SPEECH OF DTI SECRETARY RAMON M. LOPEZ
AT THE 5TH MSME DEVELOPMENT COUNCIL CONFERENCE
AT STA. CRUZ, LAGUNA

ACKNOWLEDGEMENTS

Salamat sa emcee natin na si Clark. Napakaganda po ng journey niya. Mula po sa mentee o sumasama sa mga seminar natin, siya po ay naging isang mentor na. Palakpakan po natin si Clark. Umiikot po ‘yan sa buong Pilipinas, kasama ang DTI team.

Papasalamatan ko rin po ang representative ni Gov. Hernandez, si Atty. Dulce, at pakibati na rin po kay Gov. Ramil Hernandez. Ang aming pong taos-pusong pasasalamat sa lahat. Ang lahat po ng ito ay hindi magkakatotoo, kundi sa suporta ni Gov. Hernandez at ang team nina Atty. Dulce. Palakpakan po natin sila. Thank you for the venue for this conference at iba pa pong mga logistics requirements. Marami pong Salamat sa inyong suporta.

Atin pong mga, hindi ko alam kung sasabihin kong mentor or tormentor, pinangungunahan po ni Dean Pax Lapid at mag-asawa po na taos puso ring nagbibigay ng kanilang time, talent, at treasure. Sina Jorge and Jenny Wieneke of Tokyo Tempura. Sila po ang nag-umpisa rin ng Potato Corner, kasama po sa grupo na ‘yun.

Ang Entrep Champ, Paolo Tibig. Na-reinvent at na-innovate niya ang logistics sa Pilipinas, so you will learn at lot from our mentors that will teach you about innovation and teach you about being smarter entrepreneurs. And I will explain later.

Hindi rin po matutuloy ang programa na ito kung wala ang ating mga masisipag, passionate, at talagang mga innovative—dahil nag-iimbento pa sila ng iba pang programa—ang DTI team. Lalo na sa Region na ito na pinangungunahan ni Dir. Malou Toledo. RD napansin ko, matangkad po kayo kanina. Mas matangkad sa akin.

S’yempre ang ARD, Assistant Regional Director Marissa Argente. Kasama po syempre nila ang ating mga provincial director. Pinangungunahan po ni si PD Susan, PD Mercy, PD Juliet, PD Jong, and representing PD Noli, si Division Chief Cortez. Ang Director po ng Bureau of Small and Medium Enterprise Development, Director Jerry Clavesillas. Isa rin pong masipag na director na umiikot nationwide.

PCCI Chairs of Calabarzon, pinangungunahan po ni, matagal ko na pong kilala ito, si PCCI Regional Governor John Barredo. Siya po ay masipag na ka-partner ng DTI. Ang mga government officials na kasama natin dito. Government agencies, DOLE, DOST. DOST is also important pagdating sa mga innovation.

Tsaka ang ating mga youth representatives. Pwede po bang tumayo ang ating mga micro SMEs, ang mga kabataan na may negosyo o gustong mag-negosyo? Dahil sa inyo po talaga itong conference na ito. Palakpakan po natin sila. Kaya po tayo nandito ay para sa inyo at para maikalat niyo rin ang mga programa at learnings. Ang mga matutunan niyo ay sana ma-share niyo rin with your fellow entrepreneurs. I only wish all the best and maximize the program and try to learn a lot.

TRABAHO NEGOSYO KONSYUMER

TRABAHO

Ang layon ng Department of Trade and Industry and Industry ay nahahati sa tatlong bahagi: ang Trabaho, Negosyo, at Konsyumer.

‘Yung Trabaho, isa po ‘yan sa pinagkakaabalahan namin na paghahanap at naghihikayat ng investments that will create jobs. Manufacturing activities as well as service-oriented activities. Service can be tourism, can be IT-BPM, call centers, business processing na labor intensive. Those are all part of our programs to attract investments and build industries.

Ang isa pang layon ng DTI ang makagawa ng malalakas na industriya. SME, lalo na doon sa manufacturing, are all part of these industry development. Don’t think of yourselves only as micro SMEs, you are part of industry development.

And ang objective po naming, lalo na sa Region 4 na napakalakas ng manufacturing, maraming factories are built here—food, beverage, auto parts, auto assembly are all here in Region 4. What we would like to happen is when you think about your businesses, isipin natin na hindi lang manufacturing, meron din auto parts and services na pwede kayong maging part of the value chain ng mga industriyang ito para meron kayong sustained market. Isipin po natin na i-develop ‘yung business ideas at mga pang-negosyo.

