Ladies and gentlemen, magandang umaga po sa inyong lahat!

From the start of President Rodrigo Roa Duterte’s administration, we’ve accelerated the support for the growth and development of our micro, small, and medium enterprises (MSMEs) in making them into smarter entrepreneurs. This is not surprising. Even at the start of his term, President Duterte had always valued the efforts of our Filipino entrepreneurs. Our President has a big heart for the small entrepreneurs, especially the micro entrepreneurs. Even ‘yung mga nagtitinda po sa palengke, sa bangketa, lahat po ‘yan ay iniintindi niya at inaalala kung papaano pa matutulungan. He described them during his last week’s State of the Nation Address (SONA), as being vital to “economic activity, job creation, and poverty reduction.” Naaalala ko tuloy na ito ang kaniyang unang bilin sa akin nang magkausap kami noong sinabihan niya ako na maging DTI Secretary. It is the first on his list.

Ang bilis din ng panahon, at ngayon ay limang taon na ang nakalipas. Masasabi natin na marami nang nangyari, of course, nandiyan po ang mga major developments from the Marawi seige to now, the ongoing COVID-19 pandemic na tila hindi pa tumitigil, at nagkakaroon pa ng maraming variants. Ang giyera laban sa COVID ay nag papatuloy pa rin, at kasama nito and patuloy na mga pagsubok sa kalusugan at buhay. Kasama rin ang epekto sa ekonomiya, lalo na sa mga maliliit na negosyo o MSMEs at mga manggagawa nito.

Sa kabila ng mga pagsubok, pinagpapatuloy natin, na walang pagbagal ang mga serbisyo para sa mga MSMEs. This is what we call the government’s 360-degree support programs for MSMEs, ibig sabihin lahat po ng anggulo tinutulungan natin, following our 7Ms Framework—from Mindset to Mastery (of entrepreneurial concepts and principles), to Mentorship, Machines, Money, Models of Negosyo and Market or giving MSMEs the continuous access to market. Thus, we have witnessed how the MSMEs have continued to grow as a sector.

Tama po, marami ang tinamaan ng epekto ng mga lockdowns, from a high of 40% ang nagsara last August 2020 at ito ay nag-improve down to 4% na lamang last February 2021 noong nasa GCQ tayo, but this figure again rose to 16% when an ECQ was declared last March because of a surge. The number quickly improved to around 8-10% as of this July, at least before the impending ECQ in NCR and other provinces that are experiencing a surge. Subalit as we know, magkakaroon po ng ECQ next week dahil sa surge.

What we are seeing is that while there are businesses closing down, a lot of new businesses are being put up. We are seeing more entrepreneurial Filipinos, and these

are the types who are registering their businesses, those professionalizing their businesses. These are businesses which got affected or closed down and have since pivot their businesses to those who probably lost their jobs and decided to start anew with their own business. From around 900,000 business registration in 2015, the total number of businesses registered jumped to 1.7 million in 2020, a pandemic year last year, to even higher this year at 1.9 million.

Amidst adversities, we see the entrepreneurial spirit of the Filipinos. As they say—laban lang, kahit nahihirapan. Kailangan nang may hanapbuhay para may maipakain sa pamilya at para matustusan ang edukasyon ng mga bata.

To complement this fighting spirit of the Filipinos, DTI makes sure that it complements their passion and determination in taking a better control of their destiny. DTI has to give all the support it can give, todo-todo!

We’ve been promoting and widening the reach of our MSME development programs. Our Negosyo Centers—of which 965 out of a total of 1,212 were established since 2016 under the Duterte administration—have provided business assistance to 4.3 million clients, at 2.1 million po doon ay MSMEs na direct assistance.

We have accelerated the giving of livelihood assistance to the very small micro entrepreneurs—ito na po ‘yung mga nagtitinda sa mga palengke, sa karinderya, mga repair shops, at iba pa—the giving of P5,000-10,000 assistance in-kind to start their livelihood. At maganda po ang ating average, madalas po tayong tinatanong kung kumusta po ang ating pinagbibigyan ng livelihood kits. Base po sa ating mga monitoring ng mga regional at provincial directors, maganda po ang ating average. In other words, tinutuloy po ang mga negosyo na iyon ng mga nakakapagbigay sa kanila ng hanapbuhay. In other words po sa DTI, we teach them how to fish—we feed them a lifetime. This Negosyo Serbisyo sa Barangay and Livelihood Support Program (NSB-LSP), were given to over 57,000 beneficiaries nationwide, on top of the 50,011 livelihood kits we gave to the victims of the Marawi seige.

