a self-governing commonwealth” under President Manual Quezon, who was assigned to move the country towards independence.[6] In 1942, the Philippines briefly fell under Japan’s control during World War II, but finally gained independence on July 4, 1946.[7]

 

The introduction of welfare and civil society organizations (CSOs) in the Philippines came as early as the era of the Spanish. The Roman Catholic Church in particular “established parochial schools, orphanages, asylums, and hospitals;” however, these were primarily for the elite.[8] The Church also established religious cofradías—brotherhoods—that involved helping and visiting the sick. One such organization is Hermanidad de la Misericordia—the Brotherhood of Mercy.[9] During the Spanish era, almost all of the CSOs established were faith-based. Jose de Basco y Vargas established one of very few secular organizations of the time called the Economic Society of Friends.[10] 

 

In the late 19th century at the end of the Spanish-American war, many cofradías were set up in resistance to Spanish rule; these organizations focused on seeking independence and equal rights for Filipinos. A faith-based association, the Propaganda Movement, began at this time, which sought reform through propaganda education. Katipunan also emerged, a secular group seeking independence and reform “through popular revolution.”[11] The Spanish government was not supportive of these CSOs and deemed them illegal.[12]

 

Under the U.S. control, the welfare and CSOs in the Philippines were decriminalized. Overall, the government was supportive of these associations and even introduced some welfare agencies of their own; “a number of individuals and families contributed to the relief, welfare, and [war] reconstruction efforts.”[13] The American Red Cross opened branches in the Philippines and many schools and hospitals were founded by American Methodist and Protestant churches.[14] 

 

It was also at this time that NGOs were recognized by the government. Under the Philippine corporation law of 1906, “the government subsidized their operation.”[15] The Asociacion de Damas Filipinas (organization of Filipino Women) was established as well as “hundreds of farmer credit cooperatives…claiming more than 100,000 farmers as members.”[16]

 

1947-1991

The communist movement emerged right after the Philippines gained independence and it was seriously resisted by the “government, religious organizations, and non-communist NGOs.”[17] The Institute for Social Order was started in 1947; at the same time, many NGOs were focusing heavily on farmers, agriculture, and rural development. In the 1950s, NGOs dedicated to welfare were beginning to network and the Council of Welfare Foundations of the Philippines, Inc. (CWAFPI) was created, an organization that later became known as the National Council for Social Development Foundations (NCSD).[18] 

 

In 1965, the election of President Ferdinand Marcos was problematic for NGOs because he “envisioned a ‘new society’ in which there was little space for civil society and no tolerance for advocacy NGOs. His administration became increasingly associated with the suppression of civil, human, and political rights.”[19] This caused NGOs to move underground; they had to join the National Democratic Front or become associated with a church or university institution to shelter themselves.[20]

 

Marcos’ dictatorship became known as the Martial Law Period (1972-1986).[21] Despite being underground, many NGOs were focusing on social development issues and were strengthening and building relationships with poor communities. Although the NGO community was not that large at the time, the action taken by these organizations focused on similar “ideological forces.”[22]

 

This led to the “Philippine Business for Social Progress (PBSP), the Association of Foundations (AF), the National Secretariat for Social Action (NASSA), the National Council of Churches in the Philippines (NCCP), the Ecumenical Center for Development (ECD), the National Association of Training Centers of Cooperatives (NATCCO), and the Philippine Partnership for the Development of Human Resources in Rural Areas (PHILDHRRA) [to be] formed.”[23] All of these were NGO networks that united the organizations based on similar community-based programs.

 

When Marcos’ regime was overthrown in 1986 (known as the People Power Revolution), CSOs and NGOs began to resurge from underground.[24] During his repressive dictatorship, a lot of international development support came into the Philippines, and when President Corazon Aquino assumed power in 1986 the number of NGOs only increased. In the 1987 Constitution, the government “formally recognized” the roles of NGOs in Filipino society.[25]

 

1992-2000

From 1992 to 1998, President Fidel Ramos served the Philippines and was highly active in promoting NGO and civil society involvement in politics and public policy. Topics that NGOs addressed, “such as violence against women and the rights of indigenous people” were previously critiqued and labeled “inappropriate for legislation.”[26] Under President Ramos’ term, these issues became common and important subjects debated in legislation.[27]

