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EQUITY POLICY CENTER Iloilo City Philippines STREET FOODS Informal Sector Food Preparation and Marketing Gerald A. Barth 1983 Equity Policy Center Iloilo City, Philippines BESTAVAILABLE COpy ACKNOWLEDGMEN1S This monograph is the fmal report to the Equity Policy Center, Washington, D.C., on the Philippine portion of an international project being carried out on Street Foods in Senegal, in Bangladesh, in Indonesia, and in the Philippines. The research was funded by the United States Agency for Inter­ national Development (USAID). My wife, Mei-Jean, and I directed the research which was conducted in Iloilo City, Philippines. While this undertaking was discussed with numerous people at USAID/Philippines, the, project was coordinated through the office of Gary W. Cook, Health Development Officer, Office ofPopulation, Health, and Nutrition. The initial phase of the project, started in November, 1982, consisted of meetings and discussions in Manila with numerous people who had a potential interest in the research. The valuable assistance provided by these people was an important input into the study. Particular help was provided by those who attended two consultative meetings which were held in Manila. The project was accomplished while my wife and I were Visiting Research Associates at the Institute of Philippine Culture, Ateneo de Manila University. The computer processing was done at the University of the Philippines, Los Banos, under the direction of Dr~ Henry F. Magalit, who was instrumental in developing the sample design and who assisted with the analyses. The field work in Iloilo City was carried out from December, 1982, to December, 1983. During this time, the official value of the Philippine peso dropped from approximately 9 to 14 pesos per U.S. dollar. At the time that the questionnaires were actually administered, the average rate of exchange was approximately ten Philippines pesos for one U.S. dollar. A primary intention of the study was to obtain as much local support as possible. In Iloilo City, the project operated under the umbrella of the Regional Development Council, Region VI (Western Visayas). Advisory support was provided by a Consultative Committee consisting of the chainnan of the Regional Development Council, Region VI, Governor Conrado J. Norada; the iv Street Foods Mayor of Iloilo City, Hon. Luis C. Herrera; the Regional Executive Director of the National Economic and Development Authority, Region VI, Attorney Alex G. Umadhay; the Manager of the Small Business Advisory Center, Region VI, JoseM. Divinagracia; and the Coordinator of the National Nutrition Council, Region VI, Attorney Rhodora J. Laurea. The Consultative Committee was assisted by a technical group composed of Dr. Venancio B. Ardales and Fely P. David from the Central Philippine University - Panay Island Consortium for Research and Development; Professor Candelaria S. Formacion of the University of the Philippines in the Visayas; and Estela F. Paredes of the National and Economic Development Authority. The members of the technical group also served as consultants on the project. Our actual research staff consisted of Lina E. Doregnil, Florenda D. Foja, and Leah N. Ledesma, who were involved in various phases of the research. The bacteriological examinations were conducted under the direction of Dr. Alicia Tayag-Saldana of the Regional Health Laboratory. The maps in this report were prepared by Arnold E. Foster, and the cover design was the work of Benjie F.E. Estuche. Mei-Jean and I wish to extend our sincere gratitude to all of the people mentioned above. This project could not have been accomplished without their help. A special debt of gratitude is owed to Attorney Alex G. Umadhay, who provided a great deal of assistance on various aspects of the project. Our fmal a<;knowledgement is the assistance provided by Street Food sellers who took the time and had the patience to answer oui' questions. Various names have been changed in this report to protect their anonymity. Hopefully, the recommendations being put forward will be to their benefit. GERALD A. BARTH Iloilo City, Philippines pecember, 1983 EXECUTIVE SUMMARY The preparation and sale of prepared, ready-to-eat food represents a significant portion of informal sector enterprises in many countries. These enterprises were the focus of this study, which was conducted in Iloilo City, Philippines. Results from the study revealed that these firms provided relatively good income opportunities for their owners, offered employment to a significant portion of the urban labor force, especially women, absorbed an important amount of agricultural produce, and frequently furnished low-cost, nutritious food to a variety of consumers. Even though food expenditures in the Philippines represent