Likewise, our Shared Service Facilities (or SSFs, the shared equipment na pinagsasaluhan ng mga MSMEs)—of which 886 out of 2,894 were set up since 2016— have provided technology, tools, and knowledge to more than 200,000 MSMEs to become more competitive under a shared system. These, in turn, have helped to generate more than 190,000 jobs. Under our SSF program, we’ve also instituted 29 Fabrication Laboratories (or FabLabs). I must credit the former DTI Secretary Greg Domingo, who launched this program.

For access to market, we’ve established 137 Go Lokal! Stores—ito po ay nationwide—, which has assisted 788 MSMEs and generated sales amounting to P381M. We’ve also inaugurated 62 One Town, One Project (OTOP) Hubs nationwide, which have helped 50,323 OTOPreneurs and generated sales worth P5.5B. And in terms of financial support, the Pondo sa Pagbabago at Pag-Asenso (P3) Program, ito po yung ni-launch natin nila Presidente labas sa 5-6, has released P8.8B loans to more than 200,000 microenterprise borrowers. Bago pa ho the pandemic, before the SB Corp.’s CARES pa po ‘yan.

Our Kapatid Mentor ME (KMME), which we do with private sector partners like GoNegosyo, and a network of private business associations like the GoNegosyo, headed by Presidential Adviser Joey Concepcion, Association of the Filipino Franchisers Inc. (AFFI), Philippine Franchise Association (PFA), Philippine Chamber of Commerce and Industry (PCCI), Angelpreneurs group, headed by Dean Pax, has had more than 9,000 mentees graduating from the program. Meanwhile our Philippine Trade Training Center-Global MSME Academy (PTT-GMEA), headed by Executive Director Nelly Dillera, has trained 500,000 entrepreneurs. During the pandemic, we did a lot of digitalization of MSME that will onboard them in ecommerce platforms, and give exposure in a lot of DTI virtual trade fairs and expos.

What’s more, we’ve been implementing policies and reforms not only create a conducive business environment for our MSMEs, but also to make them more competitive and innovative. One is through the game-changing Corporate Recovery and Tax Incentives for Enterprises Act (or CREATE) Act, which lowered tax rates to benefit MSMEs frp, 30% to 20%. It can also offer incentives as long as their activities are in the Strategic Investment Priorities Plan (SIPP). There is also the Philippine Innovation Act, to harness innovation efforts to enable MSMEs to be part of the domestic and global value chain. Kasama rin po ang Innovative Startup Act, kasama po sa mga in-issue na mga batas ng ating Pangulo.

In managing the COVID, what we have also observed is that the economy is responding quickly to any reopening being done. It shows that the economy has good fundamentals and demographics that exhibit strong potential in growth, once given the opportunity to open up

When we were moving to GCQ in many areas, economic contraction was reduced to only -4.2% in first quarter 2021, from as high as -17% during the 2nd quarter of 2020, and a full year 2020 contraction of -9.5%.

The manufacturing sector also recovered to positive territory, experiencing a positive 0.5 growth in the first quarter of 2021.

We expect all these GDP figures to show positive growth for second quarter to the last quarter of 2021.

The Philippine manufacturing Purchasing Managers’ Index (PMI) has risen above the 50-mark at 50.8 this June as operating conditions improved with the gradual easing of quarantine. This was made possible as we allowed higher operating capacities in several sectors, even allowing the export and the IT-BPM sectors at 100% operating capacity during an ECQ.

Meanwhile, the volume of production index (VoPI) registered a 265% growth year-on-year (YoY) for May.

Trade and investments are also picking up. Exports in May were at 29.8% YoY growth rate, and the year-to-date (YTD) exports sits at 21.4%, again these are record growth rate. One can say this is not only because of a low base because of the start of the pandemic in 2020, some months are even higher than 2019 figures, suggesting a real solid growth. And Net Foreign Direct Investments (FDIs) posted strong growth in April amounting to USD679M, up by 114.4% from USD317M in the same month last year. Year-to-date, FDI net inflows grew 56.3% to USD3.1B from USD2B of last year.