Kunwari sa auto parts, isipin niyo kung hilig o expertise niyo bang gumawa ng auto parts na ‘yun. Kumuha kayo ng training, learn about that, so you can be part of the bigger industry. Because at the end of the day, we really want to create innovative and competitive industries.

I can dwell on that, pero hahaba po tayo. ‘Yun po ang isa. Industry development that can create jobs, sustain jobs.

NEGOSYO

‘Yung unemployment po natin, bumaba na. The best ever, 5.1 to 5.2 percent. Kaya para po sa hindi makahanap ng trabaho, ito po ‘yung ineendorse natin. Negosyo. Marami pang opportunity para maghanap-buhay at maging productive member of society, as we all want to be.

‘Yung pagnenegosyo ng micro SMEs is the second part, negosyo. Sa negosyo, the micro SMEs is definitely the way to go. Alam na natin ‘yung numero, 99.6 percent of all enterprises are micro SMEs, 0.4 lang ang large. Imagine, 0.4, wala pang 1 percent. The large companies account for 65 percent of value-added, income ng buong ekonomiya. Imagine, 0.4 pero 65 percent. So what’s wrong there?

By the way, dumami na ang SMEs natin. Dati ang count, 900 thousand. Ngayon, the registered companies now, mostly micro SMEs pa rin, they are 1.5 million. Either dumami ang nag-register na bagong negosyo, o dumami ang nag-register na dating hindi registered.

Totoo rin po na marami nag-uumpisa na hindi registered, and we encourage that. That is part of the entrepreneurship journey. Mag-uumpisa, hindi muna ‘yan registered. Pabenta-benta. But we all know that somewhere down the road, parang kanta, magre-register din ‘yan. Kasi hahanapan na siya ng resibo o documents to file a loan.

Dumami na ang numero, ang problema, they only account for around 35-38 percent of gross income earned. ‘Yan po ‘yung pinagsama-samang income ng mga MSMEs versus the large. Ibig sabihin nun, ang mga negosyo natin ay hindi value-adding. Hindi masyadong mataas ang value. Meron tayong pinroduce, ang kita natin ito lang. Ang value-adding, it’s synonymous to your profit.

What if you’re able to pass on a higher value, kasi maganda ang quality, maganda ang packaging. Imagine-in niyo, mataas ang mape-presyo niyo kumpara sa iba. And it all adds up to the gross value added.

Ang goal po ng DTI at ating mga mentors is how to create smarter entrepreneurs para mapataas ang kita nila. ‘Yan po ang pinaka-foundation ng mga programa ng DTI. That is the reason why wala po kaming tigil na umiikot sa buong Pilipinas para magturo. Entrepreneurship education is the key.

Dati naalala ko, mga 10-14 years ago, nagsu-survey po kami. Bago pumasok sa seminar, anong malaking problema niyo? Naku lahat ‘yan, capital. Pagkatapos ng seminar, noong natuto na sila, hindi lang pala dapat capital. Ang produkto ko dapat kakaiba, differentiated, mas maganda, mas magaling. Business idea na ang naging problema nila. Nag-survey ulit palabas, ang problema na nila ngayon ay business model.

And the especially the young entrepreneurs, kapag nag-uumpisa pa lang, it gives us the motivation to determine, what’s the best business for me? Na ako ang mage-excel, an magiging number one, to be best in the business.

So nag-iba na po ang challenge nila. It’s no longer capital. Kapag maganda ang business model, ang capital tuluy-tuloy na. Maraming gustong magpahiram. Hindi problema ang capital when you have a good business model. That is one example of how we are really banking on changing mindset, changing know-how, trying to teach entrepreneurs that basics of entrepreneurship.

7Ms

That would lead me to our 7Ms. That’s why meron kaming 7Ms. Hindi kasama ang Malou doon, ang Mon. Unang una po yung pagpapalit ng mindset. How can I be a continuously innovative entrepreneur? Ngayon, yung mastery, the second M will teach you, tinuturo yung basics of entrepreneurship. Doon natututo ng branding, product development. The 4Ps of marketing, financial literacy, there are so many things. Business plan, so many things there. It’s really important because it’s the way to create smarter entrepreneurs.

