Most Filipino micro, small, and medium enterprises (MSMEs) are driven by a desire for financial independence, with 64 percent of business owners starting their ventures for this reason, according to the 2025 “Heart of Hustle” report.
The report, unveiled on Tuesday by the Boston Consulting Group (BCG) and the Department of Trade and Industry (DTI), highlights the deep aspirations of these businesses despite persistent challenges.
The “Heart of Hustle” report, further discussed on Wednesday at the opening of the two-day MSME Bayanihan Caravan 2025, revealed that small business owners maintain ambitious goals even when confronted with barriers like limited access to financing, rising operational costs, and market constraints.
The study, which surveyed 3,098 MSMEs nationwide, found that 60 percent aim to increase revenue this year, 53 percent seek to expand their customer base, and 48 percent intend to improve product quality.
Despite these aspirations, 55 percent of respondents have never applied for a business loan, primarily due to a fear of debt and the perception of high interest rates. Ironically, 59 percent of approved loans carried modest annual rates between 1 percent and 5 percent, indicating a disconnect between perception and reality. Many MSMEs still rely on personal savings (44 percent) or government programs (34 percent) to fund their operations.
The report also showed that while 73 percent of MSMEs expect better performance in 2025, only 14 percent operate nationwide, and an even smaller fraction export their products. Most businesses remain hyperlocal, with 43 percent serving only their barangay or city.
MSMEs reported a low adoption of digital tools despite a strong intent to use them. While 77 percent expressed a desire to utilize more digital solutions, only 16 percent currently use any form of business software.
To unlock growth, the report recommends a multifaceted approach across five key areas: financing, market access, tools and infrastructure, government support, and labor. Specific recommendations include micro-targeted financing schemes, simplified compliance procedures, export readiness programs, and improved access to training and recruitment tools.
Trade Secretary Ma. Cristina Roque said the findings underscore the need for more inclusive, flexible, and context-sensitive policies. “This report helps us see MSMEs not only as entrepreneurs but as individuals with goals and constraints. Supporting them isn’t just an economic priority, it’s a national imperative,” she said.
