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Women’s experiences as home-based traders in Metro

Manila: A case study of the neighbourhood store

Christine Bonnin *
McGill University

Abstract

In the Philippines, the home-based neighborhood variety store (sari-sari store) has
endured as, arguably, the most popular form of informal livelihood for women. Drawing
on research conducted in the Philippines in 2003, this article presents key findings of a
case study exploring the complexities and dynamics of the home-based store within urban
low-income communities in Metro Manila. The conceptual framework incorporates the
literature on the informal economy, complementing it with the more recent livelihoods
approach, which it is argued permits a more actor-informed and holistic interpretation of
informal trade. The aim of this paper is to shed light upon the specificities of this type of
informal home-based retail activity and on women’s work and experiences as operators
in the context of recent economic hardship and housing insecurity. Furthermore, it
expands upon previous academic literature on this type of informal venture by addressing
some of the gender dimensions of this activity.

(*Christine Bonnin, Department of Geography, McGill University, Montreal, Canada.

Email: cbonni@po-box.mcgill.ca)

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Introduction

While women in the Philippines, as elsewhere in Southeast Asia (Alexander and

Alexander 2001; Leshkowich 2003; Milgram 2001; Eviota 1992) have historically played
an important, even central, role in market trade and small-scale enterprises, the expansion
of the informal economy and women’s trade as a consequence of global economic
restructuring is a phenomenon of more recent times. Researchers have demonstrated
how the intersection of economic restructuring and liberalisation policies with gender
ideologies and local socio-economic conditions have been a major contributing factor
that has led to the overrepresentation of women in informal work, such as small-scale
trading (Chen 2001; Beneria 2001; Seligman 2001). In the Philippine context, the
colonial legacy of landlessness and rapid urbanization of the National Capital Region
have affected ongoing rural-urban migration, maintaining a constant labour surplus in the
city and depressing wages. Economic reform and liberalisation, executed under various
structural adjustment programs, and the after-effects of the Asian Financial Crisis of
1997, have produced a state of chronic unemployment and underemployment and rising
commodity prices, eroding the ability of households to maintain an income level
necessary to meet their basic requirements (Illo 2002). In order to cope, women have
increasingly taken on informal activities, most commonly in small-scale trade and
services, or under subcontract arrangements as home-workers (Pineda Ofreneo 2002).
According to estimates by the International Labour Organization (ILO), between 1994
and 2001, the informal economy comprised 73 per cent of women’s employment in the
Philippines outside of agriculture (ILO 2002).

The large role that women play in the informal economy has drawn increasing
recognition and support from governments, development planners and non-governmental
organizations. In the Philippines, as elsewhere, the “engendering of development”
through market-led micro-level interventions, targeting women’s informal entrepreneurs
in particular as a more viable alternative approach to economic development and poverty
has been expanding, largely in the form of microfinance (Rankin 2001). This basis for
this shift in approach stems from research which has demonstrated that, worldwide,
women appear to undertake the majority of productive labour, have a higher propensity to

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spend their earnings on the collective welfare of the household, and are more likely to
pay back loans, as over men (Kabeer 1994). Nevertheless, the heterogeneous nature of
women’s informal entrepreneurial activities calls into question the relevance of universal
development models - assumed to work locally - if they are not sensitive to such diversity
and unable to make place-based accommodations. As such, a greater awareness of the
specificities of activities that women undertake is ever more important, including their
particular local socio-cultural, economic and political contexts so as to ensure that policy-
makers can be more responsive to the needs of target groups and do not instead
undermine existing systems and methods by which these livelihoods are being pursued.

Drawing on research conducted in the Philippines, this article presents key findings of a
case study exploring the dynamics of the home-based neighbourhood variety store (sari-
sari store) within urban low-income communities in Metro Manila. The purpose is to
shed light on some of the specificities of this type of informal home-based retail activity
and on women’s work and experiences as operators in the context of economic hardship
and housing insecurity. The research also expands upon previous academic literature on
the neighbourhood store in the Philippines (Dannhaeuser 1980; Silverio 1982; Chen
1997) by addressing some of the gender dimensions of this activity.

Conceptual Framework

Early perspectives on informal activities used the dual economy ‘informal sector’
paradigm (ILO 1972) and focused largely on characteristics of the enterprise (e.g. small
scale of operation, easy of entry, family ownership, labour-intensive, no need for formal
training, etc.). These were subsequently critiqued for their failure to recognize the
subordinate and exploitative linkages that characterized the relationship of the informal
sector with the formal, an expression of the uneven development of capitalism (Moser
1978), and for overlapping of formal/informal activities that more accurately represents a
continuum of activities than a dichotomy (MacEwen Scott 1979). Later structuralist
approaches of the 1980s were concerned with the relationship between the persistence
and growth of the informal economy and the global economic restructuring of productive

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relations as a consequence of recession, structural adjustment reforms and increased

competition (Meager 1995, pp265).