Unemployment had gone down to around 7.7% this May 2021 from as high as 17.7% at the height of ECQ in April 2020. And through our National Employment Recovery Strategy (or NERS), that I co-chair with DOLE Secretary Bebot Bello and TESDA Secretary Sid Lapeña, we are working doubly hard to decrease the unemployment rate further and achieve pre-pandemic levels at an average range of 5.0-5.5%.

To help further reopen more sectors, we also started vaccinating our economic frontliners in the A4 category, in fact we have expanded the definition of A4 to include almost all workers. The number of fully-vaccinated are poised to outpace the number of those infected with COVID-19, given that we already have around 20.8 million vaccinated, that is 11.7 million first dose and 9.1 million fully vaccinated as of 1 August 2021. We are hitting over 515,000 jabs per day or 3.6 million in one week. The record highest was 659,000 jabs per day and this capacity continues to increase.

With the coming ECQ this 6 August 2021, we take the view that economy will be again be affected, which would delay the recovery of our nation. We know that the economy and MSMEs cannot bear another lockdown as this could raise closures again. We were against it. But the new set of data shown to us last Thursday were a concern.

By imposing this ECQ, we can remove the possibility of an uncontrollable surge like what happened in our neighboring countries that claimed thousands of lives. But even as we do so, we assure businesses that we will allow the dominant portion of the production sector—from agriculture to industry and services—to continue to operate so that we can save jobs and income. This is also needed to assure the continuous supply of basic goods and services for the people. Kaya po hindi dapat mag-panic buying, assured po tayo ng supply sa groceries. At puwede po tayong lumabas para bumili, kaya hindi po kailangan mag-panic buy.

More importantly, we need to return to full economic activity after this lockdown to provide more opportunity for our Filipinos to create value through entrepreneurship and gainful employment.

We are confident that we can achieve this. Prior to the pandemic, we had strong economic fundamentals. We were the third fastest growing economy in Asia with an average of growth of 6.6%, we were projected to become an upper middle-income economy, and we kept a stable 3% inflation rate.

Likewise, our economy’s resilience can be attributed to one of our key advantages—our people. We still can count on our 110M population that has an ideal demographic sweet spot and an average young age of 25 years old. And that means more productive years ahead of them, providing also a rich pool of 49M manpower resource needed for growth, as well as a continuously growing consumer base with increasing income and purchasing power.

With this in mind, we are celebrating this National MSME Week starting today in honor of our MSMEs for the integral role you play in helping to rebuild our nation and uplifting the lives of our people. DTI is proud to support you and we remain committed to helping you every step of the way in your entrepreneurial journey.

This plan was necessary to establish a conducive environment, as well as, ensure appropriate capacity and to open opportunities for our MSMEs. So, dito po sa MSME Plan, we really needed to improve and enhance the following: (1) the business climate; (2) access to finance; (3) management and labor capacities, (4) access to technology and innovation, para mag-improve ang ating innovation; and (5) access to markets.

But to accomplish all of these, DTI could not have done it alone—especially now! Fortunately, the Filipino “bayanihan spirit” has always been with an integral part of our people. Utilizing a whole-of-society approach in promoting MSME development, we found enablers heeding our call to support MSMEs—from different branches of government, to the private sector, the academe, and non-government organizations (NGOs). Each contributed to the best of their capacities. Maraming salamat po sa inyo.

In improving the business climate, many of our agencies instituted reforms and process improvements that signaled to our MSMEs that transactions with government will be speedy, transparent, and efficient.

That’s why we’d like to thank the following agencies that have stepped up to help our MSMEs: The Anti-Red Tape Authority (ARTA), the Department of Information and Communications Technology (DICT); and the many local government units (LGUs); the Securities and Exchange Commission (SEC); the Bureau of Internal Revenue (BIR); the Food and Drug Administration (FDA), at marami pa pong partner agencies.

