The Philippines: Closing the credit gap for women entrepreneurs

5 min read

Although challenges remain, women entrepreneurs are succeeding, aided by a generally supportive legal framework

The Philippines has the highest percentage of firms with female participation in ownership at 69 percent.

The Philippines is the second-best country worldwide on the "ability of women to rise to positions of enterprise leadership," and it is the country with the highest percentage of firms with female participation in ownership at 69 percent. In its Global Gender Gap Report 2014, the World Economic Forum quantifies the gap between women and men across four key areas: health; education; economy; and politics. The Philippines ranked ninth out of 142 countries, and it is the only country from the region that is in the top ten best performing countries on the overall index.39

The Philippines has enacted a number of laws that support women's economic agency. These include portions of the Civil Code and the Labor Code, as well as the Women in Development and Nation Building Act. Equal rights are established by the Magna Carta of Women.

The Labor Code of the Philippines, Article 3, states: "The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

However, our research found that women entrepreneurs face constraints that men do not, including limited access to capital and credit, due to lack of collateral, lack of information and time constraints imposed by domestic obligations. They also face discrimination in the workplace.40

The Women in Development and Nation Building Act is aimed at promoting women as equal to men, and expressly confirms that women have the same capacity to enter into contracts as men. Yet many banks prefer the signature or consent of the husband in financial transactions, and some still demand that the male partner co-sign any financial contracts.

The Comprehensive Agrarian Reform Law provides that all qualified women members of the agricultural labor force must be guaranteed and assured equal rights to land ownership. Yet, men are perceived as the primary landowners despite several initiatives to institute land reforms. In addition, within the Muslim community, family relations are governed by the Code of Muslim Personal Laws (rather than the Civil Code of the Philippines). Article 36 of the Code requires wives to obtain their husband's consent to acquire property and use land during the course of their marriage.

Though there is no legal obstacle, for many women, getting a loan can also prove challenging. This is particularly true where banks require borrowers to pledge their home or land as collateral. Women, who tend to lack such assets, are placed at a disadvantage. Legal restrictions on women's property rights can exacerbate the problem. For example, by law, a husband's decision prevails in the case of a disagreement between the spouses over the use of marital property.

There is at least one instance of the prevailing marital arrangement limiting women's rights. There are generally no restrictions on who can be a guarantor, save in the case of a married woman. Pursuant to the Civil Code of the Philippines, a married woman may be a guarantor of her own property but is required to seek her husband's consent if such guarantee binds the conjugal partnership (Art. 2049).

Despite the Anti-Sexual Harassment Law, sexual harassment is rampant. A 2016 study done in Quezon City, Metro Manila's biggest city with a population of more than three million, reported that three in five women were sexually harassed at least once in their lifetime.

The Philippines is the only country in the world other than Vatican City where divorce is not legal. Civil annulment is a long process, where each party must show psychological incapacity to perform the obligations of marriage and, if granted, renders the marriage void from the start even if children were born from the union. Any major purchase made would be considered conjugal property. In reference to ownership of real or moveable property, Article 96 of the Family Code states that "in case of disagreement, the husband's decision shall prevail."

Although the Philippines performs well on most high-level indicators of gender equality, deeper investigation reveals that many women are succeeding in the face of significant constraints imposed by the prevailing social norms.



39—World Economic Forum, The Global Gender Gap Report, 2014.
40—White & Case and Goldman Sachs. "Legislation, Regulation and Practices Impacting Women's Access to Financial Inclusion." 2016.


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