While these informal economy perspectives provide a good way of conceptualizing

women’s trade activities as a coping strategy by situating this within wider structures of
economic power and social change, the general privileging of structural factors in this
body of literature means that social actors, their practices and strategies are often less
emphasized. The framework for this article thus leans upon a livelihoods approach to
conceptualise and analyse women’s informal trade, which enables a holistic treatment of
the multiple ways individuals (or groups) “strive to make a living, attempt to meet their
various consumption and economic necessities, cope with uncertainties, respond to new
opportunities, and chose between different value positions” (Long 2000, pp54). As such,
the focus encompasses economic as well as socio-cultural aspects and pays attention to
both market and non-market, productive and reproductive activities (Whitehead 2000).
Methodologically, a livelihoods approach entails identifying and investigating assets,
vulnerabilities and dimensions of access and how these are mediated by social relations,
ideologies and institutions (Ellis 2000).

The Home-based Neighbourhood Variety Store

While the specific origins of the sari-sari store are unclear, it has been suggested that its
precursors lie with the start of Philippine-Chinese trade during the Sung dynasty (1127),
and the introduction of the trading post to the Philippines (Silverio 1982). Today, found
in both rural and urban areas, the sari-sari store is arguably the most popular type of
informal activity undertaken by women in the Philippines, and in 2001, comprised a
remarkable 95 per cent of all retail enterprises in the country (Digal and Concepcion
2004)1. The total number of sari-sari stores in the Philippines is also growing, estimated
to have increased by 11.2 per cent in 2003, and 14 per cent in 2002 (Manila Times
17/01/2004). Sari-sari stores are located directly within residential settings, giving them
an important locational advantage as they are more convenient to for residents to access
than stores in commercial areas.

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Sari-sari stores sell all matter of basic necessities. A common inventory would include:
food items such as canned food, noodles, rice, eggs, milk, oil, snacks, soft drinks, and
sometimes fruits and vegetables and cooked foods; spices; cleaning products; toiletries;
cigarettes; and phonecards. The stores are frequently located in a room at the front
section of the house, facing the street. Usually, a large window will serve as a counter at
which a customer will request items, and thus they do not have to enter the home space.

A survey recently undertaken by the market research group AC Nielsen in 2003 (Manila
Times 12/01/2004) reported that Filipinos continue to prefer purchasing from sari-sari
stores over larger grocery stores and the modern supermarket chains that are trying to
gain a stronger foothold in the Philippine market. A number of reasons for this were
cited, including convenience, but also the ability to purchase goods on credit, the sense of
friendly relations, dependability between vendor and patrons, and the availability of
goods in quantities and prices that are suitable for lower income budgets.

Methodology

The study draws from qualitative in-depth interviews with 30 women traders and was
undertaken over a three-month period in 2003. As well, a focus group discussion
facilitated by the non-governmental organization, PATAMABA (the National Network of
Informal Workers in the Philippines), was held with a group of traders who had
previously been interviewed. Interviews were also held with representatives of various
government agencies, local government officials, non-governmental organizations and
micro-finance institutions, and conversational interviews sometimes took place with other
household members if it was convenient.

With a current population of just under 10 million (DTI 2004), Greater Metropolitan
Manila is composed of thirteen cities and four smaller municipalities, which are divided
into barangays, neighbourhoods that make-up the smallest political subdivisions.
Interviews were conducted in three low-income barangays, all with very sizeable
populations experiencing insecure housing2: Welfareville in Addition Hills,
Mandaluyong City, with a population of 14,000; University of the Philippines Campus, in

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Quezon City with a population of 16,000; and Balingasa, also located in Quezon City
with a population of 24,000.

Profile of Traders

The ages of the traders interviewed covered a significant range of the life course: the
average age was 41, while the eldest respondent was 68 and the youngest 20. The
majority of women were married, while one was single, one was widowed, and two were
separated. All of the women had attained a primary level of education, while many had
completed some high school, and three had university degrees.

While many of traders interviewed had been born outside of Manila, most were not
recent migrants and many had arrived as children with their parents, or after marriage.
Only one interviewee had moved to Manila within the past five years. Almost all had
come from the same island group of the nation’s capital, Luzon, from the provinces of
Isabella, Cavite, Bicol, Batangas, Nueva Ecija, Bataan and Quezon. However two came
from the island group of the Visayas to the south, from Leyte and Bohol. All cited better
employment opportunities in the city and lack thereof in the rural areas, as well as the
difficulties of securing a livelihood through agriculture as key motivating factors for
moving. Many also had relatives already in Manila which had provided an additional
resource and motivation for moving.