Then there has to be continuing mentoring, that’s why we have training. In our DTI Negosyo Centers, naglagay tayo ng mga coaches, negosyo coaches. Iba-ibang subjects in business. Kung tayo ay magbabayad ng ganitong seminars, eh mahina ang PHP15,000 a day para maka-attend ng seminars nila. Pero kapag nasa DTI ang nag-organize, libre po sila. Palakpakan po natin. Abono pa sila kasi ang gas nila, hindi naman bayad.

Kapag may business idea ka na, you can go to the other Ms. Kung wala pa, may isa pang M. Models of Negosyo. We can suggest to you negosyo models. Ay sandali na-excite ako, I’ll backtrack a bit. Aside from coaching tables, we have now the online mentoring.

I-advertise ko lang, ang Ask Dr. Negosyo ay isang Viber community na ituturo mamaya ni Dean Pax kung paano mag-enroll doon. But it’s a Viber community for mentoring. At kami-kami rin po ang mga sumasagot doon. Para ang mentoring does not have to be a physical presence.
And then moving into models of negosyo, doon sa walang business idea, we can present to you models and aside from the usual. Ayaw natin masyado ‘yung, kapag may gustong mag-negosyo, sari-sari store. Mag-isip tayo ng mas maganda. ‘Yung negosyo na kakaiba. Recently, we tied up with AFFI, na nadadagdagan ang ating mga negosyo models. ‘Yung mga famous franchise concepts na nakikita natin. Aside from Tokyo Tempura, may isa na siyang version, Hipon Hapon. Si Alteration may murang version din, Pa-Rush. Kasi ang apelyido ng owner ay Paras. So iru-rush ‘yung pagtahi.

We are creating other models na mas mura para lang mabigyan ng livelihood ideas ang mga kababyan natin. And that’s amazing. We have over 15 concepts. May lugaw, si Goto King may Wow Lugaw. Things like those are models. Wala nang dahilan ang ating mga kababayan. Kung walang trabaho, may negosyo, at may negosyo alternatives.

There’s microfinancing or money. Ayan, bibigyan ng capital o uutang, may panlaban na tayo sa 5-6. ‘Yan po ang mandato na ibinigay sa atin ni Tatay Digong. Ang ating Pangulong Duterte sabi niya, tulungan natin ang mga micro, small and medium. So we have the full support of the President.

So, we launched the P3 Program o Pondo sa Pagbabago at Pag-asenso. This is our way to replace or kill 5-6. Patayin na ang 5-6, ito na ang i-offer natin. Hindi rin pwede kasing just kill it na walang kapalit. ‘Yung mga may negosyo na, no capital, same day or the following day you’ll have the loan. From PHP5,000 to 200,000. And 2.5% per month interest instead of 20% per day. Napakaliit po at marami na kaming napautang, 95,000 na. Our fund is now PHP3.5 billion. Pero noong PHP2 billion pa lang po ‘yan, nationwide na pong napapahiram ‘yan. Napaikot na namin ‘yan. Ganoon kalaki. Nababayaran at napapaikot naman. Ngayon, may PHP1.5 billion na naman kami ngayong 2019.

We will give you access to money. Another M is machine. If you are a group of entrepreneurs, pwede ang Shared Service Facility. Pwede hong i-project ng DTI para sa inyo. Marami na ho tayong natulungan, mga cooperatives na nabigyan ng machines. And of course, our partner, DOST [Department of Science and Technology], individual entrepreneurs, pwede silang magbigay ng isa-isang machines. Whole-of-government approach, we have these machines that can help you. May machines na high-tech. We have the Fab Labs or fabrications laboratories where you can produce prototypes of your products.

And another M, lastly, is the market. May produkto ka na, where do you now sell your products? That’s the reason why DTI has these regional and national trade fairs. Nangyayari po ‘yan regularly. I think, mga once a month, we always have trade fairs. But these trade fairs are 3-day or 4-day events. Thursday to Sunday nasa mall, nasa 5th floor, na sa taas pa.

