EU, PH partnership to develop MSMEs

MANILA, Philippines – The European Business Chamber of Commerce of the Philippines launched Wednesday, June 4, the European Union-Philippine Business Network (EPBN), an effort to advance “the friendship and business between the Philippines and the European Union (EU)” in spurring entrepreneurship and economic development.

In his keynote message, National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan said EPBN was an initiative aimed at developing the Micro, Small, and Medium Enterprises (MSMEs).

In 2011, the MSME sector accounted for about 99.6% of registered businesses in the country and employed around 3.9 million people in the same period. Nearly half (47%) of the total MSMEs were engaged in wholesale and retail trade, followed by manufacturing sector (13.7%), and accommodation and food services activities (12.9%).

However, the MSME sector accounted for only 35.7% of the country’s total value added. “Meaning there is much room for improvement. The sector is seen to have a ‘hollow and missing middle’ as micro enterprises make up 91% of the sector. In this light, we welcome business-to-business cooperation with EU SMEs to boost the value-added of the sector,” Balisacan said.

He added the growth of the sector could contribute to poverty reduction, employment generation for the growing labor force, and economic development in rural and far-flung areas. “MSMEs are valuable partners to large enterprises as suppliers and providers of support services. The sector is likewise a breeding ground for new ideas and potential large earners of foreign exchange resources,” Balisacan said.

One of the challenges to MSMEs in the country is the ease of doing business, European Commission Directorate-General for Trade Helena Koenig, said. “What we’re trying to do is to have an ongoing dialogue with the government, see what their plans are, and see how we can fit in in that process,” she said. (READ: ‘ASEAN integration an opportunity, not a threat to PH SMEs’)

Through the EPBN, sub-sectors such as agribusiness, manufacturing, tourism, Information Technology-Business Process Management (IT-BPM), logistics, and construction will be promoted. “Focusing MSME linkage between Philippine and European firms in these areas will certainly help the government achieve its goals of inclusive growth and poverty reduction,” Balisacan said.

Balisacan said that measures to further reduce the cost of doing business in the country remained a priority. “We have taken steps to hasten the process of registering business, securing business permits and clearances, among others,” the NEDA chief said.

“Moreover, we have made huge strides in improving the situation in security risk areas. Very recently, we have entered into a Framework Agreement for Peace and Development in Mindanao,” he added.

Balisacan also cited the government’s continued support for priority sectors that contribute positively to quality employment and increased productivity.

Balisacan also mentioned the plan to accelerate the revival of the manufacturing sector, given its potential for innovation, value adding, and backward linkage with the agriculture sector, the main source of livelihood of the poor.

Total trade has been increasing for the past years with exports to EU accounting for 12% of the total Philippine exports in 2013 at US$6.55 billion, and imports from EU comprising 10% of the country’s total imports. – Rappler.com

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