Welcome Remarks of Secretary Ramon M. Lopez
US-ASEAN BUSINESS COUNCIL SME WORKSHOP
27 June 2018, Philippine Trade Training Center
“Empowering Philippine SMEs with Digital Tools and Mentorship Opportunities”
First to our Ambassador Sung Kim of the U.S. Government, our partner in SME development, PCCI President Alegria S. Limjoco, Senior Representative of the US-ABC, Elizabeth Magsaysay, Mr. Surendran Vangadasalma of Cisco, and our partners from the government, a gracious welcome to all of you.
Ladies and gentlemen, it’s my pleasure to be with you this morning. Today, we celebrate the International Day for Micro, Small, and Medium Enterprises (MSMEs). This is in support of the United Nations (UN) General Assembly resolution recognizing the crucial role that MSMEs play in achieving the 2030 Agenda for Sustainable Development.
Empowering PH MSMEs
Last year, the Philippines’ MSME Development Council also acknowledged the UN designating June 27 of each year as “Micro, Small and Medium Enterprises’ Day.” This resolution highlights the importance of MSMEs as the cornerstone of economic growth and development of the country.
Here in the Philippines, we pay special attention to MSMEs. This is a sector close to my heart and the heart of President Rodrigo Roa Duterte. He has given us the mandate to cater to the needs of the Micro SME sector. He has given us a lot of support in terms of budget, manpower, resources, etc.
Another achievement on SMEs: This year we have decided to convert the Philippine Trade Training Center, an attached agency of the Department of Trade and Industry, into an MSME Academy. The PTTC was originally created for Philippine exporters—for them to level up. By transforming this into an SME Academy, we are preparing MSMEs to become part of, first the local value chain, and eventually the global value chain.
MSMEs account for 99.6 percent of the total number of businesses in the country, while also employing 62.8 percent of the total workforce. The challenge has always been, the value adding part—they account for only about 36.5% of GDP. The answer, of course, is in the capacity of the MSMEs. The drive for us is to help them become smarter entrepreneurs who will contribute a higher value added to the economy. If we’re talking of inclusive growth, we have to empower the MSMEs or those at the bottom of the pyramid. We want the micro to become small, the small to become medium, and the medium to become large enterprises. In developed countries, the MSMEs account for 50 – 55% of the GDP. That is our target.
To this effect, we must continue to effectively empower these main drivers of national development by ensuring that in today’s changing landscape, no one will be left behind—especially under President Rodrigo Duterte’s administration.
It can be hard to keep up with the rapid developments in the 21st century, especially with the changes arising from the 4th Industrial Revolution. But with the Internet of Things, MSMEs have the potential to gain from the digital revolution with technology acting as enablers to help them hurdle market barriers towards growth and expansion. Technology is the great equalizer. We want MSMEs to have access to more information on market trends, designs of products, business models, etc.
Taking advantage of the ASEAN Economic Community, the Philippines must embrace the digital economy and the innovation processes. It’s also imperative for our MSMEs to connect to overseas market, compete worldwide, and be connected to regional and global value chains.
Fortunately, there is a multiplicity of digital platforms that can hasten enterprise owners to reach buyers of its goods and services online. Aside from this, we are also talking of online mentoring. We already have mentoring programs, we just need to take them online so they can train more MSMEs. We want to give them access to mentoring 24/7.
We have 883 Negosyo Centers nationwide. Anyone can go to these centers and ask the business counselor about our microfinancing solution, the Pondo sa Pagbabago at Pag-asenso or P3. This is our program to replace the 5-6 lenders.
Increasing MSME connectivity
Public-private initiatives have already begun to support MSMEs in this area. Early this year, the Department of Trade and Industry (DTI) partnered with Google Philippines and IPG Mediabrands Philippines, Inc. to increase MSMEs’ presence on digital platforms. This effort will make them more dynamic and competitive: for example, Google My Business can enhance the online visibility and accessibility of MSMEs to potential customers.
We also teamed up with PLDT Enterprise for an event teaching entrepreneurs about digital tools like PLDT’s PayMaya, a prepaid online payment application that permits customers to pay online without a credit card.
Across the Asia-Pacific region, the Philippines is likewise one of the proponents of the B2B online platform, the APEC MSME Marketplace. It is a great trade opportunity in the trend of the digital economy that addresses issues of doing business beyond our borders using the internet.
However, the increase of connectivity through digitalization compels businesses to build capacity and engender innovation. This is important to consider as they begin catering to buyers with higher requirements, and markets with higher product standards.
To facilitate MSMEs capturing this digital opportunity, we need to make smarter entrepreneurs. The programs that we outlined for MSMEs cover the 7Ms of entrepreneurship: Mindset, Mastery, Mentoring, Money, Machines, Market Access, and Models of Negosyo.
We provide market access not only for three-day trade fairs. We set up Go Lokal! stores for MSMEs to have free access to mainstream markets—these are the malls. We only accept MSMEs with beautiful products, so this becomes a challenge for them to deserve to be displayed and be discovered in the Go Lokal! stores. Otherwise, an MSME in this country would have to pay around PHP 2 million just to be displayed in the groceries.
This 7Ms approach is our 360-degree intervention for MSME development.
The ASEAN SME Academy
The ASEAN SME Academy, which is also highlighted today, is an online platform that provides business information and training resources to Southeast Asian MSMEs and utilizes Mastery and Mentoring strategies.
The Academy’s ceremonial handover occurred last year in Luang Prabang, Lao PDR, between the US-ASEAN Connectivity through Trade and Investment (or US-ACTI), and the ASEAN Coordinating Committee on MSME through the Philippines.
The Academy plays an important role in the realization of the Plan’s strategic goal on enhanced management and labor capacities. As of May 2018, it was recorded that 31% (or 1,058) of the total number of active users (3,340) of the Academy are Philippine enterprises. Two of the five most popular courses are on online tools such as “Boost Your Business with Facebook” and “Social Media Marketing.”
Conclusion
It’s not surprising that the entrepreneurship ecosystem calls for new business models. Reinforced by the 4thIndustrial Revolution, MSMEs cannot strive for more of the same. That’s why this year’s National MSME Summit with the theme “Accelerating 7Ms for Developing MSMEs 4.0” will emphasize these issues. This will ensure that MSMEs will be connected and not mere observers during this transition.
Let me take this opportunity to invite all of you to on July 10 at Clark for the National MSME Summit. Director Jerry Clavesillas will make a detailed announcement regarding this. So far, we have President Duterte attending the afternoon session.
Today, I call on the audience to prepare to be challenged, inspired, and empowered. MSMEs should also be mindful that there are corresponding responsibilities in using digital tools, as well as going digital.
Lastly, I wish you a most fruitful day as we exchange knowledge on fostering MSME competitiveness through mentorship and equipping you with appropriate digital tools. Let us remember that our efforts are aimed for the greater good of creating inclusive growth and shared prosperity for all our countrymen.
Thank you and mabuhay kayong lahat!
END