Micro, small and medium enterprises may finally get the ettention they deserve.
President Rodrigo Duterte in the recent Asean meeting in Vientiane, Laos, stressed the role of women, the youth, e-commerce and MSMEs in shaping the economy and as a way out of poverty.
While there has been remarkable growth in the general condition of the industry, high poverty incidence remains in agricultural areas, which contribute 60 percent to the country’s total employment.
Trade Secretary Ramon Lopez said MSMEs under the proposed 2017 budget will get 60 percent of the proposed P4.6-billion budget of the Trade Department.
“The budget for MSMEs was dispersed in many functions within the department. We have it in industry promotion, locally-assisted prgrams, and with the MSME cluster, itself. Our budget is not much compared to other departments, but we will make it work. Some congressmen pity our budget. Unfortunately, that was what was in place even before we started office,” he said.
The Trade Department’s budget is almost neglible at 0.3 percent of the proposed total budget of P3.35 trillion for 2017, despite a 16-percent hike that came with the creation of fiscal space.
“We just have to work within the pie. If we will recalibrate (the budget), we will do it for 2018,” said Lopez.
The department will prioritize trade promotions in 2018, a mission that has not given full support during previous administrations.
Exporters will get the push they have been asking in the last several years, Lopez said.
The department, though, is yet to assess a proposal by the exporters group to allocate at least P1 billion for export promotions.
There are many programs supporting the development of MSME in the Philippines. Lopez who had once headed Go Negosyo, one of the more active programs of the government devoted to developing and assisting the MSME cause, still champions the advocacy.
In August, 2016, the Trade Department and Go Negosyo launched “Kapatid: Angat Lahat!”.
Kapatid is an initiative that encourages medium and large corporations, or the so-called “Big Brother,” to help micro and small enterprises, or the “Small Brother,” through the use of Inclusive Business models.
Kapatid Project will develop programs to partner MSEs with medium and large enterprises as part of their value chain.
Another enduring program is the SME Roving Academy, which is a continuous learning program for the development of MSMEs to become competitive in the domestic and international markets.
By October 2016, the department will be launching “The Best of OTOP” stores within the country’s top four malls—Robinsons Malls, SM Malls, Rustans Malls and Puregold Price Club.
“This new project concept will provide market access to MSMEs. We will let the malls run the show it but we will get a certain percentage from the proceeds that will go for a very good cause,” Lopez said.
Participating MSMEs will profit from the scheme but the malls will be retailing the products which will be showcased inside the main malls.
“It will not be difficult for the malls to sell OTOP products. In fact, based on recent reports consumer expenditure in the Philiplines grew by 7 percent in the first quarter (of 2016), about 69.81 percent of total expenditures of of the country,” Lopez noted.
Another MSME market model that caught the fancy of the President, he said, was a retail building in Indonesia, where locally-manufactured products are sold from all sort of accessories down to apparels and food at the 5-storey edifice in a marketplace they visited.
Lopez said the “tiangge-like” setting was more like how a fledgling business should operate—in an environment that is close to the masses.”
“We would like to replicate that model in the Philippines but for lack of immediate structure, we will again tap our local malls for assistance. They’re there already, it will be easier for us if we can maximize the malls’ potential for business. So, we’ll have The Best of OTOP for the more globally-ready MSMEs and then we’ll have GoLokal for the general public,” he said.