You are Beatriz Villaflor, Chief Strategy Officer of Liwanag Consumer Group in Cebu City. A competitor is signing up your coffee farmers, your biggest customer wants audited proof of inclusive sourcing within twelve months, and the board wants a plan for ₱1.2 billion in ninety days. Before you spend a peso, you have to explain why three decades of a corporate foundation left the company this exposed.
The situation
Liwanag, founded in Cebu in 1981, makes packaged foods, coffee and home-care products. In 2025 it turned over ₱52 billion at an 11% EBIT margin, employs 6,500 people and reaches consumers through 140,000 neighbourhood sari-sari stores as well as modern trade. Its coffee, coconut and corn come from some 28,000 smallholders across the Visayas and northern Mindanao.
For thirty years the company has dealt with those farmers from two offices: a procurement desk that negotiates a price each season, and a foundation, funded from profit, that awards scholarships and moves relief goods after typhoons. They have never shared a plan, a budget or a target. This quarter, a poor harvest and a competitor's exclusive-contract drive have left only 78% of the coffee needed under contract; the other 22% will have to be bought at spot, at whatever the market asks.
The average farmer earns about ₱78,000 a year, close to 60% of a rural living income; the base loses 9% of its members a year and its average age is 58. The largest modern-trade customer, 15% of sales (₱7.8 billion), wants the evidence within twelve months or it will de-list the core lines. The board applies an 18% hurdle rate; on the current plan, finance projects 9%. Its chair has warned that if the plan reads as philanthropy with a strategy deck attached, it will be defunded and Liwanag will buy the missing coffee at spot.