Although the focus of the research was upon a single livelihood activity (the store)
several traders had other income-earning activities, or sidelines, in addition to running the
store. Livelihoods researchers have pointed out that not just households, but the
individuals who comprise them often pursue a diversity of activities (Ellis 2000). The
sari-sari store is thus often just one of a set of individual and household livelihood
activities. For all but four participants, the household had additional sources of income
and almost half of the traders themselves had a second income earning activity. Yet, in
all cases traders regarded the store as their primary livelihood activity, and the one which
received the most time and labour. Common alternative activities were those that could
complement well with the running of the store, including the direct selling of

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transnational brand-name products on commission such as Avon Cosmetics or Triumph

underwear, or else taking on a border. All traders were self-employed, and hired no
additional assistance. Household members (spouse, children, or other relatives) often
assisted with the stores and three were jointly operated by a couple, nevertheless all but
one regarded themselves as the “head of the business.” In a few instances, causal labour
arrangements were based upon kinship relations (Tipple 2005) and reciprocal exchange,
such as in the case where a young woman who came from a rural area was working at her
aunt’s store part-time in return for board and lodging, so that she could attend university
in Manila. In regards to duration of the business, many of the stores had been recently
opened within the past three years, while 40 per cent had been operating for six or more
years, and the oldest had been running for 30 years.

Local Impacts of Economic Crisis

The Philippines has suffered from numerous economic downturns since the 1970s, which
have been largely attributed to the massive debt incurred under the presidency of
Ferdinand Marcos, and the economic restructuring measures that were subsequently
imposed under various economic stabilization programmes guided by the International
Monetary Fund and structural adjustment programmes by the World Bank (Chant and
McIllwaine 1995; Kelly 2000). In addition to the liberalization of interest rates, removal
of trade restrictions and the adoption of market-oriented exchange rates, these reforms
called for cutbacks to social services, the removal of subsidies on basic commodities and
the charging of user fees for public services. By 1988, 50 per cent of the nation was
classified as at or below the poverty line, wages had plummeted, the unemployment rate
had shot up, and by 1988 an estimated two thirds of the total workforce was engaged in
informal activities (Chant and McIllwaine 1995).

More recently, the Asian Financial Crisis in 1997 is said to have led to an increase in
some types of informal activities such as self-employment due to lay offs (Yasmeen
2001), and negatively affected some, particularly home-based subcontract workers in the
handicrafts industry who have seen stagnant piece rates and declining job orders coupled
with rising costs of living (Pineda Ofreneo 2002). Some of the personal experiences of

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sari-sari micro-entrepreneurs in this study appear indicative of the local impacts of

larger-scale economic problems taking place in the Philippines. This is most clearly
evident through women’s responses on the motivating factors that influenced their
movement into informal employment and on the changing business fortunes they have
met with. The majority of women interviewed had formerly been employed in waged
work3 positions prior to opening their business and made the transition to self-
employment as a consequence of job displacement. A number of interviewees reported
being laid off in the period following the Asian financial crisis (1997), often from
employment in export-oriented industries and factory labour. As has also been reported
in other studies of the economic crisis, several women explained that the store was started
out of the necessity to find an alternative source of income when their spouses had lost
their jobs due to company closures (Reyes et al 1999). For many women, in fact, it was
their spouse’s job separation (compensation) pay that was used as the start-up capital for
the store.

Aling Merl4 aged 50, worked for eight years in Singapore and one year in Taiwan as a
domestic helper, but felt homesick and returned permanently in 1997, opening up a sari-
sari store with her savings. In her opinion:

It’s very hard to stay here, to live here [in Manila], because of the economic
crisis. That’s why many Pilipinos go abroad, just to work and then they come
back here to start their own business, just like that. Right now it’s very hard to
find a job here and they give you only a small salary, unlike abroad. And there is
also too much competition...too much business competition here, and some of
them go bankrupt...maybe because of, (laughs) because of our leader! Politics or
what, I don’t know!”

Women’s sense of insecurity in regards to formal waged employment was evident in numerous
responses where traders frequently stated their personal preference for self-employment as the
reason why they decided to open a store. Many commented on the independence or control
one gained through being self-employed or one’s “own boss” where one did not have to worry
about future lay-offs. As one trader noted: “I prefer to be self-employed rather than to be an
employee, where later I’ll be fired (laughs)…you are the master of your business!” Another
common response was that self-employment offered the possibility of making more money,

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reflecting the perception that as paid employees, one could earn only a small and fixed amount
compared with entrepreneurship where there was always the possibility of earning beyond this.

