2nd SIMPI-ICUS Conference Research Entry

Institutionalized Private Corporatism As

Political Instrumentation Substantiating
State Welfarism?
Dr. Francisco T. Agoot 1, Emmanuel J. Bacud2 & Armand Alfred A.
Pamonag, et al 3
1

Saint Louis University-Department Head of Political and Social Sciences

2,3
Saint Louis University-Student Researchers

Abstract:
The researchers adapted a case-study
approach and phenomenological qualitative research
design in deciphering the CSR service competency of
the two companies and at the same time, the
experiences of the household affected by these CSR
services. The researchers conducted interview method
and content analysis in obtaining and understanding
the data needed by the research study. The researchers
performed a face-to-face interview as guided by the
originally-formulated interview questions to at least 70
participants (35 participants for Philex including 3
participants for the company and 35 for HEDCOR
including the HEDCOR Community-relations Manager)
that are purposively selected. In interpreting the
gathered data, the researchers adhered descriptive
statistics especially such as frequency distribution and
measure of central tendency.The researchers also
performed the Centering Resonance Analysis (CRA) in
interpreting the data by which the researchers aimed to
centralized the research themes into one linear model
to represent holistically the quality of CSR services and
programs
implemented
by
PHILEX
Mining
Corporation and HEDCOR..

1. INTRODUCTION
Corporatism denotes a process of aggregating
individuals having a common goal to perform their
functions in the society through organization-creation
and community-based services to promote general
well-being. Corporatism as a deepening institutional
force of the 21st century among private sectors can
substantiate the state machinery in promoting state of
welfarism among citizens through employmentgeneration, cultural preservation, environmental
revitalization, education subsidy, and medical support-all of these mechanism can be conglomerated into one
term, CORPORATE SOCIAL RESPONSIBILTY!
Today, our global industry has been
accommodating more than 60,000 multinational
corporations in the today along with more than

800,000 subsidiaries and millions of suppliers the

web of private enterprise is wider and more connected
than at any other time in history (Ruggie 2004); hence,
a significant increase in market economy efficiency
was observed. At the same time, concerns are
mounting about the sustainability of the world
economy, as well as our ability to address global
challenges such as climate change, pollution, poverty,
disease, and inequality. While in the past people have
often looked to government to protect society from
such threats, today it is clear that government cannot do
the job alone. Harnessing the power of business in
improving social and environmental conditions across
the globe has thus become a priority for policy-makers
most especially privatized institutions and other
stakeholders, and it represents a central aim of the
corporate social responsibility (CSR) movement.
(Maguire, 2011)
Corporate social responsibility (CSR) is an
emerged business management concept that originated
in the 1930s after the Wall Street crash of 1929
exposed
corporate
irresponsibility
in
large
organizations; hence, the realization about corporate
responsibility had become a premier pillar of enterprise
development adhering to the principle of mutual
benefit (Sen, 2011). The historical development of the
corporate social responsibility of business was not
widely considered to be a significant consideration
from Adam Smiths time to the Great Depression, since
the 1930s due to the market orientation in that era, was
revolved on profitability and resource efficiency
(Hopkins, 2004). In accordance with the 2014 Nielsen
Report, corporate social responsibility, also referred to
as corporate citizenship or conscious capitalism, is
practiced by companies dedicated to making a positive
social or environmental impact on society. Thus, the
broadest definition of the CSR would be the
relationship created among [global] corporations, the
government of a country and the stakeholders
(Crowther & Aras, 2008). Corporate social

2nd SIMPI-ICUS Conference Research Entry

responsibility through the implementation of

community-based services can be also seen as strategy
of private sector to accommodate the growing demands
of their stakeholders in the community. CSR growth is
emphasized as a result of growing influence of
corporations and decline of state intervention ( Kachui,
2015). Most CSR activities, based in particular on
environmental and social factors, aim at reducing
negative externalities (e.g. pollution abatement) or
generating positive externalities and privately
providing public goods (e.g. financing hospitals)
(Crifo & Forget, 2012). Moreover, corporate social
responsibility refers to the collective the actions of a
company that are considered socially responsible if
they are voluntary and contribute to increase social
welfare. There are two elements are crucial in
determining whether the management of a company is
socially responsible- first, a socially responsible
company is concerned not only about the interests of
shareholders but also about the stakeholders and
second, actions must be voluntary and go beyond what
is required by regulatory institutions on environment
protection, workers rights, and consumer protection
(Ganuza, 2012). According to Sen, the goals of the
CSR activities are mostly philanthropic because of the
adherence of companies to the altruism principle.
Forces, or institutional pressures, outside a given
initiative are also important determinants of CSR
effectiveness in which pressure from stakeholders and
threats from regulators serve to motivate voluntary
participation in CSR initiatives (Auld, et al 2008). With
this notion therefore, private companies through the
implementation services can provide citizens welfare
and can aid the government in terms of providing basic
services of people. As a result, CSR, implicitly or
explicitly manifests a reflection on the nature of a firm,
its role in society and its relationships with its internal
and external stakeholders. The reflections regarding
CSR is not only the task of managers (and sometimes
of the owners), but also other stakeholders who have an
impact on the firm. The CSR policies formulated,
therefore, will vary depending on historical events,
political systems, ideology, geography, social
expectations as well as global economic pressures
(Argadona,n.d.).
Business institutions either foreign or local firms
host their operations within society and in return
society expects these business institutions to show
responsibility for aspects of its operations through
corporate social responsibility as signified by the
principle of social reciprocity. Furthermore, it has been
argued that the soul of corporate social responsibility
is what the French philosopher Rousseau understood to
be the social contract between business and society.
Rousseau conceptualized the relationship between
business and society as being a symbiosis since there

