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The Asian Financial Crisis and the Sector of Persons with Disabilities: Effects and Coping Strategies from Two Case Studies in the Philippines

Venus M. Ilagan
National President,
The National Federation of Organizations of Persons with Disabilities in the Philippines (KAMPI)

 

Abstract The paper takes a look at how two self-help organizations of persons with disabilities in the Philippines are affected by the Asian Financial Crisis. It also examines the coping strategies adopted by both organizations in the face of the crisis. The paper starts with an overview of the effects of the crisis on the Philippines as a nation and is followed by capsule studies of the two organizations. The first organization, called VIBES, is a group of visually-impaired persons who had established a successful massage business prior to the crisis. The second case is that of a support group of parents of disabled children who established a peanut butter making business in order to cope with the economic crisis.

Overview of the Financial Crisis in the Philippines

The Philippines has not been spared from the effects of the staggering economic crisis that has hit almost all countries in the East and Southeast Asian region since 1997. One the positive side, the country was not quite affected as badly as it's neighbors Thailand and Indonesia, yet still, the crisis certainly has made its mark on the country. Analysis of the effects of the crisis on the Philippines though is made more complicated by the presence of several other factors not experienced by the other countries. These factors include the El Nino weather phenomenon, the holding of national elections in the middle of the crisis and the lingering effects of the debt crisis from the early 1980s.

Nevertheless, the country is indeed in the midst of the economic crisis and this crisis has manifested itself in various ways. For a long period of time, the local currency has been relatively stable with an exchange rate of 26 to the US dollar. When the crisis struck, the value of the currency experienced a constant and spectacular drop to a record low of 46 to the US dollar before settling to between 39 and 40 in the recent months.

Aside from the currency devaluation, the stock market also dropped considerably during the period and has yet to recover the lost ground. GNP growth, which had been hovering around the 5.3 range since 1994 and in fact had reached a high of 7.2 in 1996, dropped significantly to a mere 0.1 in 1998 according to the Central Bank. (www.bsp.gov.ph, 1999) This at least was a better figure than those of the neighboring countries which experienced negative GNP growth figures. Interest rates, both for commercial banks and from government treasury bills, increased steadily from 1996 to 1999 and the inflation rate broke the double-digit mark, rising to 11.6% in February this year.

The Philippine economy also relies heavily on remittances from Overseas Contract Workers (OCWs) and the crisis is expected to affect this soon. Substantial numbers of OCWs are expected to begin returning in the next few months as the labor markets in Korea, Thailand and Malaysia come under increasing pressure to use local labor in the face of rising unemployment. (World Bank, 1998)

Government had to cut its budget as the overall economic downturn resulted in lower revenues; in fact the government was already operating on a budget deficit to begin with. This in turn has resulted in lower spending for social services which are quite crucial for the sector of persons with disabilities in the Philippines. Furthermore, the high inflation rates also resulted in lesser purchasing power for the already meager resources available to most disabled persons.

Beyond the measuring and analyzing the considerable effects of the crisis on the Philippine economy as a whole, it is also worthwhile to look at how the crisis has affected specific groups within the sector of persons with disabilities. This paper looks at how two different organizations of persons with disabilities have been affected by the crisis. It also examines some of the coping strategies adopted by both groups. The first case looks at the situation of a self-help organization of visually-impaired persons who had successfully established a network of small-scale massage businesses around the country and who had manage to thrive prior to the crisis. The second case looks at an organization of parents of disabled children, mostly housewives, who had gathered together initially to act only as a support group but had found itself also having to enter into micro-enterprise and cooperative activities to cope with the crisis.

Case 1: Effects of the Crisis on Business Initiatives of Visually Impaired Persons

Government resources and provisions for the education and employment for persons with disabilities specifically for visually impaired persons are not sufficient. Many visually impaired persons do not have access to the things that would render them socially and economically independent. Owing to this fact, many visually impaired individuals live all their lives dependent on relatives, welfare organizations or resort to jobs that do not afford them much dignity. In the face of the financial crisis, their plight has gone from bad to worse, as the government did not have enough resources to properly address the needs of visually impaired persons.

The Visually Impaired Brotherhood for Excellent Services, (VIBES) is a self-help group of visually impaired persons that rose above the barriers to their development. VIBES is guided by the philosophy that every human being with or without disability has an inherent right to progress and development. It aims to prove the worth and value of persons with disabilities by promoting the psycho social and economic well-being of its members.

Recognizing the potential they hold as human resources and the lack of employment opportunities for visually impaired individuals, VIBES has opted to come up with self-help livelihood projects. Owing to the fact that majority of the members are expert masseurs, establishing therapeutic massage and reflexology centers were the logical choice.

Starting with internally-generated funds and supported later on with financial and technical assistance by private and government agencies, VIBES was able to put up a number of massage and reflexology centers in Metro Manila. Circumstances brought about by the economic crisis did not always work in their favor. With proper management and the steady increase in the demand for their services, VIBES was able to sustain the centers they initially established.