Macroeconomic difficulties that affect ‘formal’ industries can also have direct impacts on
informal enterprises themselves. The case of Aling Josie provides a good illustration of the
linkage between informal enterprises such as the sari-sari stores and the closures of
surrounding businesses. Since the early 1990’s Aling Josie has operated a sari-sari store with
attached carinderia (food stall) where people can either eat-in, sitting on a bench in front of her
house, or else take-away their food in plastic bags (balot). She recalls that at the start she used
to prepare three full meals a day, serving seven to eight different dishes at lunch and dinner
time, in addition to offering merienda (snacks) twice daily. Her largest groups of customers
were the office-workers employed at nearby businesses. However, she says that many of these
companies have shut-down in the last five years. She has had to cutback on her carinderia,
now serving only meals at lunchtime with only 3 or 4 selections. She estimates that her daily
customers have dropped from 120 to 20 and her income from the store is steadily dwindling,
causing to her worry about its future.

Gender Roles and Expectations

Leaving formal employment upon marriage or after having children is another motivating
factor behind women’s decision to open up a sari-sari store. A middle-aged store
operator named Aling Rose for instance, used to work in a bookstore, but quit after she
got married in order to raise her children because “that was the expectation.” She had
contemplated going back to work after her children were older, but her husband told her
that then they would have to hire a maid, which he argued would basically equal her
earnings, in which case it would be better if she opened up a sari-sari store instead!

Aling Rose’s experience is reflective of dominant gender ideologies in the Philippines,

which model men as the household breadwinner and women as caring, self-sacrificing
mothers (Isreal-Sobritchea 1996). Women are thus regarded as secondary or
supplemental earners, even when they are an important or even the key earner of a
household (Gardiner Barber 1996; Kelly 2000), which has translated into lower wages

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and gender-based discrimination in the hiring process and during layoffs (Illo, 2002).
Although women fully participate in economic life, the common expectation is that once
a woman marries, reproductive work should assume primacy over her other ambitions,
thus acting to curtail her mobility and ability to seek income activities outside of the
home space (Illo 2005). A common strategy that women use in order to cope with this
situation is to employ a domestic helper. However, this is generally a class-based
strategy and low-income women usually must instead resort to diverting some of their
duties to other female household members if there are any. Therefore, like other home-
based income-generating activities, the sari-sari store is considered helpful for the
flexibility it permits women to overlap their responsibilities (Tipple 2005).

In addition, although the role as the family financial provider is an important aspect of
male gender identity in the Philippines, women are responsible for ‘controlling the purse
strings,’ in terms of managing the household budget and daily purchases. If there is not
enough money available to meet these requirements, it also generally falls upon women
to make up for the shortfall, whether it be having to borrow funds to help meet the
immediate daily needs, or to start-up a business venture for extra income (Heinonen,
1996).

Long Hours

When asked to comment on issues regarding concerns over the conditions of their work,
a few described the limited physical space, and the possibility of theft. However, long
hours of work were the most commonly identified issue. The flexibility of home-based
employment means that although women are enabled to overlap productive and caring
labour this integration of tasks often means that their workday is stretched. Indeed, one
trader referred to herself as “three-in-one” alluding to the multiple identities she assumes
and simultaneous tasks she undertakes as mother, wife and shopkeeper. Sari-sari traders
worked fifteen and a half hours per day on average, six or seven days of the week, and
often discussed putting in very long hours, a finding echoed in another studies of home-
based enterprises (Tipple 2005). For Aling Joy, a middle-aged trader, her “competitive
advantage” over the other stores is to remain open 24 hours a day in order to maximize

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the opportunities for selling. She alternates with her husband in minding the store
throughout the night. Traders who also sold meals at their stores seemed to have the
longest hours, many of them waking up between 3 and 5am in order to go to the market
for cooking supplies in order to have everything ready for the breakfast rush. On the other
hand, one trader mentioned that she had more time now compared with when she used to
be a salaried worker and had to allocate four hours each day to commuting time to work
due to the traffic.

Store Earnings

There was a wide range in the reported gross earnings of individual sari-sari stores, and
estimates ranged between 700-15,000 PHP5 per week. However, several traders
explained that this weekly amount was highly inconsistent, firstly due to fluctuations in
weekly sales, and secondly, the erratic collection of large sums of money at times when
customers paid off goods purchased on credit (utang), which will be further discussed
below.

Women usually attributed low profits to having a limited or “incomplete” stock. The few
stores that appeared to be doing well (profit-wise) by comparison were located adjacent
to main roads and were larger in terms of both physical size and capital, offering a wider
range of stock. This resulted in a larger customer base and one that was more likely to
extend beyond the regular network of community exchange that formed the basis of most
transactions for small stores located within residential neighbourhoods (see also Curry
2005). For these smaller stores, the majority of regulars were close neighbours or
relatives.

At the time of research many stores appeared to be surviving on very low profit margins,
traders stating that their stores were “just breaking even,” concerning, in light of the fact
that 69 per cent of those interviewed said that there store was the main source of
household income. Yet, despite the low earnings, most women interviewed see their
stores as vital to household survival. As stated by one trader: “The basic needs, bills,
water, food…all comes from the sari-sari store.” Other women explained that having the

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store has alleviated some of the financial strain on the household. According to Aling
Grace:

Before, when we did not have the store it was hard for us…we had to depend on
the salary of my asawa (spouse)…the budget was lacking so I had to resort to
taking loans. But now with the sari-sari store we are able to make ends meet…the
sari-sari store makes life a little bit easier.

