SMEs seen to sustain PH economic growth

Small and Medium Enterprises (SME). ShutterStock image

MAKATI CITY — Aside from education and infrastructure, the government considers the development of small and medium enterprises (SMEs) as another key component that will sustain the long-term economic growth of the Philippines.

“We recognize how important SMEs are that is why we came up with programs like, Shared Services Facilities (SSF),SME Roving Academy, (DBFTA),” Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said during the recent National Export Congress.

Domingo added that SMEs will be at the center of the agenda during the country’s chairmanship of the Asia-Pacific Economic Cooperation (APEC) conference next year.

“We feel that SME agenda is very important.  We are pushing to simplify the trade rules to make SME benefit in global trade. That means simplifying application forms and custom procedures,” Domingo said.

Domingo added that since 2011, DTI has been pushing this agenda in meetings of APEC, World Trade Organization (WTO) and the Association of Southeast Asian Nations (ASEAN).

“The Philippines’ hosting of APEC in 2015 is a momentous occasion for all of us here in the country as it will open up windows of opportunity. It has avenues for us to showcase what the Philippines has in store for the world,” DTI Undersecretary Ponciano C. Manalo added.

Manalo noted that some meetings and activities lined up for APEC, will be attended by ministers and businessmen from 21 APEC economies while DTI will be mounting various trade fairs to ensure that Philippine products get the best exposure.

“We are hopeful that they will share their experiences here in the Philippines with their friends, families and fellow businessmen back in their home country so that they too can come here to appreciate and patronize our country, especially our export products,” Manalo added.

Manalo noted that DTI is putting emphasis on SMEs and their role in inclusive growth. He added that SMEs and their multiplier effect have more impact on the economy when it comes to inclusive growth.

According to Manalo, in ASEAN, small and medium enterprises (SMEs) are considered as the backbone of economic development, accounting for 96 percent of all enterprises, and 50 percent to 85 percent of domestic employment. SMEs contribute between 30 percent and 53 percent to gross domestic product (GDP), and between 19 percent and 31 percent to exports.

In the Philippines, of the almost 945 thousand registered business enterprises in the Philippines as of 2012, 99.6 percent of these were micro, small and medium enterprises (MSMEs). The number of additional jobs generated by SMEs on the same year was almost 5 million or roughly 61 percent of the country’s total employment, as compared to only 2.6 million jobs generated by large enterprises.

Manalo also noted that ASEAN integration is another significant development in 2015 that will boost exports, and poses huge opportunities for local businesses and foreign businesses that intend to do business in the Philippines. With the country’s location and value-for-money in terms of labor, the Philippines can very well serve as a gateway for businesses wishing to tap the ASEAN region.