So we came up with a program, Go Lokal! Partner natin ang mga malls, bibigyan tayo ng space sa ground floor, high foot traffic. At yung MSME product na papasa, cinu-curate po natin ‘yun. Sila ay nabibigyan po ng space doon for free. Hindi ka na magre-rent sa mall. Rent ka sa mall, PHP25,000 to PHP30,000 a month, times 12, may advance kasi ‘yun. If you want to sell sa groceries, you pay PHP 2 million to 3 million per product. Para lang ma-dipslay ka sa shelf. In the Go Lokal!, you can be displayed for free. But you will have to improve your products. That’s why DTI and the Design Center of the Philippines to help in improving your product.

Kung hindi pa pwede merong OTOP Philippine Hubs that can feature your products. ‘Yan po ‘yung pag-revive naming sa mga Pasalubong Centers. So many things happening. New innovations. The government also innovates, all these programs are new.

KAPETIRYA

Isa pang innovation ang Kapetirya, we now are selling coffee. DTI is giving it to private sector operators. So that it becomes sustainable. Kapetirya, ni-launch po namin nina Dean Pax, Jorge, and Jenny, to help the coffee farmers to have an outlet to sell their products. These would sell Philippine coffee. Nag-uumpisa pa lang po, soft-launch sa Greenhills. First month operation, ang taas na agad ng benta—over PHP5,000 a day. At lahat ng produkto ng Region 4 nandoon, kasama ng kape.

We have one store in Baguio, ngayon it’s a restaurant, ibang concept ‘yun, inline. And another concept that will really propagate is the kiosk cart concept. And we want it nationwide. At ang franchise, murang mura lang. This would be a less than PHP1,000 concept na kahit sino pwede mag-open, basta matapos lang ‘yung manual. OTOP products ang pambara. Coffee ang panulak. We’ll put them in all buildings, condominiums. Kung gusto niyo ng kape, doon na lang bibili. And the coffee will be cheaper than Starbucks. And the concept is different

We always look at how we can improve and value-add. Ngayon, partner na natin ang coffee farmers, they will process the coffee. We always level up. Marami pa pong concept, pero ‘yun na muna. To sell and popularize Philippine coffee. We assure the coffee farmers that we will buy their products, then they will plant more. If there’s a market, there’s an incentive to buy.

MACROECONOMICS

So those are the 7Ms and I’ll just wrap it up by saying that it’s a good time to invest in the Philippines. Whenever we go out for investment roadshows everywhere. Recently sa China, Japan, Turkey, sa Europe, New York etc. We’re one of the fastest growing economies in the Asia. We’re number two in ASEAN. Palakpakan natin ang Pilipinas. 5.5% in the last growth but we’re still in the 6% on the average.

The past 15 or 16 quarters, we had over 6% growth. And it’s backed up by manufacturing. SMEs are manufacturing also. They create jobs. Kasama kayo doon. SMEs account for 65 – 70 percent of job creation, kaya malaki ang contribution doon.

Industry, manufacturing, and also construction has been growing double digit. Manufacturing has been growing by 5-6 percent. But in CALABARZON, manufacturing is growing 7-9 percent. Malakas ang manufacturing sa CALABARZON.

Investments is also pushing it up and also consumption spending. Tayo ang isa sa mga pinakabatang bansa. Ang maganda dito, low unemployment rate, at bata ang population, ang consumer base natin, matagal pang lalaki ‘yan. Ang Pilipinas, napakasipag mag-anak, 1.7 percent.

We have the bigger consumer market for many more years. Such that 2 years from now, the Philippines will be the 40th largest economy in the world.

Kahit anong umpisahan niyong negosyo, maraming bibili. Pero hindi katulad ng dati, ngayon ang tao, marami nang pambili. Mas marami nang employed. Maraming may income. Pansinin niyo, ang daming malakas na negosyo.

Ang China, noong malakas ang growth ng China, any business lumalaki. You have to invest and ride on the growth. Kaya kayong mga kabataan ang laki ng potential niyo. Basta makita niyo ‘yung tamang business model niyo. Hanapin niyo ‘yun, ‘yung passion niyo, wala sa market. Kapag Nakita niyo ‘yan, maraming bibili ng produkto niyo and you’ll be the next millionaire. Meron kaming pinag-uusapan, si Maxi Mango, started last September and ngayon 60+ na ang branches. Very encouraging, young couple.

Ang maganda ho, marami na kayong mentors ngayon. Kami ho noon, walang mentors noon. Ngayon, ang daming mga organization and programs for mico SMEs.