is a perpetuating and deepening relationship between

these private or business institutions and citizens in
sustaining societal stability in which the state has only
the mediating role. Corporate business principles are at
the heart of the CSR policy, which strives to deliver
value for shareholders and other groups of company
stakeholders. (Bichta, 2003) There are three potential
drivers of CSR in existence: CSR as a business strategy
designed either to avoid risks that threaten the
companys shareholders interests or to promote
innovation that benefits the companys interests; CSR
as a policy based upon ethical and moral values; and
CSR as a means for achieving social sustainability.
(Ken Coghill, et al 2005)
CSR programs and services upon implementation
can be also interpreted
into 4 interdependent
components: economic, legal, ethical and discretionary.
Economically, companies are supposed to perform well
financially and meet consumption needs. Companies
place economic responsibility as a top priority since
they have to produce goods and services to meet the
needs of society. By producing and meeting the needs
of society they will also be able to make a profit. Then
there is the legal component in which companies are
required to conduct businesses that comply with the
law. In order to stay in business and to have a high
performance companies are expected to abide to the
laws and regulations. The ethical component
companies should conduct their business ethically and
follow societys moral rules. They can go beyond the
minimum legal requirements and simply want to
conduct businesses ethically and morally. Lastly
companies should be benevolent and philanthropic in
nature doing good causes, serving and helping
communities and the society, etc. ( Kan 2012).
The fundamental idea of CSR is that CSR reflects
both social imperatives and the social consequences
that responsibility accordingly falls upon corporation,
but the precise manifestation and direction of the
responsibility lies at the discretion of the corporation.
Hence, this characterization of CSR makes it
mandatory exercise in that it assumes that business
establishments have direct responsibility to help in
solving societys problem. (Matten & Moon, 2003)
Furthermore, the conceptual enlargement brought by
stakeholders theory has lead to identify CSR as a
value driver of institution. (Badia, et al, 2013) As
matter of fact, CSR has evolved from returning profits
to society to creating shared value with stakeholders in
order to improve the environmental and social
corporate sustainability. The corporate strategy has five
dimensions that enable to relate CSR to value creation:
Centrality (closeness to the firms mission and
objectives), specificity (ability to capture private
benefits by the firm), volunteerism and visibility
(projects observable by stakeholders). (Burk and

2nd SIMPI-ICUS Conference Research Entry

Logsdon, 2010). As McElhaney substantiate, CSR can

be both a risk mitigation strategy and an opportunityseeking strategy that provides welfare not only for the
employees but also for common citizens by enjoying
the services rendered by these corporations.
In liberal newly-industrialized democracies, much
of the political spectrum has converged on this division
of labor, albeit with some sharp divergences of opinion
as to the relative roles of the market and the state. It has
been viewed that Corporate Social Responsibility (CSR)
can improve the competitiveness of Micro, Small and
Medium Enterprises (MSMEs). Societys expectations
for private companies to manage their societal and
environmental impacts and to be involved in
addressing public concerns have increased over the
years. Through their CSR initiatives and their core
business activities, private companies attempt to meet
these societal expectations, highlighting their
importance as development actors (Miral, et al 2011)
In the country for instance, Section 20, Article II of
the Philippine Constitution stipulates that the state
recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives
to needed investments. To substantiate this provision,
modern economists view of how society should be
organized has traditionally rested on two pillars. The
invisible hand of the market, described in Adam Smith,
harnesses consumers and corporations pursuit of selfinterest to the pursuit of efficiency and the state
corrects market failures whenever externalities stand in
the way of efficiency, and redistributes income and
wealth, as the income and wealth distribution generated
by markets has no reason to fit societys moral
standards.
(Bernabou and Tirole (2009).
In
recognition of the indispensable role of the private
sector as the main engine of economic development,
the state is mandated to encourage private enterprise
whether local or foreign and to provide incentives to
needed investments (De Leon & De Leon, 2011). The
principle of subsidiary is therefore amplified by this
constitutional provision such that the state should not
predominantly engaged in business since its obligation
is to make the economy a system for free and healthy
business competition. Given this ratiocination, the
private sectors most especially business establishments
in return to this states acknowledgment on their
indispensable role in the community must engaged
themselves for the attainment of welfarism that
encompasses social justice, progress, fair opportunity
and economic sustainability ( i.e. meeting the needs of
the present generation without compromising the
ability of future generations to meet their own needs)
resulting now to citizens well-being. Thus, social
welfare is much evident if the institutions whether
public or private in nature gave societal responses such
good education, quality employment, social insurance,

beneficial infrastructure, etc. which promote the wellbeing of the population.

Corporate social responsibility schemes reflect the
human side of corporations, and their leaders personal
commitments to contribute to the community and
society of which they are a part. Business leaders are
well aware of the need to gain goodwill and societys
permission to operate within the communities where
they conduct their business. (Kangan, et al., 2012).
Moreover there are three possible understandings of
corporate social responsibility: the adoption of a more
long-term perspective, the delegated exercise of
philanthropy on behalf of stakeholders, and insiderinitiated corporate philanthropy. The latter two
understandings build on individual social responsibility,
which led us to review individual motivations for prosocial behavior. (Bernabou & Tirole, n.d.)
Corporate social responsibility has been
operationalized through corporate social performance
that entails programs and policies implemented by the
private corporations within the community involved.
(Tumay, 2012)
However, Corporate Social
Responsibility became too problematic and scandalous
throughout the years because of the intentions that had
been incorporated unto it. Apart from corporate
philanthropy, strategic partnerships between the
business world and policy makers, development
practitioners or other stakeholders in society provide an
important tool in CSR, especially in the context of
development. (Rohregger, 2006) Corporate social
responsibility is not something that is required by the
law for businesses to follow and implement but
companies who want to practice business should be
more responsible and contribute for the betterment of
society often choose to implement CSR strategies. It is
ideal and morally justifiable that many companies are
incorporating CSR into their organizational ideals
because they are looking for improvement of their
performance and company image but CSR can be also
perceived as a marketing gimmick where companies
try to get the attention of consumers and improve
performance and sales. Often companies do decide to
incorporate CSR into their business strategies because
it will eventually help improve financial performance
and improve the company image. (Kan, 2012)
In contrast with the utilitarian view, CSR must be a
business system within a state that enables the
production and distribution of wealth for the betterment
of
its
stakeholders
(citizens)
through
the
implementation and integration of ethical systems and
sustainable management practices a systems approach.
This scenario is quite tangible in developing state since
CSR is very deontological in nature since both
institutions (the government and business firms) are
aiming for sustainable development in which citizens
are immediate beneficiaries (Smith, 2011).
As