Leveraging digital technologies, we have supercharged our thrust for promoting “ease of doing business”. Business registration is now a couple of clicks away with our Central Business Portal (CBP). Likewise, filing and payment of taxes does not require queuing in your local Revenue District Office (RDO) with BIR’s Electronic Filing and Payment System (eFPS). According to DOF, around 99% of income tax registration (ITR) filing were done online. On DTI’s part, we relaunched our Business Name Registration System Next Generation (BNRS Next Gen) that saw registration process done within 8 minutes.

In improving access to finance, we view this as more than just a “money” issue as it includes literacy and competency in managing finances. Support for our MSMEs came from government financial institutions like the Small Business Corporation (SBCorp), the Land Bank of the Philippines (LBP), and the Development Bank of the Philippines (DBP) and the Philippine Guarantee Corporation.

This also follows President Duterte’s directive to “make long lines a thing of the past.” And in this process in trying to shorten, streamline, and automate the processes, even our partner from SEC even committed, at na-improve na po nila, to shorten the process from 10 days to now three (3) to five (5) days and we’d even move towards one (1) day. ‘Yan po ang aming shared objective, lahat po ito ng agencies from DTI, SEC, PhilHealth, SSS, to LGUs, as well as BIR, lahat po matatapos ang business registration within one day. SEC committed to streamline their part by October this year.

Recently, financial support for businesses has been absolutely necessary because of the pandemic. Because of this, the government has rolled out a number of programs: the CARES lending program – 0% interest and no collateral, and this P5 billion fund lent out to over 32,000 borrowers is practically fully utilized by now; there will be replenishment to this fund so we just continue to process the loan applications. So, ‘wag po kayong mag- aalala. We thank DOT Secretary Berna Romulo-Puyat for allowing us to use the first the P1.5 billion-fund for tourism dahil mayroon pa po for the tourism sector and we will be returning this by early next year.

We also have the DOLE’S COVID-19 Adjustment Measures Program (CAMP), the Small Business Wage Subsidy (SBWS), which they are trying now to fund so it can be given during the time of ECQ.

In enhancing management and labor capacities, the private sector has offered their wealth of knowledge to share with our entrepreneurs. GoNegosyo, we thank PA Joey Concepcion, Executive Director Merly Cruz, at mga mentors, has been our long-time partner in the KMME program, which provides entrepreneurs the opportunity to improve their business models thanks to mentors that coach them on different aspects of business operations. Kasama narin po diyan ang mga Angelpreneurs na mga kuya at ate ng mga MSMEs.

Likewise, we rolled out digitalization programs like the CTRL BIZ: Reboot Now Project that would help MSMEs expand their business from offline to online, and onboarded them to virtual marketplaces.

And to enhance the skills of our people for the Fourth Industrial Revolution (4IR) and the Future Economy, we launched the Philippine Skills Framework (PSF) Initiative to develop sector-specific skills frameworks that would enhance the quality of our human capital and match them with the needs of the business sector.

Speaking of accessibility, LGUs—particularly the barangays—have been responsive with our Negosyo Serbisyo sa Barangay (NSB), which extends DTI’s capacity-building services to their level. Through this intervention, we hope to broaden our reach of capacitating our MSMEs while minimizing cost by leveraging the backing of each barangay. We’ve also launched the Negosyo Center Online Portal so that our MSMEs everywhere can access their services online. I must say dito po sa NSB, pagka-training at willing na po, bibigyan po sila ng livelihood kits na binanggit natin kanina.

In improving access to technology and innovation, we have partnered with private sector experts and platforms Like Google, Facebook, Shoppee, Lazada and Globe, among others, to help our MSMEs transition to digital in the wake of COVID-19. These digital service providers have made businesses more visible, operations more optimal, and transactions much easier.

Likewise, the academe has been at the forefront of innovation through the network of our FabLabs. These are housed in institutions such as the Bohol Island State University, Mindanao State University Iligan Institute of Technology (MSU-IIT), and the University of the Philippines (UP) Diliman and Cebu, among others. These FabLabs provide entrepreneurs the opportunity to prototype their products, and there is no better environment to breed innovation than centers of education.