In many instances there was also found to be a great deal of fluidity in terms of
production and consumption, a fine line sometimes drawn between what belongs to the
business and what belongs to the home. Traders often explained that it was common for
stock to be diverted from sale for use by the household. In the case of prepared foods,
often household meals were from the same food that was being prepared for sale - a time-
saving feature for women – and unsold leftovers could be consumed. In a few cases
traders described the problems they had in preventing their children or spouse from
taking items from the store for personal consumption.

Beyond the flexibility this type of activity permits women, many also expressed that they
thought that the sari-sari store was a particularly good choice of enterprise because of the
fact that it offers an immediate and daily source of income. Applying narrowly conceived
profit-based measures of enterprise success on their own would thus fail to capture the
ways in which these ‘marginally performing’ stores are still of critical importance –
something that is revealed only when studies consider how traders themselves determine
the worth of their enterprise (Turner 2003).

Enterprise Competition

A comment that is frequently made about sari-sari stores in urban areas of the
Philippines is their “ubiquitous” nature (Eviota 1992; Dannhaeuser 1983; Silverio 1982).
In his study of sari-sari stores in Dagupan City, Dannhaeuser (1980) found that
customers’ choice as to which store to patronize had more to do with physical location
(i.e. proximity to residence) than price level, product selection or acquaintance. Each
store, though adjacent, was spaced widely enough in order to be surrounded by a pool of

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neighbours who could form its regular base of customers. This situation resulted in
“territorial monopolies,” giving operators substantial freedom to adjust their prices.

In the low-income communities researched in this study, however, it was common to

find four or five stores located within the same short street block, all offering more or less
the same items for sale. In one case, three stores were situated side-by-side in
neighbouring homes. Thus, the extremely close proximity of stores to each another
meant that in this case, location alone was not enough to guarantee operators their
customers. It also meant that price manipulations were less possible. Traders
acknowledge that the oversupply is a problem, but feel rather limited in their ability to
actively compete directly with other stores. Many are quite concerned with maintaining
harmony and good standing with surrounding businesses, something that has been
referred to as the “traders’ dilemma” (Evers 1994), the conflict that arises out of having
to balance the need for accumulation while also meeting social obligations. For instance,
traders refuse to make significant changes to the prices of their goods because of the
potential conflict that this could cause. According to one trader’s spouse: “The strategy
for attracting and keeping customers is to price the products ‘right’… not to price it too
high but competitively, but at the same time, don’t price too low so [that] you gain
enemies of the other stores in the community.”

Housing as Both Asset and Vulnerability

Numerous studies have demonstrated the importance of the home as a productive asset in
urban areas of ‘developing’ countries - particularly for low-income groups - where it
often doubles as the site for an enterprise or where rooms are rented out (Moser and
McIllwaine 1997; Tipple 2005). Additionally, using the home as a space for
entrepreneurial activities saves the additional cost of renting out a separate workplace. A
recent comparative study of home-based enterprises in several different urban areas
(Cochabamba, New Delhi, Surabaya and Pretoria) found that in all cases, households
with home-based enterprises had incomes 25 to 60 per cent greater than households
without home-based enterprises in the same neighbourhoods, suggesting that they
contribute significantly to poverty alleviation (Tipple 2005). Despite the low incomes

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that home-based enterprises may earn the study suggests that they are indeed vital to
household security. However, the benefits of home-based enterprises can be
compromised to some degree when housing is insecure.

Over the past thirty years, the combination of rapid urban development, high population
density, rising poverty and increasing land prices in Metro Manila have resulted in a
serious lack of affordable housing. A large number of urban dwellers reside in informal
settlements despite government attempts to implement relocation schemes, and live under
the threat of possible demolition or eviction should the land need to be put into
commercial or other use. According to the National Housing Authority, as of 2002 there
were a total of slightly over 1.4 million households residing in informal settlements in
urban centres throughout the Philippines. Of these, 52 per cent were living in Metro
Manila (as cited in Porio and Crisol, 2004). In the communities studied in this research
the majority of women (65 per cent) were living in informal dwellings. For many,
insecure housing status is a source of anxiety. As described by Aling Corazon:

We are squatters…there is a Chinese owner but he doesn’t need the land at the
moment. He can demolish us anytime if he likes to use the land, if he wants to.
And then we [would] have to transfer again. If he came today…he [could]
demolish us, no problem…everyone here is like that.