2nd SIMPI-ICUS Conference Research Entry

Maximiano (2005) believed, Philippine business has a

greater responsibility to demonstrate that indeed
business success and sustainability can go hand in hand
with social and environmental concerns. Maximianos
study of 166 Philippine corporations showed that
involvement in CSR and integration of CSR into
corporate policies and programs are both correlated
with size of the corporation. Philippine conglomerates,
which are mostly family-owned, lead in CSR in the
Philippines. However, as analyzed by Talisayon (2009),
the performance of CSR among private corporations is
highly dependent on stakeholders capital (capitalist
principle) since stakeholder capital is determined by
the the quantity and quality of a firms external
relationships that result to value creation and business
success, e.g. formal and informal relationships not only
with customers but also with employees, suppliers and
external consultants, partners, franchisees/franchisor,
government as well as communities and public affected
by the operations of the business.
Thus, Masaka (2008) postulated that calls for CSR
have tended to take coercive stance with governments
imploring corporate organizations to show social
concern social concern in their operations and
interactions with society and government. In addition,
he further argued that CSR is a call for business to
show social concern as primary reaction to widespread
cases of corporate misdeeds in the form of pollution to
environment, disregarding consumer rights, selling
substandard commodities and profiteering and general
disregard fro the welfare and well-being of stakeholders. Simply, CSR is essentially anchored on
utilitarianism.
Despite the apparent acceptance of CSR by
businesses, many economists have taken a skeptical
view of CSR and its viability in a competitive
environment. Milton Friedman, in particular, doubted
that CSR was socially desirable at all. He maintained
that the only social responsibility of a business is to
maximize profits (conducting business in open and free
competition without fraud or deception). He argued
that the corporate executive is the agent of the owners
of the firm and said that any action by the executive
toward a general social purpose amounts to spending
someone elses money, be it reducing returns to the
stockholders, increasing the price to consumers or
lowering the wages of some employees. Economists
Bryan Husted and Jos de Jesus Salazar, for example,
recently examined an environment where it is possible
for investment in CSR to be integrated into the
operations of a profit-maximizing firm. (HernandezMurillo & Martinek, n.d.) Corporate organizations may
manipulate CSR because they do not freely choose to
contribute towards solving societys problems, but
because society expects them to do so. Though a
corporate organization is not natural persons per se, it

is made up of natural persons whose free choices or

lack of them influences its success and relations with
society (Velasquez, 2002). But, the results of a recent
study by CR Magazine and NYSE Euronext prevail
that there is a growing high-level commitment to
corporate
responsibility
including
its
social
responsibility component. The study found that a
higher percentage of corporate budgets was allocated to
CSR from 2010 to 2011, signifying a stronger focus
and commitment (Crespin & Boudrie, 2011).
Organizations have been integrating socially and
environmentally oriented objectives into their
responsibility frameworks to reinforce business
strategy as well as to address the concerns of
stakeholder groups. (Kwan & Tuuk, 2012) CSR is
inherently organic, as companies both respond to
societal expectations and define CSR in terms of their
own organizational and social motives for
philanthropic giving and civic engagement (Kangan, et
al, 2012). CSR services, if that is the case, may really
substantiate state of welfare in a community wherein
the citizens have institutional supports such as quality
employment, health aid and educational subsidy since
according to the theory of contestability, anticipated
threats of social protest can effectively discipline firm's
behavior. Hommel and Godard (2001, 2002) consider
that a firm's contestability is characterized by its
exposure to two types of threats: contestation of its
social license to produce and innovate, based on
environmental or health-related risks to the community
attributed to the firm's products or processes; and
economic contestation from competitors. Hence for a
corporate activity to become contestable. The link
between firm visibility on its market and CSR level
has been found in many empirical studies (e.g.
Margolis and Walsh, 2001). As such, CSR can be a
strategic policy to prevent social contestability and
protects the firm long term interests (Hommel and
Godard, 2001).
It can be divulged that
the place of
corporations as economic institutions can be also
interpreted as pressure groups within the literature of
political economy and comparative politics. The
notions on CSR will remain stable, enduring and will
keep on providing interesting texts and relevant case
studies to further strengthening academic research as
far as social development and welfarism are concerned.
However, the current research study deals with private
corporations as institutional agents of states to
substantiate welfarism among citizens.
However, considering the present condition, the
main argument is that whether or not private companies
particularly the business institutions in the developing
countries like Philippines are competent enough in
adhering to these social responsibilities and in
performing their obligations as integral partners of the

