New DTI chief pledges to expand potential of small-time businesses
Business Mirror
July 13, 2016

WHILE micro, small and medium enterprises (MSMEs) perform an important function in supporting long-term economic growth, small-time entrepreneurs still undergo various challenges, as they try to develop and take their businesses to the global economic scene.

As of November 2015, SME contribution to the country’s GDP accounted for more than a third, or 35 percent, of the GDP.

More than playing an integral role in sustaining the country’s economic performance, SMEs also generate employment, accounting for 4,930,851 people, or 64.9 percent, of total employment in the Philippines in 2012, according to the National Statistics Office (NSO) and Bureau of Micro, Small and Medium Enterprise Development (BSMED).

However, before MSMEs can develop to participate in global-production networks, they first have to survive entering a highly competitive environment against larger firms while dealing with a myriad of other issues, such as problems in microfinancing and raw materials access; gaps in technology and technology transfer; and weak support system manifested by strict regulatory policies that characterize this country’s business climate.

“We realize the struggles, the difficulty as we promote entrepreneurship. The real story is it’s a difficult thing to get into business,” newly appointed Trade Secretary Ramon M. Lopez said to the hundreds of aspiring MSMEs gathered at the Philippine Trade and Training Center on July 1.

The Micro, Small and Medium Enterprise Development (MSMED) Week 2016 is the first public event for Lopez as secretary of the Department of Trade and Industry (DTI).

This year’s MSMED Week carried the theme  “Developing Innovative and Resilient MSMEs,” and opened workshops on branding, online marketing and photography, among others.

Lopez, who was the former executive director of Go Negosyo, an organization advocating entrepreneurship among Filipinos, admits his background gives him better insight into the needs of growing MSMEs and the assistance they need both from the government and the private sector.

Providing market access is just one government initiative that could help address the short-term woes of MSMEs. The trade secretary said in his first official function that he has made headway in securing the commitment of market providers or commercial structures to provide space for MSME retailers to display and sell their merchandise on a regular basis.

Lopez also bared the proposal for the drafting of a law or a department directive that will encourage government personnel to purchase products in bulk orders from MSMEs. Whether it’s government shirts, pants or socks for its staff from the national to the regional levels, product preference should always fall on MSME merchandise to foster a supply-and-demand relationship between the two entities.

The government should also improve industrial policy by providing MSMEs with access to newer technologies and service facilities to pave the way for more innovative practices in product and process development.

All these programs and initiatives remain in line with President Duterte’s recent pronouncements on the reduction of bureaucratic red-tape in government transactions for greater ease of doing business.

In his inaugural speech, Mr. Duterte called on all government agencies to subject all department procedures —from application forms to the processing time—to extensive review and revision in an effort to simply and streamline business processes.

Trade Undersecretary for Regional Operations roup (ROG) Zenaida Cusion-Maglaya  said, along with strengthening MSMEs, to become more competitive in the world market, the program also is in line with President Duterte’s employment agenda for the poor.

“The new DTI chief further emphasized that we have to push further the development of more MSMEs to help alleviate poverty, which is really the program the President wants: To give jobs to the poor and give them income,” said Maglaya, who accepted the offer to continue her work with the DTI under the same position.

Maglaya said the DTI is also looking at streamlining their business processes to lessen the number of delays in securing permits and certification.

“We want the Philippine Business Registry [PBR] upgraded and enhanced to make sure that when you get to PBR, you get all five agencies in one application,” Maglaya said.

There have been improvements in their registration procedures, in particular in their business-name registration, which only takes 15 minutes to accomplish, as compared to the whole-day processing required before the digitization of the application.

The trade secretary said he has a tough job ahead, but remains optimistic that by providing MSMEs with “all the support that the government could give” from machines to market access, enterprise development and global integration would soon follow.

“We have to really put in our hearts [that] as long as we have that passion, knowing the market, being smart entrepreneurs, tayo pong lahat ay magtatagumpay. Ang DTI ay para sa bayan, tagumpay para sa lahat,” he said.

In 2012 registered MSMEs in the country reached 940,886 with 46.4 percent in the trade and repair sector, 39.4 percent in services, 12.5 percent in manufacturing, and 0.9 percent in agriculture, according to the PSA and BSMED data.□