Conflict and violence often accompanies forced evictions as this quote by one
trader illustrates:

My husband was shot by the police. Then police had to stop the demolition
because someone got hurt…our house used to be bigger before they demolished
us. We rebuilt. The police thought it was my husband who threw a rock at them,
so that’s why they shot him.

As this particular type of livelihood activity is so linked to the place of residence,

insecurity of housing is also strongly connected to insecurity of the business. Unstable
dwelling structures and crowded conditions also mean that destruction by calamities
frequently occurs. A massive fire took place in one of the research communities,
Welfareville on April 2002, allegedly caused by an unattended candle. It destroyed the
homes of 1,500 households and resulted in at least 10 million pesos worth of property

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damage (Flores, 2002). Aling Loida commented that the fear of another fire prevents her
from investing in expanding her range of stock, the risk of a repeat loss proving too great
for her: “I am afraid because sometimes we have a fire here. That’s why I cannot buy
any more items (for the store)…if someone cooks rice or something and then forgets
about it there [could] be another sunog (fire).” Her awareness of the instability of her
home/store has contributed to her decision against investing any further in her business.

Moser and McIllwaine (1997) point out that: “…home ownership is closely related to
tenure, and more specifically to residents’ perceptions that tenure will be granted. While
residents [grow] increasingly confident over time, longer-term doubt remains and
influences investment decisions.” Though they are referring more specifically to the
decision to transition from renting to ownership6, a similar observation might also be
applied to women’s investment in their enterprise. Aling Bing explained that she would
like to have legal title to her home, as she believed that this would ensure the security of
her business: “I want a permanent store…permanency of my business. This is a
government property so I have no land title…it’s just common knowledge that I am the
owner, but I am waiting for a title from the government.” For home-based enterprises
like sari-sari stores, the potential loss of housing as a result of either eviction or
accidental destruction is intrinsically linked to the security and sustainability of the
livelihood.

Marketing Strategies and the Social Embeddedness of Trade

Women sari-sari traders undertake a variety of strategies to maintain their pool of loyal
customers, attract new ones, and increase sales. Market transactions such as buying and
selling are often merged with complex social activities in order to “manipulate the laws
of supply and demand” (Seligman 2000). Since the seminal work of Karl Polanyi (1944),
economic anthropologists, sociologists and geographers have long argued that ‘pure’
market relations are somewhat of a fiction, as in fact ‘the economic’ is inextricably tied to
social and cultural aspects and relations. For stores in low-income communities, social
networks of reciprocity have very important implications for individual status,
community welfare, and store survival, and create a mutual dependence between

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households and traders. However, such socio-cultural mechanisms can also work doubly,
in some instances to strengthen, while at others to undermine, traders’ businesses (Curry,
2005; Kelly 2005).

Allowing ‘special customers’ to make credit purchases is a strategy pursued by almost all
of the traders in this study, although most have rather ambivalent feelings towards this
practice. The regular trade practice of offering items on credit, referred to as utang, is
socially expected and is extended to those who are regular, loyal customers (suki) of that
particular store7 in order to secure their patronage (Davis 1973; Dannhaeuser 1980). In
addition to credit, special favours such as discounts and extra portions are also expected.
Utang is especially helpful for cementing customer loyalty to a particular store in an
environment where the number of sari-sari stores is so great. Unfortunately, traders cite
collection of repayment as one of the biggest problems facing their business.

A key cultural mechanism of importance in the Philippines, involves maintaining

harmonious social networks (pakikisama) by being careful to avoiding causing a sense of
shame, inferiority or embarrassment (hiya) in others. This is vital to the maintenance of
good neighbourhood relations. It also means that storeowners frequently need to be
delicate in negotiating repayment: getting angry or upset at a neighbourhood customer
can work to undermine storeowners’ reputation and ties in the community. Some women
expressed feeling rather powerlessness to cope with customers who did not pay their
debt, as was the sense of feeling pressured into providing utang to prevent customers
from going elsewhere. However, not all traders felt constrained by this practice. A few
said they simply refused to give credit and saw no problem with it, while others limited it
explicitly to relatives, or to those who were known to be salaried employees who could
settle their bill at each pay-day. A few traders specifically refused to permit alcoholic
drinks on credit, as it was found from past experience that the amount owed can easily
get out of hand, with one operator even becoming bankrupt because of it.

Importance of Sari-sari Stores to the Neighbourhood

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When regarded at the community scale, the credit provided by sari-sari stores may act
for some as a partial buffer against household food and consumption shocks that would
otherwise be felt in their entirety as a result of customers’ highly inconsistent incomes. A
large number of residents of all three communities were dependent on unstable contract
employment, particularly in construction. It should be pointed out that despite the
problems traders associated with utang, many also felt that through offering goods on
credit they were fulfilling important socio-economic objectives in the community, thus
enhancing their social status. Here again, an evaluation of ‘enterprise success’ based
only on economic performance would overlook the other functions that the stores fulfil
and which women indeed consider of significance (Turner 2003).