 

At first, a number of NGOs were supportive of Joseph Estrada (June 30, 1998 to January 20, 2001) as Ramos’ successor. However, he disappointed them and they disagreed with him over issues such as foreign investment and economic governance.[28] Most importantly, a number of NGOs “claimed the Estrada administration did not fulfill its stated agenda to help those in poverty,” and he seemed to give stark attention to NGOs and the coalitions they had previously built with the government.[29]

 

NGOs Today

 

In 2001, the current president, Gloria Macapagal-Arroyo was elected with strong NGO support and her administration is known for continually supporting NGO freedom.[30] However, in 2006, she declared a state of emergency in the Philippines that “raised concerns of a threat of civil liberties.”[31] These concerns were later confirmed “by hundreds of extrajudicial killings” of activists, civil society workers, and people associated with leftist organizations.[32] The President did condemn the killings and called for legislation to address them.[33]

 

Funding

There are very limited estimates as to what amount of money is given to NGOs in the Philippines. In and around 1999, it was suggested that “most NGOs operate on relatively small budgets ($80,000 and below).”[34] However, at the time, some of the larger NGOs could have been receiving up to $1.2 million annually.[35] Grants and international NGOs are the main way that NGOs in the Philippines receive funding. Next to foreign organizations, NGOs receive funding inside the country from “government agencies, other Philippine NGOs, multilateral agencies and churches.”[36]

 

Numbers and Types

It is estimated that there are as many as 60,000 registered NGOs in the Philippines today.[37] This number includes all nonprofit organizations, including about 10,000 that are listed as people’s organizations (POs).[38] People’s organizations are also referred to as grassroots organizations or community-based organizations (CBOs), and generally serve a specific population in a narrow geographic area. They sometimes are distinguished from other NGOs in while national and international NGOs commonly are formed to serve others (public benefit NGO), the POs are usually membership organizations (mutual benefit NGOs) whose purpose is to advance the interests of their members, such as cooperatives, unions, community associations, credit circles, farmers’ associations, youth clubs, and so forth.

The number of  “development-oriented NGOs” is estimated to be between 3,000 and 5,000.[39] Development type NGOs have made the greatest impact on Filipino society thus far. They “[address] issues of poverty and governance, but also [build up] alternative practices and paradigms of the development vision they advocate.”[40] Though most NGOs in the Philippines are called development NGOs, they provide a range of services and expertise. A number of them focus on environmental and agrarian issues and are successful in impacting public policy and coming up with programs that involve the community (i.e. anti-pollution campaigns).

 

Self-regulation and Tax-Exempt Status of NGOs in the Philippines

 

The rapid increase in the number of NGOs in the Philippines has raised concerns about the ability of the government to regulate the many organizations and to be sure that they are legitimate and use their resources according to their stated goals and objectives. The Philippine Department of Finance (DOF) challenged the NGO community to establish a mechanism to certify the accountability, legitimacy, and transparency of NGOs. It was further stipulated that only those NGOs that are so certified would receive a status as donee institutions with tax breaks for donors to these institutions.[41]

 

In 1998, the Philippine Council for NGO Certification (PCNC) was thus formed for this purpose. It was organized by six of the nation’s largest national networks of NGOs. A Memorandum of Agreement between the DOF and the PCNC authorized the PCNC to certify NGOs applying for donee institution status based on the NGO meeting certain minimum standards for financial management and accountability. Such a certification was the basis for the Bureau of Internal Revenue (BIR) to grant donee institution status. The PCNC also works to promote professionalism, transparency, and accountability among Philippine NGOs. [42]

The PCNC is one of the few government recognized NGO certification systems in the world.[43]

As of December of 2008, there were 485 NGOs on the PCNC’s certified list of  NGOs [44], although Songco stated in 2006 that the PCNC has certified 1,000 NGOs in total. [45]

 