2nd SIMPI-ICUS Conference Research Entry

state in promoting welfarism for the citizens. To

localized further the study, the researchers focused on
two private corporations located in Cordillera
Administrative Region namely PHILEX Mining
Corporation
and
Hydroelectric
Development
Corporation (HEDCOR).
PHIEX MINING CORPORATION was
incorporated in the Philippines in 1955 and has
been listed in the Philippine Stock Exchange since
November 23, 1956. Philex Mining Corporation has
been operating the Padcal Mine in Benguet for the past
57 years primarily using the underground block caving
method. The mine is one of the oldest operating mines
in the country and provides PMC its biggest source of
revenue. It is also the first underground block caving
mining operation in the Far East. The company vision
is to be a highly respected, world-class natural resource
company committed to deliver excellent value to our
investors, employees, and other stakeholders. As of
December 31, 2012, Philex Mining has 44,742
stockholders, with 38.05 percent of its outstanding
shares owned by foreign nationals and institutions .
On the other hand, HEDCOR is an ISOcertified renewable energy company with a mission to
develop and operate efficient hydropower systems. The
company vison is to produce two billion (2 B) kilowatthour of cleanergy (clean energy) by 2020. HEDCOR is
a subsidiary of the publicly-listed ABOITIZ POWER
Corporation, the holding company of all ABOTIZ
interests in the power generation, power distribution
and energy-solutions industries. The current major
accomplishment of this company is the installation of
14 megawatt hydropower plant in Sabangan, Mountain
Province last 2015. HEDCOR Company is now
operating 22 run-of-river hydrowater plants.
The research study, tends to inform the readers
regarding the indispensable role of private corporations
for the promotion of social welfare and development.
Moreover, this research study also elucidates the
politicization of CSR by examining the relationships of
these two companies with the Philippine government.
As an academic discipline, this research study aims to
widen the knowledge of the researchers regarding the
concepts of corporate social responsibility, corporate
governance,and welfare development. The researchers
seem the study significant because there is only
minimal volume of political researches that highlights
Baguio City as the location of study and its private
corporations as subjects of the study. In the language of
Political Science research, the concept of CSR has been
treated politically since voluminous literature indicate
the private sectors may aid the state in providing the
basic needs of the stakeholders in a community. CSR,
as political instrumentation, may increase state

efficiency in redistributing its resources to the citizens;

hence, creating a condition of well-being among people.
This research is beneficial to those individuals who
belonged to the academe specially the political
researchers, political analysts, policy makers, social
science professors, or even students of Political Science,
Economics and Business Administration.
2. RESEARCH OBJECTIVES
The main purpose of this study is to determine
whether or not the CSR of private organizations is
adhering to the principle of reciprocity and promoting
welfarism (social welfare). Moreover the following
statements are other research objectives:

To evaluate the quality and frequency of CSR

projects of selected private corporations in
relations with the promotion of social welfare

To evaluate the strategies of private corporations

in performing their CSR projects and to qualify
whether or not the CSE services implemented are
adhering to the principle of social reciprocity and
stakeholders needs

To analyze the political content of CSR of

corporations affecting the citizens decisionmaking such as their behavior (conforming or
defying) toward the private companies and their
level of participation to certain CSR programs

To examine whether or not CSR programs are

only utilized by private companies to pursue their
corporate integrity and not necessarily aiding the
government in promoting welfarism

To determine the contribution of selected private

corporations in terms of social and economic
development in the Cordilleran region

To determine the current relationship existing

between the government and private institutions
with reference to the advancement of social
welfare in the community

3. RESEARCH PROBLEM STATEMENT

The primary research problem is focusing on the
competency level of selected private corporations such
as Philex Mines and HEDCOR in rendering projects
and programs as relates to its CSR. Furthermore, it has
been also analyzed whether or not the CSR projects
and programs of these private corporations are really
substantiating state welfarism as provided by the
constitution. In addition, there is also a need to
determine the quality and frequency of these CSR
projects and programs since the common citizens
(stakeholders) are the primary subjects of CSR. Lastly,

2nd SIMPI-ICUS Conference Research Entry

as the political environment is concerned, there is also

a need to qualify the political content of CSR in
affecting the political behavior of citizens most
especially in decision-making.

4. CONCEPTUAL FRAMEWORK

The promotion of CSR may induce the

optimization of the welfare in the advanced industrial
welfare democracies. The regulatory role of public
bodies is to incorporate the inputs of corporations
(private and public), NGOs and other civil society
groups. In particular, initiatives and agreements
between employers and employees --illustrated by the
case for the reconciliation of work and family life-may improve citizens living conditions and optimize
welfare development. (Moreno, 2010) The CSR
interventions strengthened social and institutional
infrastructures to support the transfer of appropriate
technology and the application of upland agricultural
production systems. (Magno, 2004) Successful CSR is
perceived to be strongly related to innovative solutions
related to poverty alleviation efforts and the sharing of
this information and know-how, especially as regards
the complex and to foreign companies largely unknown
social, political or economic and cultural realities in
developing countries.
According to the proposed framework, corporate
social responsibility as a commitment of private
corporation to the state is directed for the betterment of
the community (well-being of the citizens). Private
corporations, as predicted by the framework, are
important economic agents of the state in attaining
development. However, it is also emphasized that

peoples participation is vital for the formulation of

beneficial corporate services. Social welfare as defined,
is the provision of minimum level of well-being for all
citizens sometimes referred to as public aid. Social
welfare, therefore, refers to a situation wherein citizens
achieved a good condition of living through the efforts
of both public and private sector. According to the
framework, it has been postulated that private
corporations such as HEDCOR and PHILEX in Baguio
City should subsidize the government in attaining
welfarism through institutional collaborative efforts.

5. )
RESEARCH
DESIGN
AND
METHODOLOGY
The researchers utilized qualitative research design
because the researchers collected data themselves
through examining documents to be given by the
corporations involved, observing the behavior of
citizens within a particular community and through
interviewing them. The researchers formulated a
research-protocol and the tend not
to rely on
questionnaires and instruments developed by other
researchers. The research-protocol (interview guide)
was consisted of two divisions- the first part is
concerned with the corporate profile of the company
involved and the second part is concerned with the
quality of CSR services rendered to the public. The
second part of the questionnaire is further categorized
into 6 dimensions of CSR services namely HEALTH,
EDUCATION, LIVELIHOOD, INFRASTRUCTURE,
CULTURAL
PRESERVATION
and
ENVIRONMENT. In addition, the researchers adapted
a case-study approach and phenomenological
qualitative research design in deciphering the CSR
service competency of the two companies and at the
same time, the experiences of the household affected
by these CSR services.
The researchers conducted interview method and
content analysis in obtaining and understanding the
data required by the research study. The researchers
visited the immediate community sponsored by the
selected corporations such as in Barangay Ampucao
and in Barangay CAMP 3, Padcal, Benguet for the
Philex Mines and in Barangay Beckel and in Barangay
Bineng for the HEDCOR Company. The researchers
performed a face-to-face interview as guided by the
originally-formulated interview questions to at least 70
participants that were purposively selected (35
participants for Philex including 3 participants for the
company and 35 for HEDCOR including the HEDCOR
Community-relations Manager) that are purposively
selected such that the participant must be a genuine
resident of the area. In interpreting the gathered data,
the researchers adhered descriptive statistics especially
such as frequency distribution and measure of central