Also important to community food security is the selling technique adopted by sari-sari
traders known as tingi and takal, which refers to dividing goods into smaller sized
portions than are usually available in the marketplace (e.g. selling vinegar or cooking oil
by the cup, or two biscuits instead of an entire package) making them more affordable for
individuals with very small amounts of disposable income at any given time. It also
allows for the purchase of spoilable goods such as milk for immediate use, as in the case
of people who do not have a refrigerator to store a whole container. Transnational
corporations have long used this method in order to penetrate low-income consumer
groups in the Philippines as elsewhere by small-sizing their products, such as selling
shampoos in single-use packages. However, these products then assume a known “fixed
price,” which then further limits traders’ ability to control the setting of prices. A few
women mentioned that they had the most power in setting prices with prepared foods,
particularly if one is reputed to have an especially good culinary ability.

Traders often reported that their ability to secure and keep customers depended a great
deal on their skill at socialization and their personality traits. Women thought that their
success partly owed to their ability to excel at chica-chica or small talk. Others said that
personal characteristics such as being “kind” or “charming” were vital. One trader
referred to the importance of “smiling and looking pleasant even when you are tired.”
Social interaction between patrons and vendors is another means of forging bonds of

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familiarity that will help ensure loyalty, and additionally, getting to know customers also
helps traders to assess creditworthiness (Silverio 1982).

Neighbourhood stores are also places for neighbours to linger and in some cases even
gather to socialize as a group for an entire afternoon or evening (Silverio 1982).
Consequently, sari-sari traders are known for being the community “news source” as
they become privy to wider networks of information. In one case, information that a fatal
accident had befallen a community member who had been working abroad reached a
neighbourhood sari-sari operator first because of her wide connections, and this trader
was put in the difficult position of having to relay the sad but important information to
that persons’ household. Thus, the sari-sari store as home-based marketplace is an
important location of both economic and social exchanges.

Suppliers

Sari-sari traders were found to have three key sources from which they derived their
supplies. First, traders selling produce or who also sold prepared food bought these items
in the local palenke (marketplace), generally on a daily basis. Second, soft drinks often
arrived directly to the store via a weekly delivery service for those who sold Coca Cola or
Pepsi products. These companies often offer small incentives to sari-sari traders so that
they will agree to only sell that particular brand. As Aling Patricia explained:

When you see the stores with signs [that have] their names on them, those are
provided by the soft drink companies. If you are a suki, that is one of their
promotional strategies. You make suki with them and then they will provide you
with the name of a store. It’s for free. Maybe they [will also] provide a chiller, a
vertical [refrigerator] where you can store your soft drinks. But if you are not a
suki then you won’t get it, you have to sell only the products of [that] company.

Finally, the bulk of store supplies were purchased in bulk from the wholesale grocery
stores that are commonly found in Metro Manila. Most traders also had a suki
relationship with these grocery suppliers and purchased their wholesale goods from only
one grocery store (also reported by Dannhaeuser 1980). Traders felt that these grocery
stores were the cheapest places to obtain these items and they were often conveniently
located quite near to the traders’ store/home or else a short jeepney ride away. Some

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stated that independent wholesalers also offered delayed payment (utang) on dried and
canned goods at no interest. Women found this especially helpful at certain times of the
year when there were additional demands on the household budget, such as when
children’s tuition payments are due, as it enabled them to continue running the business
at near normal levels.

Credit Arrangements and ‘Informal’ and ‘Formal’ Sources of Enterprise Support

In addition to the wholesale grocery stores, traders are also involved in a number of
supply-side credit relations. Almost all of the interviewees said that financial assistance
was the most pressing need for their business. The most common method women used to
access funds was through informal arrangements: either from spouses or relatives,
friends, neighbours, or informal financiers. Thus, credit networks are such that traders
are situated within a “hierarchy of interdependent relations as both lenders and
borrowers” (Southwold-Llewellyn 1994, pp7). Many operators took loans in order to
finance their enterprise, sometimes to expand the range of goods sold or to renovate the
store. More frequently, however, loans were used on an ongoing basis in order to
maintain the basic level of stock and ensure the day-to-day survival of the business.