a tremendous percentage of the household budget, especially among lower-income groups, nutrient intake appears to be below recommended levels. With the movement of people to non-agricultural employment with the place of work removed from the place of residence, and with the rapid expansion of female labor force participation in the past decade, the·increased demand for food prepared outside of the consumer's household has provided additional opportunities for enterprises involved in this activity. The ability to provide meals and snacks at affordable prices, partially due to low capital expenditures, and to sell at locations which are convenient for customers, has allowed small-scale prepared food enterprises to supply food to numerous customers, many of whom have very limited purchasing power. Results from a h~usehold survey conducted in Iloilo City revealed that 30 percent of household food expenditures were devoted to prepared food purchased outside of the household. Approximately two-thirds of these expenditures were made at street food establishments, which also sold to people living outside the city who were in the city for various reasons. The generally low levels of income found in Iloilo City prevented many people from making prepared food purchases at more expensive formal sector enterprises, and even relatively higher income people preferred to make numerous purchases at informal sector enterprises. vi Street Foods The fmdings of relatively high earnings for street food vendors in Iloilo City, compared to the general level of income, has allowed many of these food sellers to escape from some aspects of absolute poverty. However, many businesses were susceptible to failure due to disruptions caused by illness and family problems. This was often connected with a lack of access to operating capital or the high cost of credit. Problems with government regulations were also faced by store owners who could not purchase the land on which they were squatting, market vendors who were unable to have their stalls registered in their own names, and sellers operating without permanent structures who could not obtain licenses to ply their trade. Rather than placing barriers in the way of these hard working people, planners should initiate a dialogue with them in order to develop creative approaches adapted to local conditions. An initial step is to develop regulations which encourage the long term operation of these businesses that appear to fulfIll the demand of Doilo City consumers. Once the legitimacy of these firms is established, operators need more access to sources of operating capital in order to maintain control of their business operations. This could be accomplished through the existing banking system. However, sanitary improvements in the preparation and handling of food are needed to prevent consumers from receiving contaminated food. This must be done without causing increases in cost. Street food sellers may also offer an important entry point for the introduction of more nutritious foods that could be locally grown at relatively low costs. These food vendors provide linkages to the agricultural producer and to food processors that could be utilized to increase the nutrient intake in Iloilo City. These linkages are extremely important in an agricultural country that has not been able to adequately feed its own people. CONTENTS Page ACKNOWLEDGEMENTS iii EXECUTNE SUMMARY v Chapter 1. INTRODUCTION. ............................. .. 1 Small Businesses and the Informal Sector 3 Food Marketing ..................................... .. 5 Food and Nutrition. .................................. .. 7 The Setting ........... '.' ........................... .. 9 Research Methods. ......•.............................. 12 Street Foods in Iloilo City .................... 17 Chapter 2. STREET FOOD ESTABLISHMENTS 20 Personal Features of Respondents 20 Women's Role in Business Operations 23 Type and Scale of Enterprises .............................. 24 Sources of Food and Linkages to Suppliers '" 29 Relations with Customers 32 Summary and Assessment ~ 34 Chapter 3. ECONOMIC CHARACTERISTICS OF ENTERPRISES 37 Sources ofCredit 40 Pricing and Sales ............................. .' ......... 42 Upward Mobility 47 Discussion and Policy Implications ........................... 53 Chapter 4. DEMAND FOR STREET FOODS 67 Household Features ; 67 Household Food Expenditures 69 Customer Profile 73 Customer Purchases 75 Purchasing and Consumption Patterns 78 viii Stree t Foods Chapter 5. STREET FOODS AND HEALTH 80 Food Preparation and Handling 80 Laboratory Analysis ofSelected Foods 83 Nutritional Significance ofStreet Foods .' 85 Policies Toward Sanitary and Nutritional Improvements 91 Chapter 6. CONCLUSIONS AND RECOMMENDATIONS 95

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