As the years moved by, difficulties were felt arising from the worsening state of the Philippine economy indicated by the rise in the prices of basic commodities. During those years, membership in VIBES has steadily increased. Because of these and other pertinent factors, VIBES came up with a number of strategic changes and major programs that effectively cushioned the effects of the financial crisis and strengthened their sustainability.

Localization was carried out by establishing centers in more areas nearer to their markets. The massage and reflexology service was usually provided in clients' homes. To compensate for the rising cost and difficulty of transportation for the visually impaired, as well as the amount of time it took to travel to and from clients' homes, the amount charged for the service was rather expensive. By undertaking localization, VIBES was able to lower the rates for the service at the same time allowing the masseurs to cater to more areas and more people at a time. The income earned by the centers likewise increased due to the increase in demand brought by lower rates and the proximity of the center to the clients.

Another strategy that was adopted was the promotion of the massage and therapeutic centers. Utilizing the services of local cable television providers and other advertising approaches, they were able to promote the centers.

Currently, there are over a hundred members, seventy percent of whom (70%) are visually impaired. Other members of VIBES are dependents or relatives of the blind who are normally seeing and are working as project staff. The massage projects that have been put up have been financially independent of the organization took on the form of franchises. Operating under the name VIBES Center for Good Health, these centers are managed and owned by five to ten blind masseurs.

VIBES as an organization provides technical and financial assistance to the massage projects. Skills upgrading, employment and access to funding assistance is provided to its members. To this day, VIBES continues to operate massage centers all over the country and envisions establishing more massage projects in key provinces. To further ensure a bright future for its members, the VIBES Multi-Purpose Cooperative was established, providing low-cost and accessible consumer goods as well low-interest loans to its members. VIBES has exemplified that they were able to cope with their disabilities and the challenges of the financial crisis.

Case 2: Parents of Disabled Children

The Katipunan ng Maykapansanan sa Pilipinas (KAMPI) established the Stimulation and Therapeutic Activity Centers with funding from the Danish National Society of Polio and Accident Victims (PTU) in five regions of the Philippines. The STACenters provide free comprehensive rehabilitation to poor children with disabilities.

In each STACenter, the parents of the disabled children have formed associations mainly to serve as mutual support groups and to raise awareness and support from the community for the benefit of disabled children. One of the features of KAMPI's STAC project is the provision of small grants to parents associations who are interested in establishing livelihood projects. One of the more successful livelihood projects is that of the Quezon City STACenter parents association.

Many of the parents in the Quezon City STACenter live in conditions of poverty and often have just enough to live by. Majority of them are jobless or employed in menial jobs with wages that are not sufficient to meet their day to day expenses. The parents' lack of education coupled with the dearth in job opportunities makes them more vulnerable to conditions of poverty. With the rising cost of living, and the economic effects of the crisis manifested by the rising cost of basic commodities, pressure mounts on the parents to provide for the families. What little resources they have is used for the acquisition of food and daily living expenses.

The STAC program requires that the children are brought for therapy three times a week. Parents accompany their children to therapy sessions thus, it takes away some amount of time they may be able to use to earn income. In addition, they are burdened by the cost of transporting their disabled children to and from the STACenters.

After arriving at a consensus to come up with a livelihood project, the parents association came up with a proposal to establish peanut butter processing enterprise. A small amount of financial assistance as the groups initial capital was provided by KAMPI-PTU for the purchase of the necessary equipment and materials to produce peanut butter. Some of the parents knew how to process peanut butter served as the guide and trainors in the initial production.

Production of peanut butter is carried out once a week in the STACenter. An average number of four parents per week work together to process peanut butter. The work and the compensation is rotated equally to the parents. The parents' association determines the how much mark-up is added to the peanut butter. The peanut butter is then marketed directly in the STACenter or the parents buy in bulk and sell it for their personal profit. Thus, the parents earn their personal income in two ways: compensation for working to process peanut butter and profit from selling peanut butter.

The profit acquired from selling all the peanut butter is shared for the general needs of the children in the STACenter. 20 percent is allotted to medicines, 20 percent to socialization/recreational activities and 40 percent for the procurement of basic commodities. The remaining 20 percent is used as capital build-up as the parents anticipate an increase in the demand for peanut butter.

Currently, the parents' association has earned profits from the said enterprise reaching to more than double their initial capital. The personal income they acquire is used mainly as augmentation to their families' income, purchasing basic commodities and paying for the transportation cost of their children to and from the STACenters.

In their own way, VIBES and the Quezon City STAC Parents Association have risen above their difficult circumstances to cope with the complications brought about by the crisis. As self-help organizations in the truest sense of the word, they have shown that by working together they can be capable of overcoming great adversity.

References

World Bank. (1998). Socioeconomic Impactg of the Financial Crisis in the Philippines, Draft Report for Circulations.

www.bsp.gov.ph, March 1999.


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Asia and Pacific Journal on Disability
Vol. 2, No. 1, May 1999

Contributed by Mr. Tsuyoshi Takeda, Asahi Shimbum Newspaper

ISSN 1029-4414