2nd SIMPI-ICUS Conference Research Entry

tendency. The researchers also performed the

Centering Resonance Analysis (CRA) in interpreting
the data by which the researchers aimed to centralized
the research themes into one linear model to represent
holistically the quality of CSR services and programs
implemented by PHILEX Mining Corporation and
HEDCOR. The sample model of CRA is as follows:

A.) THE COMPANIES

Uniliear Thematic
Modeling

6. Scope and Limitation

The researchers only focused on the areas within
the province of Benguet, Philippines in conducting the
research study since there was a research policy issued
by the institution regarding the territorial proximity to
conduct study within or nearby places of Cordillera
Administrative Region for the security of the student
researchers. However, the quality of this study has not
been aggravated because the researchers performed indepth data gathering and cross examining the
information gathered about PHILEX Mining
Corporation and HEDCOR.
As the limitation of the study, the researcher did
not focus on comprehensive analysis in the equity
shares, human resource management strategies and
company revenueof the two companies in both
domestic and global market since it is believed to be
the concerned of student researchers enrolled in
business courses. However, the main goal of this
research is to determine the quality of CSR services
rendered by these companies as experienced by the
stakeholders in selected areas so it is rational to adhere
with the qualitative approach.

7. RESULTS AND DISCUSSION

DEMOGRAPHIC PROFILE: The following two tables
summarizes a brief demographic profile of the participants
and brief information about Philex Mining Corporation and
HEDCOR Company that are both located in Benguet.

Table 1 shows a comparison between Philex MinesPadcal and HEDCOR. As observed, Philex Mines is
admittedly the larger earner in terms of company revenue in
2014 as compared with HEDCOR. In terms of company
operations, PHILEX Mines was also the first one to harness
natures potential as compared with HEDCOR. However, the
CSR services rendered by the two companies have the same
core competencies focusing on health, education,
infrastructure and environment. Regarding the CSR funding
mechanism, the company has almost the same range of
budget allocation to implement their projects; however, the
amount may be differ in accordance with the annual revenue
of the company and its income tax paid in the government.
This analytic assessment based on the company profile
proves that the two private companies despite of varying
industrial competency such that Philex specialized on mining
while HEDCOR on hydropower showed commitment to their
stakeholders and adhered to the principle of
social
reciprocity in the manner that these two companies benefited
from nature (environment); thus, it is a moral imperative to
reciprocate these benefits by serving the community through
philanthropic services. Thus, it can be inferred that Philex
Mining Corporation is maximizing mineral resource for

2nd SIMPI-ICUS Conference Research Entry

community development while HEDCOR Company is

developing the undeveloped communities through clean
energy.

RESEARCH DATA:

B.) THE STAKEHOLDERS

Table 2 shows a brief demographic profile of

participants in the research study. As observed in two
companies, there are equal number of participants invited for
the study to maintain consistency in the sample size.
Participants for Philex includes 4 Company representatives (1
for Social Development and Management Program and 3
Company Engineers form Padcal site), 4 barangay officials of
Barangay Ampucao and a total of 27 common citizens (at
least 5 years of residence) from Barangay Padcal and
Barangay Ampucao, Benguet while participants for
HEDCOR Company includes 1 Company Representative
(HEDCOR-Community Relations Department), 2 local
government officials and a total of 32 common citizens from
Barangay Beckel and Barangay Bineng, Benguet.
In terms of the year of residence, Philex Mining
Corporations participants had acquired higher average year of
residence as compared with the HEDCOR participants.
However, in terms of percentage distribution according to
gender, the number of male participants are higher for Philex
but the number of female participants are higher for
HEDCOR. For the locus of the study, the researchers
considered Barangay Padcal and Barangay Ampucao for
Philex because these two barangays aside form the
consideration of territorial proximity, are included in the lists
of immediate sponsored community by Philex Mining
Corporation while same consideration has been applied for
selecting Barangay Beckel and Barangay Bineng for the
HECOR company.

The table shows the significant pillars of CSR services

that need to be integrated by the company namely HEALTH,
EDUCATION,
LIVELIHOOD,
PUBLIC
INFRASTRUCTURE, CULTURE PRESERVATION and
ENVIRONMENT. The two companies has almost the same
strategies in performing CSR services in terms of
health,education and environment, such that both companies
offers medical missions and scholarships among its
stakeholders and performs tree-planting activities in the
sponsored communities. Regarding CSR services on Culture,
both companies need improvement in incorporating projects
or programs regarding culture since this aspect maintains
coherence and solidarity among citizens of the community.

2nd SIMPI-ICUS Conference Research Entry

ANALYSIS OF CSR OF TWO COMPANIES:

missions, meron din kaming free lectures and simulationtraining regarding first-aid so that the people will be
informed. (Translation: Aside from free check-up sponsored
by the company, we also conduct free first-aid lectures and
trainings so that the people will be informed [about safety
and immediate medical support).
In addition, the Sto. Nino Hospital constructed by Philex
Mines in Padcal accommodates at least 350 out-patients daily
who enjoyed the benefits of free medicines and check-up.
Meanwhile, HEDCOR Companys CSR Services on
health is almost the same as Philex Mines; however, its
quality and range of health services offered by HEDCOR
were perceived as only satisfactory especially the residents of
Barangay Beckel but very satisfactory for the residents of
Barangay Bineng. This varying sentiments of HEDCOR
participants from Beckel and Bineng are heavily affected by
the community development projects initiated by HEDCOR
in the area of Bineng since this company has installed 2
hydropower plants (Bineng Hydro 1 and Bineng Hydro 2).
To substantiate this claim, Barangay Bineng participants
generally admits that HEDCOR really provides good CSR
services on health. In fact, the following testimonial of 46year old woman participant whose husband is working in
HEDCOR elucidates that HEDCOR is very philanthropic in
giving such services by saying Merong medical service ang
HEDCOR at nagbibigay [sila] ng free medicines. Sa totoo
lang, mababait ang medical personnels ng HEDCOR kapag
mga medical missions at welcome namin sila with
openheart. (Translation: There is an evident medical
service offered by HEDCOR. HEDCOR gives free medicines.
As a matter of fact, the medical personnels were so kind
during medical missions at we always welcome them with
open heart. ) However, there are few number of participants
such as a 62-year old woman claimed that CSR Health
services such as check-up of HEDCOR in the barangay were
conducted three years old.