It’s a good time to invest. Inflation is now down to 1.7 percent. Below our 2-4 percent range. And even with the things na nangyayari ngayon, it still stayed below 2 percent. Again ang ganda ng ekonomiya natin.

INTELLECTUAL PROPERTY

The last point I’d like to raise is how to become smarter and more innovative entrepreneurs. Make sure that you are aware of the importance of having a brand. I’m addressing the young and aspiring entrepreneurs here. You have to register and own the trademark.

Marami ho kaming programa sa DTI dahil ang IPO Philippines, nandiyan po ‘yung mga inventions, patents, trademarks. You have to own it and register it para walang pwedeng gumaya. Dahil kapag lumaki na ang negosyo niyo, the value of your business will be your trademark.

Imagine a company that will sell its business 20 years or 10 years from now. Kapag binenta niya ‘yun ng walang brand, pe-presyuhan lang ‘yung kanyang assets and equipment nag-depreciate pa. Baka wala nang value. Ang cost noon, for example, PHP 1 million. But with a brand that is selling so much, va-value-han ang sales na ‘yun. Usually, it comes to 2 times sales. Ang dating PHP 1 million baka PHP 200 million ‘yun sa ganda ng benta.

That’s why you have to own the brand. Kapag ibebenta mo na ‘yung brand mo, the value can be so many times more. So importante po, I just have to remind you, IPR and continuous innovation.

Intellectual Property para madali rin nating ma-appreciate, ito ‘yung mga gumagaya. Kaya dapat niyo talagang i-register ‘yung brand and patents. Pwede niyong habulin ‘yung gumaya. O kaya ay kunin ‘yung brand niyo. Kunwari si McDonald’s, ginaya ni Mang Donald. Para lang kumita si Mang Donald, yung logo ginaya. Eh di hinabla siya ni McDonald’s. Kung wala ‘yung mga property ownership na ‘yun, eh lalaki na si Mang Donald na mas malaki pa sa McDonald’s. And that really allows to innovate and level-up our business.

EASE OF DOING BUSINESS

Last points. Ease of Doing Business, we’re trying to also simplify the process. I know you’re experiencing difficulties in registering your businesses. In SEC, getting FDAs, etc. Ngayon po, we’re really streamlining all these processes. And we hope to put everything online. For example, going to SEC, going to Mayor’s permit, to BIR.

Ang sinasabi ko, in one portal, you can fill out everything online. Then approved kaagad dapat ‘yan. And then in less than one hour, you upload all the documents. At the end of that filling out, you are ready to pay, e-payment. Hopefully at the end of that you are registered. Tandaan po ninyo, iyan ang pino-project natin ngayon.

I was talking to the President kahapon, sabi ko, baka kailangan na nating mag-announce ng direction na talaga lahat ng prosesong ito na automatic approval apat like in other countries.

For example, other requirements like Fire Safety Permit can be part of that or it could be a post-registration inspection. So you can be registered in one hour. Give us one year. Or less than a year and hopefully that can be up and running. We have a prototype already, we are working with the DICT. We’re trying to put it online.

And you know the Barangay Micro Business Law, income tax holiday for two year and no minimum wage for workers. The new law that we’re supposed to pass, CITIRA. It’s good for SMEs. It will bring down the income tax rate from 30 percent to 20 percent. Pero ang ibang incentives na forever, icu-cut na. May incentives pa rin, in fact nadagdagan na ‘yung incetives. In fact may additional deductions on R&D, training. That’s 200 percent on local employment. For local content, kapag bumili kayo ng local materials, 50 percent deductions. So many deductions, para ang tax dues mas maliit. ‘Yun ang kapalit kaya binababa natin ‘yung tax rates at deduction. Pero ‘yung mga forever na incentives na ine-enjoy ng mga malalaking kumpanya, icu-cut natin.

Let me end with harping on the importance of being innovative. We have the Startup Act that will give grants and all that. Ideas and business models will be encouraged. And in having smarter entrepreneurs, mawawakasan na ang kahirapan. Wala nang dahilan para maging mahirap, kailangan lang masipag. Kung walang trabaho, pwedeng mag-negosyo. Nandiyan ang buong gobyerno pati private sector partners para maging prosperous at mawala na ang kahirapan, katulad ng vision po ni Pangulong Rodrigo Roa Duterte.

Maraming Salamat po.