Tax-exempt status is given to all entities enumerated under Section 30 of the Philippine Tax Code. This section does not require the NGOs to secure certification from an accrediting body to receive income tax exemption. However, to achieve Donee Institution  status, there are some additional qualifications. Donee Institution status allows donations to these institutions to be tax-deductible and/or exempt from donor’s tax. That is, local donors (individuals or corporations) are not only exempt form donor’s tax, but also can deduct the amount they have donated from their taxable income (up to a certain extent). Certification by the PCNC also acts as a “seal of good housekeeping” that prospective donors and funders may consider in their selection of organizations to support. Once an organization has been judged to have met the minimum criteria for certification, the board of the PCNC offers a 3-year or 5-year certification to the organization and informs the Bureau of the Internal Revenue (BIR), which can then issue the organization a Certificate of Registration as Qualified Donor Institution.[46]

According to Songco, in 1998 there are 6,000 NGOs with Donee Institution Status in the Bureau of Internal Revenue.[47]

 

Another mechanism for Philippine NGO self-regulation grew out of the Caucus of Development NGO Networks (CODE-NGO). CODE-NGO is the largest coalition of NGOs in the Philippines. It is formed of ten groups of membership associations – one national NGO, seven national networks, and two regional networks – and includes an estimated total of 3,000 NGOs throughout the country.  Formed in 1990, the organization was officially registered with the Securities and Exchange Commission (SEC) as a non-profit organization in 1991. Also in 1991, CODE-NGO established a Code of Conduct for Development NGOs, the first such coalition to establish a Code of Conduct among NGOs in Asia and one of the first in the global community. This code has been signed by over 1,000 NGOs.[48]

 

CONCLUSION

The NGO and civil society sector in the Philippines has come a long way in the past two decades. This is largely due to the generally positive government and presidential support they have received. NGOs have been able to network and create partnerships, campaign for reform, and spur sustainable development.[49] In fact, today, the “Philippines is now said to have the most active civil society in Asia.”[50]

 

 


 

[1] Soledad, Feyl I. 2006. “Promoting Transparency & Accountability in the Philippine NGO Sector” written by the executive director of the Philippine Council for NGO Certification (PCNC). Available at http://www.resource-alliance.org/other/startdownload.asp?openType=forced&documentID=20

[2] Asian Development Bank (ADB). 2007. “Overview of NGOs and Civil Society: Philippines” from Civil Society Briefs. Available at http://www.adb.org/Documents/Reports/Civil-Society-Briefs/PHI/CSB-PHI.pdf

[3] ADB 2007:1

[4] Central Intelligence Agency (CIA). 2008. “Philippines” from The World Factbook. Available at https://www.cia.gov/library/publications/the-world-factbook/print/rp.html 

[5] CIA 2008

[6] CIA 2008:1

[7] CIA 2008

[8] ADB 2007:1

[9] ADB 2007

[10] ADB 2007

[11] ADB 2007:2

[12] ADB 2007

[13] Soledad 2006

[14] ADB 2007

[15] ADB 2007:2

[16] ADB 2007:2

[17] ADB 2007:2

[18] Soledad 2006

[19] ADB 2007:2

[20] ADB 2007

[21] Soledad 2006

[22] Soledad 2006:1

[23] Soledad 2006:1

[24] ADB 2007

[25] Soledad 2006

[26] ADB 2007:3

[27] ADB 2007

[28] ADB 2007

[29] ADB 2007:3

[30] ADB 2007

[31] ADB 2007:3

[32] ADB 2007:3

[33] ADB 2007

[34] ADB 1999:5

[35] ADB 1999

[36] ADB 1999:5

[37] Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/background.php PCNC: Background and Rationale.; ADB. 1999. A Study of NGOs: Philippines. Available at http://www.adb.org/ngos/docs/ngophilippines.pdf.

[38] Asian Development Bank (ADB). 1999. “A Study of NGOs: Philippines.” Available at http://www.adb.org/ngos/docs/ngophilippines.pdf

[39] ADB 1999:1

[40] ADB 1999:2

[41] Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/background.php PCNC: Background and Rationale.

[42] Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/background.php PCNC: Background and Rationale.

[43] Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification

[44] Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/aboutUS.php PCNC: About US..

[45] Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification

[46] Philippine Council for NGO Certification. 2009. http://www.pcnc.com.ph/certification.php PCNC: Certification.

[47] Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification

[48] Danilo A. Songco. 2006. http://www.hapinternational.org/pool/files/philippines-evolution-of-ngo-accountability-implications.pdf. The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs: A literature review and options paper for the Philippine Council for NGO Certification

 

[49] ADB 2007

[50] Soledad 2006:1