A.) CSR HEALTH PROGRAMS AND SERVICES. CSR

services on heath pertain to all programs and services that
contribute for the physical and psychological well-being of
an individual. As noticed in the table, the common CSR
services of two companies HEDCOR and PHILEX include
medical missions and distribution of free vitamins and
medicines.
Majority number of the participants for PHILEX Mines
in Barangay Camp 3 (Padcal) and in Barangay Ampucao
agreed that the quality of medical missions rendered by these
two companies are very satisfactory since PHILEX Mines
offered a wide-ranged health services from free physical
check-up to hospitalization subsidy most especially to its
employees. In addition, Philex Mining Corporation, during
its medical missions, also offers free first-aid lectures as
Engr. Ochoco states Bukod sa free check-up during medical

Still, Bineng participants really sensed the commitment

of HEDCOR Company in providing good health services
since Barangay Beckel participants only treat HEDCOR as
only private company erected in their barangay that renders
minimal effort in rendering health services in Barangay
Beckel. As a matter of fact, about 700 people recently
became the beneficiaries of three separate medical-dental
missions staged jointly by Hedcor and Luzon Hydro in
barangays Ampusongan and Kayapa in Bakun (Benguet) and
in Poblacion in Sabangan, Mt. Province. The medical
missions, held last December 5, 6 and 7, were worth
PhP490,000 to accomplish in partnership with several civic
organizations such as Rotary Club and the Philippine Dental
Association. The remaining medicines were donated to the
Rural Health Offices of Bakun and Sabangan.

2nd SIMPI-ICUS Conference Research Entry 10

2014-2015. Moreover, Barangay Captain of Ampucao, Mr.

Eddie Amuasen admits that CSR services of Philex in the
Community are highly beneficial for the community since the
local government and even the municipal government have
limited financial resources to finance the needs of students.
As compared with the HEDCOR in terms of the coverage of
scholarship grants, PHILEX-MINING CORPORATION
enormously supports those students who enrolled in courses
related to mining and business management such as Mining
Engineering.
By analyzing the quality of CSR services on education of
the two companies, the sponsored communities are highly
satisfied. However, the quantity of the beneficiaries regarding
free education shall be monitored not only the sponsoring
private corporation but also local government units through
conducting a consolidated monitoring scheme about the
number of students in a community since it is believe that
education is one of the catalysts to boost the efficiency of the
state.

) CSR EDUCATION PROGRAMS AND SERVICES.

The CSR services of the two companies regarding education
include educational subsidies through scholarship grants and
educational supplies distribution.
According to Barangay Bineng participants, HEDCOR
offers scholarship for high school and college students.
However, these scholarship grants can be only avail by
students whose parents are not employed in the company. To
supplement this fact, according to the interview with Mr.
Romy Catingub of HEDCOR-Community Relations Officer,
HEDCOR had already given scholarship grants at least 140
high school students and at least 342 college students as of
2015 (i.e 482 scholars). In addition, the scholarship grant of
HEDCOR-Company is applicable to all courses to motivate
and empower the student beneficiary in dealing with
academic life.
On the other hand, PHILEX MINES-SMDP has already
spent at least Php 72.04 Million from 2003 to 2014 for its
education programs that includes scholarship grants and
subsidies to elementary, high school and college students as
divulged by Ms. Nancy Molitas. To elaborate further, Philex
Mines has subsidized private high school education
benefiting at least 790 high school students for academic year

C.) CSR INFRASTRUCTURE FACILITIES. The two

companies, when it comes to CSR Services regarding CSR
facilities, have performed excellently. In fact, field interviews
showed that majority of the participants acceded that
HEDCOR and PHILEX have been transforming the

2nd SIMPI-ICUS Conference Research Entry 11

community through building of schools, road rehabilitation

and multi-purpose hall construction. For instance, the
Barangay captain of Ampucao, Mr. Amuasen admitted that
Philex really helped in transforming the community by
constructing the Barangay Ampucao Barangay Hall and its
sports gymnasium. In other barangay, Barangay Padcal for
instance, PHILEX Mining Corporation, pioneered the
establishment of PHILEX MINES elementary school.
Furthermore, Philex also helped in building classrooms.
Moreover, the PHILEX-SMDP, the main agency of the
PHILEX Mining in providing CSR programs and services,
admitted that there were about Php 223.4 million spent for
infrastructure projects from 2003 to 2014.
On the other hand, HEDCOR company also performed
very satisfactorily in terms of public infrastructure
development specially in Barangay Beckel and Barangay
Bineng. Hedcor Inc., as wholly-owned subsidiary of
AboitizPower, in partnership with Aboitiz Foundation and
Aklat, Gabay, Aruga tungo sa Pag-angat at Pag-asa (AGAPP)
Foundation recently turned over the newly-built AGAPP
Silid Pangarap to Beckel Elementary School in 2013. The P
1.2 million project benefits about 67 kindergarten students
from Beckel Elementary School who now enjoy their new
classroom facility. Supporting the educational system of the
country through classroom constructions strategies is one of
HEDCORs corporate social responsibility.
The CSR services regarding infrastructure development
of the company are seemed to be beneficial and provides
welfare for the stakeholders. However, in Barangay Ampucao
for instance, Captain Amuasen admitted that the PHILEX
Mining Corporation is independently formulating its plans
regarding infrastructure without considering the real demands
of the citizens. The barangay council found it a problem
because it missed a chance to include the possible
developments in its barangay development plan or annual
investment plan. In perspective, the barangay has no power to
intervene through rigid monitoring the plans promulgated by
the said company; therefore, conflict of interests may be
evident and the citizens welfare may be aggravated in the
said community. On the other hand, some participants of
HEDCOR Company perceived that the company rehabilitate
roads for their corporate advantage since the company
rehabilitated roads heading to location of their hydropower
plants or to their office in Barangay Beckel.

