Despite SONA 2015 snub, small businesses still gov’t priority

Chris Schnabel
Despite SONA 2015 snub, small businesses still gov’t priority
With its remaining time, the Aquino administration plans to use APEC and new laws as a platform to push the growth of micro, small, and medium enterprises in the country

MANILA, Philippines – The lack of attention given to micro, small, and medium enterprises (MSMEs) during President Benigno Aquino III’s final State of the Nation Address (SONA) on July 27 may seem odd for an administration that has repeatedly stated it is aiming for inclusive growth

Trade Secretary Gregory Domingo said, however, that MSMEs are still central for the administration planning as it enters its final lap.

“Their (MSMEs) absence from the SONA doesn’t mean its been de-emphasized. In fact it’s a really big thrust of ours this year and for the following year,“ said Domingo at GoNegosyo’s 10th year anniversary gala held Tuesday, July 28.

The reason for its absence, he explained, was that the SONA is intended for a wide audience and not a specifically business one. (Read: FULL TEXT in English: Aquino’s 6th State of the Nation Address)

It was also the President’s valedictory SONA and so the macro-economic picture, political, security, and socio-cultural issues took precedence, he added.

APEC platform for SMEs

The trade secretary said that boosting MSMEs is particularly important this year as the country hosting the Asia-Pacific Economic Cooperation (APEC) meetings this year will provide an ideal platform for them.

“One of the biggest agendas we have for APEC is support for MSMEs. That’s how important they are to our agenda,” he said.

Domingo himself also presided over an APEC Trade Ministers meeting attended by World Trade Organization officials last May, which centered on opening up cross-border business opportunities for small firms.

Filling supply chains

A significant part of the administration’s planning for this is the creation of industry roadmaps in a bid to encourage MSMEs to participate in the supply value chains of various industries.

“These roadmaps specifically look at the supply value chains of each sector to see where the gaps are and how we can fill them up,” Domingo explained.

Domingo said that by latest count, there were over 20 industry roadmaps created and “we’re working on another 18 or so. So by the middle of next year, the Department of Trade and Industry (DTI) would have close to 50 roadmaps.”

He singled out the automotive industry roadmap, since renamed as the Comprehensive Automotive Resurgence Strategy (CARS) Program that was signed Aquino on June 1, as particularly important one.

The importance of the automotive industry lies in the large volume of its value chain and the flexibility in manufacturing that it affords.

“The supply chain of the auto industry is similar to other sectors, so there is a lot of overlap. To the extent that we develop that industry, it will also fill up the gaps in supply chains for other manufacturing sectors,” Domingo explained.

HONORING. Senator Bam Aquino (in white) says they decided to name Republic Act No. 10644  as the Go Negosyo Act in honor of the advocacy's contribution to entrepreneurship in the country. File photo by Chris Schnabel/Rappler

Go Negosyo Act at work

Another source of government support for MSMEs comes from the Republic Act No. 10644 or the GoNegosyo Act, signed by the President in July of last year.

The act creates the support services on the ground by requiring every local government unit (LGU) to create a negosyo center (business centers) within their jurisdictions.

The center is tasked to provide 4 basic services essential to MSMEs; access to finance, access to markets, access to training, and capability-building and ease of doing business.

The rational behind the law is to help MSMEs, such sari-sari or variety store owners, farmers, fishermen, and backyard manufacturers, to access markets where the purchasing power is, Senator Benigno “Bam” Aquino IV said. Aquino IV, the President’s cousin, is the principal author of the Go Negosyo Act.

A lot of MSMEs are limited to products and services that are local to their own areas. So if you are in a poor community and you are only able to sell to a poor community, then the value created is not much. “But if you’re able to connect them to markets where people have purchasing power, then the value will grow exponentially,” he explained.

The law is already in the rollout phase, now it all really depends on how much money is budgeted for it each year, Aquino said.

“For 2015, we were able to budget roughly 100 negosyo centers. To date, we have already built about 62. We’ll end the year with over a hundred. And then next year, we’re hoping to add another 200 to 300 centers,” he said.

“We’re really hoping that these centers can be the spearhead for supporting MSMEs in the country moving forward,” Aquino said.

While acknowledging that the current administration has indeed placed the emphasis on MSMEs, the senator wished it could have focused on it back in 2010 when Aquino was elected.

“The really big push for it started around 2013, because previously the services were there but they weren’t really housed in one place, it wasn’t streamlined,” he explained.

The DTI has different functions, including consumer protection and trade promotion, but he said “the new law puts support for MSMEs front and center.” 

“In our case, we’ll be pushing for the MSMEs even after the President steps down as my term ends in 2019,” the senator added.

ENCOURAGEMENT. Investment encourages entrepreneurship and it is important that we continue to erase the perception that it is difficult to do business in the country because of corruption, Gawad Kalinga's Tony Meloto says. Photo by Chris Schnabel/Rappler

Creating a positive environment

Aside from concrete legislation, the administration has provided support in other less tangible ways, shared Tony Meloto founder of social entrepreneurship umbrella organization Gawad Kalinga.

“For me I think the biggest support this administration has made is to show us honest leadership through ‘Daang Matuwid’ (Straight Path platform),” he said.

Its greatest effect, he added, has been to change the global perception of the country and also, crucially, to change Filipinos’ own perceptions of it, as previously both foreigners and local entrepreneurs were afraid to invest due to corruption.

Investment encourages entrepreneurship and it is important that we continue to erase the perception that its difficult to do business in the country because of corruption, he explained.

Meloto added that entrepreneurs cannot depend on government for everything but is optimistic that there is much that ordinary citizens can do now.

“Things are starting to change here, and I think the administration played its part in finally putting the entrepreneurial DNA in the Filipino,” he said. – Rappler.com

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