Inclusive business: Capacitating the domestic industries to go global
Business Mirror
December 7, 2016

THE continuous growth of the Philippine economy—currently looked at globally as the brightest spot in an economically burgeoning region in Asia—is effectively changing the economic scene in the countryside, carrying in its momentum the small and medium enterprises (SMEs) that have mushroomed nationwide.

In the third quarter of 2016 alone, the country’s GDP grew by 7.1 percent, the fastest growing among Asia’s major emerging economies.

The figure, which covers the first full quarter of the Duterte administration, is higher than the GDP growth of 7 percent in the second quarter, and is an improvement on the 6-percent GDP growth recorded in the same period last year.

The country’s strong third-quarter expansion has prompted the Asian Development Bank (ADB) to raise its 2016 full-year forecast for the Philippines anew to 6.8 percent. It is worth noting the higher forecast is due partly to the better-than-expected export performance in September 2016 when it finally broke into positive territory after languishing in negative territory for the previous 17 months.

The 5.1-percent year-over-year  growth in September tempered the year-to-date decline of Philippine merchandise exports to 6.2 percent, representing a moderate improvement from the negative 7.8-percent figure posted in the first eight months of the year.

It is hoped this rebound signals the start of the gradual recovery in Philippine merchandise exports.

Added to this optimism is the planned 7-percent infrastructure spending of the present administration, higher than the 5-percent target of the previous administration. This bodes well for the Philippine economy, comprised mostly of SMEs.

The growing number of SMEs operating in the country is seen by the government as a welcome development, a testament to the inclusive growth being experienced by various sectors. The government, the Department of Trade and Industry (DTI) in particular, has for years been in the forefront of efforts to harness the economic power of the country’s smaller, but numerous business entities.

Partnering with the private sector including business groups and federations, and academe and local government units, the DTI has various programs seeking to bolster the capacity and capability of SMEs. Its Regional Interactive Platform for Regional Exporters Plus (Ripples Plus) is a program seeking to expand the supply base of internationally competitive Philippine export products and services by extending strategic company-level interventions to SMEs.

Assistance comes in the form of capacity-building trainings, product development, market information and global product trends to participating companies to make them export-ready, and/or to enhance their export capacity and competitiveness.

The program prepares these companies to compete in terms of volume, quality, price, packaging, compliance with market-entry requirements, rules and regulations, design leadership or alignment with current design trends, and when export-ready, to match these companies with prospective foreign buyers and actively promote their products in the export market.

In the forefront of efforts to reach out to these small clusters of starting business entities and operational SMEs are the DTI’s Regional Operations Group  and Industry Promotion Group, and various government entities under its jurisdiction: the Export Marketing Bureau, the Philippine Trade Training Center  and the Center for International Trade Expositions and Missions.

Also part of the network of assisting government entities is the Foreign Trade Service Corps (FTSC), located in many of the world’s most significant hubs of trade and economic activities, serving to identify new markets and trends, among other functions, to help broaden the perspective of Philippine business about the many possibilities of global trade.

While conducting information and training sessions in its central offices in the National Capital Region, the DTI and its various service agencies, with the support of bigger private-sector companies, continue to send teams of experts to province-based businesses, to share information on bolstering the production capabilities of these local business enterprises, and encouraging them to expand their horizons to include not only trade in their geographical region, but the world market at large.

The DTI and its partners also continue to bolster the government’s infrastructure network, creating venues to facilitate business-to-business conversations, with the hope of building the country’s export capabilities, one small enterprise at a time.□

Senen M. Parlada, Director, Export Marketing Bureau, Department of trade and Industry