Although spouses were the major source of funding for the stores, informal financers
formed the largest source of loans for the operators interviewed. These informal
financers travel door-to-door, offering small loans, and many also offer a variety of
household items and consumer goods for sale, such as blankets, CDs, DVD players, and
refrigerators on credit, to be paid daily on a rent-to-own basis. Despite their popularity,
informal financers are also renowned for charging high rates of interest. In fact, they are
also sometimes called the “five-six” because, over the period of a week, for every five
pesos loaned six will have to be repaid; a nominal interest rate of 20 percent (Kondo,
2003). For some traders, the daily payment to informal financers was almost half of their
gross daily income. As one store operator voiced: “I wouldn’t take another loan because
I could not make the repayment. Before, I [became] bankrupt because of the five-six…it
is like you are just working for them.” Despite these difficulties, it appears that informal
financers remain the most popular lending source because of they appear to cater best to

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the specific needs of traders. Their easily accessibility, in the sense that they “come to
you”, means that women do not have to spend long travel and waiting times away from
their store/home responsibilities in order to get a loan. The small, daily repayments also
appear at first more manageable than the repayment schedule of a bank loan, although
traders often found that the reality was less so. As well, the lack of requirements,
collateral and conditions to fulfil as compared to banks and microfinance programmes,
and the immediacy of the loan, also make this service more attractive to small traders.

In addition to informal loan sources, there were also a number of different government or
organizational supports (loans or livelihood training) being offered in each of the
communities researched, however only 11 of the traders interviewed were currently or
had ever been involved with these. In Welfareville, two different microfinance
programmes were operating, as was a livelihood credit-assistance programme under the
national Department of Social Welfare and Development. Many of the traders from
Welfareville were involved in people’s organizations that were support and advocacy
networks for people coping with housing insecurity. In Balingasa, a non-governmental
organization, PATAMABA was active, a multi-dimensional national organization which
offers livelihood training and education, credit-assistance, and promotes advocacy of
informal worker rights and networking and solidarity with other like-minded groups.
Local government livelihood credit-assistance and livelihood programmes were operating
in UP Campus. However, to explain this low level of involvement with livelihood
supports, many women said that they simply did not know about their existence, which
means that better dissemination of programmes seems rather important. In the case of the
microfinance programmes, some of the traders who were aware of it said that they simply
did not have time to make it to the weekly meetings that were a requirement. This lack of
awareness echoes a study by Pineda Ofreneo et al. (1999) which surveyed a sample of
500 informal workers and found that fewer than 27 per cent considered national
government agencies, NGOs or local government programmes a possible source of
support. Such findings reflect a lack of impact of existing organizational supports, and a
continuing isolation of urban low-income women from the various development
programmes and services available (ibid.).

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Conclusion

The label ‘informal economy’ encompasses a wide diversity of livelihood activities

undertaken by different social actors, and is not frequently disaggregated. This article
has endeavoured to explore both the negative and positive aspects of one such activity
and the experiences of women traders who are engaged in it. It is suggested that despite
its very slim earnings, the sari-sari store remains vital to households for its daily and
consistent income inputs and consumption smoothing ability. Additionally, the store
plays a wider role beyond the individual household, contributing to food security and
enhancing the social environment and building networks at the neighbourhood level.
Finally, there are particular conditions unique to sari-sari stores as compared to other
forms of informal livelihood activities, such as the importance of housing security and the
fact that they are undertaken largely by women who may not have the time to attend
regular meetings outside of the home, that warrant attention from service providers. The
intent here is not to romanticize ‘marginally productive’ enterprises or to argue that social
networks are not without their ‘downsides’ (Portes and Landolt 1996). Rather, it is hoped
that a more actor-informed reading of livelihood activities such as the sari-sari store, will
help to further encourage practitioners to see the importance of accommodating to the
complexity of livelihood activities and the needs of social actors, in terms of planning
design, service provision and enterprise evaluation. Additionally, it is hoped that this will
be of interest to other researchers studying the informal economy.

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1
Dannhaeuser (1980) reported that in 1969 sari-sari stores accounted for 70 per cent of all retail ventures in
the country, which highlights the endurance of this form of retail venture in recent times.
2
Statistics on housing insecurity were available only for Welfareville, where an estimated 60 per cent of
the population was housing insecure as of 1996 (MIMAP 1996).
3
Philippine labour market statistics do not clearly differentiate between formal (official) and informal
(unofficial) work categories. Rather, the categorizations used by the Department of Labour and
Employment and which have been used to provide estimates of informal employment are divisions between
classes of work such as “wage and salary workers,” “self-employed or own-account workers” and “unpaid
family workers.”
4
Aling Merl is a pseudonym as are all the personal names used in this paper. “Aling” denotes a title of
familiar respect for women.
5
At the time of research, 53 PHP=~1 USD
6
The actual experiences of housing and land security vary throughout Metro Manila. As Porio and Crisol
(2004) point out “The meaning and consequences of tenure vary by tenure status and ownership and
contextual characteristics of urban poor settlements.” For instance, in Moser and McIllwaine’s (1997)
study of Commonwealth, land tenure had never been granted, making it possible to own a home (and sell or
rent that home) but not the land on which that home was standing. This is also the case with one of the
communities in this study, Welfareville Compound, a government-owned property where many of the
residents own or rent their own homes but may face future relocation.
7
An in-depth discussion of suki and utang is found in Blanc Szanton, 1972

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