D.) CSR-CULTURE PRESERVATION PROGRAMS.

Culture preservation efforts refers to actions and strategies to
unify people in a community through empowerment of
culture. CSR programs about culture preservation is slightly
evident in the featured sponsored communities of HEDCOR
and PHILEX MINING. Thus, the two companies must
incorporate culture preservation programs through
community exhibits, ethnic presentations, etc.; thus, the
participants will become more cooperative with the advocacy
of the company. Moreover, boosting the morale of
Cordilleran culture will also amplify the companys
reputation for its local stakeholders.

2nd SIMPI-ICUS Conference Research Entry 12

Camp 3 (Padcal), the Philex Mining Corporation

satisfactorily developed coffee-manufacturing industry and
the weaving industry in which the women sector are the
primary beneficiaries. For HEDCOR Company, the
participants admitted that the company pioneered the coffeeplanting industry in Barangay Bineng; however, the
livelihood project in the area is not fully developed because
of production insufficiency since there were no equipment for
coffee-processing. In terms of livelihood loans, HEDCOR
awarded an amount of Php 75,000 each to its selected
employees to foster swine raising; however, common
stakeholders (non-Hedcor employees) found difficulty in
applying livelihood loans in the company.

E.CSR -LIVELIHOOD PROGRAMS. CSR services would

refer to economic-crisis mitigation strategies implemented in
the community to equip the stakeholders with effective
entrepreneurial skills. In terms of livelihood programs, the
two company, aside from job-creation is also actively
initiating livelihood seminars for its stakeholders. For
instance, Philex Mines has its aquaculture development in
Barangay Ampucao and coffee-manufacturing and weaving
industry in Padcal while HEDCOR has its coffee-planting
industry in Barangay Bineng.
In terms of the feasible number of beneficiaries,
Ampucao Barangay captain Amuasen stated that aquaculture
development in the barangay only benefited at least 4
families since the company found it strategic place for
aquacultural development because of the water supply
originating from the near reservoir. However, in Barangay

F.) CSR-ENVIRONMENTAL PROGRAMS AND

ACTIVITIES. The two companies exemplified tremendous
efforts in preserving the environmental vitality. In fact,
HEDCOR, as stated by Mr. Catingub, aimed to plant at least
9 million trees nationwide in the year 2017. Beside, the
HEDCOR company as based in the company vision to
provide 2 billion kilowatt-hour of cleanergy by 2020
indicates that HEDCOR has a serious commitment to
preserve the vitality of the environment by utilizing natural
energy instead of burning coal and petroleum for generating
electricity. Aside form this activity, HEDCOR is also

2nd SIMPI-ICUS Conference Research Entry 13

advancing vermi-composting (using worm to decompose

wastes) within the locality to lessen pollution in water and in
land. Moreover, the HEDCOR Company also revitalized Mt.
Apo by planting tree-seedlings on its side. Over half-million
trees were planted to reach the targeted land area which were
distributed to address different needs. The effort was mainly
directed to reforestation, roadside rehabilitation, riverbank
stabilization, and agro-forestry. The company spent over 15
million pesos for the project alone.

On the other hand, HEDCOR has different scenario.

Participants from Barangay Beckel perceived the CSR
services of HEDCOR as only moderately executed since the
participants perceived HEDCOR as only an office established
in the barangay but the participants form Barangay Bineng
affirmatively reacted that HEDCOR CSR services and
programs are well executed.

On the other hand, same scenario is applied for PHILEX

Mining Corporation since according to Engr. Ochoco, the
Philex Mining Company, though extracting the mineral
resources from the mountain, is also morally obliged to
revitalize nature by planting trees and effective slope
management by filling the mined area so that the mountain
will not be eroded easily.
In 2013, Padcal mine had planted a total of 305,590
seedlings of various forest- and fruit-tree species across 250
hectares of the newly and previously established areas at its
mine site, and another 140 hectares of the previously
established plantation areas for enhancement. This brought to
over 8 million seedlings of forest and fruit-bearing tree
species planted across 2,465 hectares of land in the host
towns of Itogon and Tuba (Manila Bulletin, 2014).

In general overview, table 4 provides an evaluative

analysis of the quality of CSR programs and services
implemented by two companies in selected barangays
according to the perceptions and sentiments of the 70
participants. Regarding the performance of Philex Mines, it
was generally admitted that the company excellently
performs its CSR services and programs in Barangay Camp 3
(Padcal) since the Philex Mines Office is located in the area;
however, the stakeholders from Barangay Ampucao
perceived the CSR services and programs of HEDCOR as
satisfactorily implemented.

Figure 1 applies the CRA technique in aggregating

various themes related to the research study. According to the
illustration, the CSR services and programs implemented by
the two companies can be understood as a means of personal
obligation in boosting the morale of the company (imagebuilding), as a political obligation that assists the LGU in
providing basic welfare services to the citizens and as a social
obligation that directly provides basic welfare services to its
stakeholders. In achieving welfarism, the companies should
be an effective subsidiary of the government in providing

