The Philippines - Micro, Small and Medium Enterprises (MSMEs) are defined as enterprises having asset size of P100 million and below and comprise 99.6% of all registered business in the Philippines. The sector employs 70% of the workforce. Compared to the absolute number of establishments and employment, SMEs hold relatively small share of value added and sales, less than 30%, thus suggesting their development potential in the country.
The Philippines' Micro, Small and Medium Enterprises (MSMEs) are defined as enterprises having asset size of P100 million and below and comprise 99.6% of all registered business in the Philippines. The sector employs 70% of the workforce. Compared to the absolute number of establishments and employment, SMEs hold relatively small share of value added and sales, less than 30%, thus suggesting their development potential in the country.
MSMEs have disadvantages over large enterprises, in terms of access to financing, market and technology. MSMEs lack market exposure and may not be able to afford the high costs of marketing and advertising their products and services. Moreover, many customers prefer to conduct their business with large established firms rather than the smaller ones which are considered risky. Thus, competition for market share with the already established firms is greatly skewed in their favor especially if they are highly capitalized.
To help MSMEs address these inherent weaknesses, there is a need to establish confidence in the products and services they deliver to the market to ensure these meet consumer expectations along with the required safety, regulatory and government standards globally. But how can MSMEs make their goods and services compliant with these regulations and compete in the global market?
MSMEs can seek testing, certification and inspection for their products and services from accredited Conformity Assessment Bodies (CABs) to demonstrate due diligence to their customers and to comply with health and safety regulations in target export markets. Accreditation can help MSMEs stand out from the competition by giving customers peace of mind that their products have passed strict tests.
Holding accredited conformity assessment results shows credible evidence of conformance with national and international standards and regulations which can differentiate a business from its competitors. Without it, MSMEs risk undermining their long-term success by missing opportunities to capture overseas customers.
Availing the services of accredited CABs also contribute to the operational efficiency of businesses in other ways, saving time and money by reducing bureaucracy and by helping with risk management and key aspects of decision-making. For instance, it can be used as a basis on which to make efficient and informed choices about domestic suppliers and promotes confidence in imports from other countries. It can also demonstrate due diligence in the event of legal action.
Accreditation is recognized around the world as a sign of quality and good services and achieving accreditation is reassuring for companies, and it gives their products and services grec!ter credibility in the market.
With rising concern about harmful substances, especially in food, toys, apparel and other consumer products, governments and retailers rely on accredited testing, calibration laboratories, inspection bodies and certification bodies to ensure conformance with international standards.
Accreditation can open doors overseas equally as well as those in the domestic market for MSMEs. An increasing number of organizations in both the public and private sectors in domestic markets and overseas are specifying accredited testing, inspection or certification as a precondition to tendering for contracts.
The DTI-PAB facilitates trade by signing Mutual Recognition Arrangements (MRAs) and Multilateral Recognition Arrangement (MLA) with international accreditation organizations such as Asia Pacific Laboratory Accreditation Cooperation (APLAC), Pacific Accreditation Cooperation (PAC), International Laboratory Accreditation Cooperation and International Accreditation Forum (IAF). Countries that are signatories to MRA and MLA recognize the reports and certificates issued by an accredited CAB. This will help MSMEs in getting their products to market faster and in eliminating the costs associated with retesting, re-inspection and re-certification at the border.
With the Department of Trade and Industry's (DTI's) mission to enable businesses and empower the consumers, it created the Philippine Accreditation Bureau (PAS) to help businesses and protect consumers by providing accreditation to organizations that conducts certification, inspection, testing and calibration services. While the PAS accreditation scheme is voluntary, getting accreditation can help CABs in gaining trust among MSMEs. It demonstrates the willingness to go above and beyond the minimum requirements of laws and regulations to help MSMEs comply with the regulations and standards in the markets they are operating in.
To know more about the accreditation services of the DTI-PAB, please visit their website at www.pabaccreditation.dti.gov.ph or contact DTI-PAB.