Lastly, in improving business opportunities, we have supported our entrepreneurs by providing them retail spaces in prime areas that would have otherwise been difficult due to the minimum merchandise quantity or other prohibitive costs, like rental fees. Through our Go Lokal! Program, our MSMEs have gained access to stores that highlight Filipino creativity and competitiveness. While this program has shifted online because of the pandemic, we’ve also tried to maintain our promise of providing market space in high- foot traffic areas in commercial spaces. We also put transitioned many of our trade fairs to virtual even as we partnered with online shopping platforms and marketplaces.

And more than market visibility, we’ve advocated the “Buy Local, Go Lokal” campaign to intensify awareness and preference of the local market to purchase Filipino-made products. This campaign is part of our Revitalizing Businesses, Investments, Livelihoods, and Domestic Demand” (or REBUILD) PH strategy to help us build back better from the pandemic. Starting with our patronage of goods and services of local businesses, we can extend them a lifeline to earn money, keep a roof above their heads, and feed themselves and their families. This domestic preference would also restimulate domestic demand, and build capacities for domestic industries, leading to more jobs and attracting more investments. Ang importante po dito, without any budget, with just the Domestic Preference policy, we restimulate demand. Hindi po na kailangan magbigay ng ayuda, lalakas na ang preference sa kanilang mga produkto.

Lastly, we’ve taken great steps to provide our MSMEs product development opportunities through the OTOP Next Generation program. This initiative builds up their brand, improves their packaging, and enhances their overall value proposition. This, in turn, would improve the competitiveness of their products in both local and global markets.

Moving forward, our aim is to modernize and digitalize our entrepreneurs, as well as produce more innovative MSMEs that would increase their value-add contribution to our economy. We mentioned earlier that our goal really is to push for smarter entrepreneurs. That means having MSMEs that are continuously innovative and creative that would create higher-value products and services.

We also hope to level up our entrepreneurs and industries to be innovative and creative in utilizing Industry 4.0 technologies like artificial intelligence (AI). Nagkaroon po tayo ng AI National Roadmap para ma-maximize ang benefits para sa MSMEs. Ang AI po ay hindi lamang para sa malalaking kumpanya, para rin po ito sa mga MSMEs.

Under this Roadmap, we will establish a private sector-led National AI Research Center (or NCAIR) to develop research work that is AI-related needed for the operations of the business sector. Even as we make the country an “AI Center for Excellence” in the region, we aim to make this research center accessible to MSMEs, wherein they can also benefit from shared-research types of activity or ‘yung mga tinatawag na as off-the-shelf AI products, na available na. Makakatulong po ito sa inyong operations para malaman ang magagandang product needs, anong produkto sa bawat segments, saan maganda magtayo ng site at next branch, ito pong mga itong decision-making ay magkakaroon po kayo ng basehan na ginagawa ng ating mga AI data scientists.

And to sustain the development of MSMEs, there are a number of legislative measures that DTI is working on with our lawmakers in Congress. One is the Amendments to the magna carta on MSMEs, which would seek to extend the mandatory allocation of credit resources to MSMEs. At ile-legislate narin ang access to market para po madali makabenta ang ating MSMEs sa mga merkado. Another is the OTOP bill to institutionalize the OTOP program to guide LGUs on the comprehensive assistance and holistic approach to support MSMEs. Meanwhile, the P3 bill will institutionalize the continuity of the P3 program, ito po ‘yung binanggit ko kanina na panlaban sa 5-6, which would improve MSMEs’ access to credit.

In conclusion, the work of the Duterte administration to support MSMEs pre-dates the COVID-19. and looking back, we’ve made great strides in empowering entrepreneurs and making them smarter. And despite the pandemic, our MSMEs remain steadfast and resilient by turning challenges into opportunities.

Thus, we are confident that as our MSMEs’ resilience and ingenuity spark hope among Filipinos, we will be able to build back better and give our countrymen a more comfortable and greater quality of life. That’s why we would like to thank our president, President Duterte, for his big support to the MSME sector, our agency partners, our legislators, our private sector partners, and definitely, we thank our entrepreneurs, kayo po mga MSMEs, for being the new hope of our country against the pandemic especially as you bring us forward into the post-pandemic future! Maraming salamat po at mabuhay tayong lahat! Mabuhay ang mga MSMEs!

Date of Release: 2 August 2021