2nd SIMPI-ICUS Conference Research Entry 14

minimum well-being for the citizens by collaborating with

the local government units.
As illustrated, there are significant percentage of the
participants (51.42%) who perceived that the companies
involved in the study performs CSR services as
manifestations of their social commitment in the community.
Both companies have the capacity to provide basic services
such as medical missions, scholarship grants, etc. directly to
its targeted beneficiaries. However, this scenario is perceived
by LGU personnels such as Barangay Captain Amuasen from
Ampucao as legally-incongruous since the real demands of
the stakeholders may not be necessarily addressed because
companies are insignificantly collaborating with the LGUs
concerned in their sponsored communities. Due to these
factors, the barangay funds are not able to be maximized and
conflict of interests may occur. In addition, this CSR
implementation may not really substantiate welfarism but
substantiate the image-building capacity of the companies
involved through media exposure and online documentation
if the companies are not collaborating with the local
governments. In the sense, the companies are only for profitmaximization.
Currently, the researchers found out the the quality of
CSR services implemented by the companies were highly
satisfactorily for the participants;however, the obvious
problem is that there are still small number of households not
benefiting from these services because of lack of awareness
and lack of information-dissemination. In achieving state of
welfarism, the companies should strategically dispensed its
CSR services and programs together with government sector.
However, in terms of monetary matters involved with the
government officials, the companies must conduct rigid
monitoring to avoid corruption and to ensure the proper
quality implementation of CSR services. In assessing the two
companies in terms of their CSR services in substantiating
state welfarism, the CSR services are notably satisfactorily as
perceived by majority number of participants; however, the
number of beneficiaries should be increase to ensure that
general welfare is effectively attained in the said
communities.

terms of national politics. As a matter of fact, the company

had showed obvious support to all national candidates that
are pro-mining.
Otherwise, HEDCOR Company, according to Sir
Catingub, remains politically-neutral whether in local and
national politics. Accordingly, the managers (team leaders) of
the company are not promoting any candidate in their office
since they believe in the spirit of democracy and free will of
its employees as voters.
As analyzed based on the sentiments pf the stakeholders,
the political stance of the companies has minimal effect on
the implementation of CSR services in the community. The
quality of CSR services and programs provided by these
companies are not necessarily sacrificed by the persons in
power; however, this may affect the coherence of institutions
(the government unit and private company) in providing
services to the residents.
8. CONCLUSION AND RECOMMENDATIONS
The research study proves that the two companies
HEDCOR and Philex Mining Corporation have satisfactorily
delivered and implemented their quality CSR services in their
sponsored communities. CSR programs and services on
health, education, and infrastructure are effectively
implemented as perceived by the majority number of
participants. However, in adhering to the principle of
government subsidiary in promoting welfarism, the CSR
programs and services to be rendered by the companies must
be frequent as possible especially on health services and
environmental
programs.
CSR
projects
regarding
infrastructure development initiated by the companies really
provide convenience among the participants of the study such
as the construction of school and cat walks in Padcal site and
multi-purpose hall in Ampucao by Philex and the
construction of school building in Beckel by the HEDCOR
Company. Though considered least important, CSR programs
regarding culture must still need to be implemented to sustain
social coherence or strong bond in the community and to
boost the enthusiasm of individuals to cooperate in
community decision-making involving the barangay
government and the private companies.
Corporate Social Responsibility (CSR), therefore, as a
political concept and as fundamental element of social
reciprocity, initiated by the private companies should aim to
increase the efficiency of the state for the provision of basic
welfare services. CSR programs, projects and services must
be implemented for the attainment of well-being and not just
simply image-building and popularity of the company.
Therefore, CSR as a fundamental component of a company
identity should be institutionalized such that the welfarism
among local stakeholders in a liberal democratic state will
become more feasible. The following are the
recommendations of the research study:

According to the interview among company

representatives of the two companies, Philex Mines company
representatives admitted that their company is non-partisan in
terms of local politics; however, it is a partisan company in

CSR as Significant Pillar of the National Laws. To provide

welfare for stakeholders through CSR services is only a
prerogative of a particular company. CSR programs and
services must be mandatorily implemented by the private

2nd SIMPI-ICUS Conference Research Entry 15

sector through the enactment of a law that will govern the

CSR practices of such companies and private corporations.
Though the Philippines has a Corporation Code (Batas
Pambansa 68), this statute only governs the activities among
shareholders of a particular corporation and does not contain
any provision regarding the implementation of CSR services.
Therefore, upon the enactment of law about companys CSR,
it is prognosticated that these companies will not only
performing for the maximum gain of profit but also for the
attainment of citizens welfare. In addition, let the CSR
services not only social responsibility of the private
companies but also a catalyst of welfare development among
citizens since a social responsibility can be performed with
minimum company efforts but genuine welfare services
requires commitment and passion to the communities. In
addition, the CSR services and programs implementation
must be monitored by a legitimized accrediting body to
measure the quality and quantity of CSR rendered by private
corporations.
CSR Services and Programs Funding. Based on the
interviews conducted among company representatives,
budget allocation to CSR funding is highly dependent on the
annual revenue of the companies. If the revenue is high, then
it follows a significant increase in CSR funding. However,
the predicament in this perspective is that welfare of the local
stakeholders may be aggravated since the implementation of
welfare services depends on the company profit. Therefore,
the study suggests that regardless of company revenue, there
should be a constant percentage of revenue to be allocated in
the CSR services regardless whether the company became
profitable or not in a particular year. Moreover, the local
government funds pertaining to basic welfare services should
be strategically combined with the company funds so that
purposeful services like medical aid, scholarship grants, and
livelihood loans can be feasible. In this sense also, strong
institutional collaboration among public and private agencies
can be achieved and sustained.
CSR Services and Programs Implementing Rules and
Regulation. Admittedly, the companies have the prerogative
to formulate and implement CSR programs and services in
their selected communities. The local government units are
seemed too passive in intervening the implementation of the
CSR projects. Therefore, the study recommends that CSR
programs and services must undergo critical scrutiny among
private corporations, the stakeholders and the government
unit in-charged to ensure the quality of the CSR programs.
Finally, the local stakeholders should also equip themselves
with productive skills (capability approach) to become
effective members of the community, active collaborators of
private sector and positive transformers of the state!
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Acknowledgments
The authors of this study would like to extend their
sincerest thanks to the Saint Louis University
administration, SLU-School of Humanities faculty
members, Philex Mining Corporation and Hedcor for
the success of the study.