Business in Manila, Both Mall and Small

I have just completed my first two weeks at the Center for Community Transformation (CCT) in Manila, Philippines.  For those of you who followed Prem Thomas’s blog, the following account of my first impressions of Manila and CCT will likely seem familiar, but I hope you still find them interesting.

A first Jeepney ride through the heavy traffic congestion on Taft Street, the main thoroughfare through Ermita and Malate, gave me a quick introduction to the urban economy of the Philippines.  Despite the presence of familiar franchises (McDonalds, Starbucks, etc.) and some not so familiar ones (Jollibee, a local favorite), the majority of commercial enterprises lining the road are small, family run store fronts and stands, most of them selling a diverse and predictable range of products: candies, bottled water, soft drinks, small toiletries, spices, canned goods, etc.  The sheer number of these “sari-sari” stores is astonishing.  It wasn’t surprising then that as I began working with the CCT Credit Cooperative uploading borrower profiles onto Kiva’s website, I found that the vast majority of borrowers listed “SSS” (Sari-Sari Store) as their current business, and the purchase of small consumer goods for repackaging and resale as the purpose of the loan.

A few trips to borrowers working with the CCT Pasay branch shed some light on the practicality and flexibility of these businesses.  One borrower I interviewed stated that she began by selling candy, used a loan to expand her business into perfume, and then utilized another to start a purified water business.  She then also mentioned casually that she runs a barbeque at five pm each day.  A busy woman.  The primary attraction to the business for many of the sari-sari store owners is the ability to manage domestic tasks while also generating income.  Purchasing inventory is as simple as heading to the local grocery store to buy in bulk, and at times when the sari-sari store has no customers store owners can take care of daily household tasks.

The informal sector is a dominant element of life in Manila, and small sari-sari businesses run out of homes serve as an important and relatively stable source of supplemental income for families or individuals either unable to find higher paying wage jobs or earning wages that do not fully cover daily expenses.  It is easy to see why it is difficult to find these jobs too – larger stores are already heavily staffed.  The local department store, SM, has three or four service staff per isle.  The same is true for fast food franchises, which each have seven or eight service employees dedicated to cleaning tables.  There is an abundance of labor in the city.

Besides heavy staffing, a walk through the mall in Manila is similar to an experience one might have in the United States, but there is other, more subtle, evidence of the substantial informal sector that exists outside:  an extensive range of calculators and ledger paper is on offer at the department store, sold in quantities ill suited for large business.

A variety of business paper on sale for use by local entrepreneurs

More information on sari-sari stores can be found in a  paper from the Journal of Small Business Management at the following website:

Nick Whalley, KF12, is having an great time eating new foods and getting to know the ins and outs of Manila.

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