MSMEs are RP’s saving grace amid crisis

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    LUBAO, Pampanga—Size-wise, they’re tiny. But with over 800,000 of them dispersed in the regions, micro, small and medium enterprises (MSMEs) can really save the Philippine economy from the impact of the global financial crisis, the country’s trade chief said here last Friday.

    “In the light of the global meltdown that is taking place, I believe it is the MSMEs that will keep the national economy afloat so to speak so that we can sustain the growth of our economy,” Trade Secretary Peter Favila told reporters at the sideline of his tour at the Mallari Nursery Furniture here. [DTI officials who are gathered for a planning session at the Subic Bay Freeport beginning Friday broke up in teams for tours in Pampanga, Bataan and Zambales to interact with entrepreneurs, according to DTI Central Luzon director Blesila Lantayona.]

    That expectation, he said, is hinged on the good performance of the MSMEs during the 1997 Asian financial crisis.

    Back then, they fueled the underground economy by being able to sustain small crews of workers and by producing goods largely for the domestic market.

    Their current strength—30 percent contribution to the gross domestic product and one million in direct and indirect employment as of 2008—make them a strong sector to reckon with, Favila noted.

    Capital-wise, the government alone poured at least P287 billion on them or an average of P40 billion annually for micro-financing support since 2001, he added.

    Deemed crucial in the country’s economic survival, Favila said President MacapagalArroyo has transferred the mandate of assisting MSMEs from the Presidential Management Staff to the Department of Trade and Industry starting late last year.

    The transfer of mandate became effective through the Magna Carta for Small and Medium Industries.

    Under the medium-term development plan, the sector should get P310 billion by 2010.

    “So we are very near meeting the target or even surpassing it,” Favila said.

    In assuming the mandate, he said the DTI will focus on two thrusts: Livelihood and job creation.

    According to him, the directive of the President is to help the MSMEs expand so they can be able to absorb more workers. They employ a minimum of 30 to 300 workers.

    “We admit there are displaced workers but government is ready to absorb them by helping them find work or start livelihood projects,” he said.

    Workers laid off from the electronics sector, among those hit by slowdown in export orders, are being retrained so they can enter the business processing outsourcing sector.

    “The good thing that is happening in our country is that we have so many workers who easily learn new skills,” Favila said.

    “There are many jobs that are available. We only need to learn the skills required of these jobs,” he explained.

    The DTI and the Department of Labor and Employment are also helping displaced overseas Filipino workers through job-matching or by becoming entrepreneurs.

    The Mallari Nursery Furniture, for instance, has hired Dominador Nicdao, a driver who lost his job in Brunei .

    Favila said that because of the strengths of the local MSMEs, the Asia-Pacific Economic Cooperation chose the Philippines as the coordinating country for the development of MSMEs in the region.

    “We are being copied by other countries in this respect and economic ministers have been calling me [for inquiries on MSME development],” he said.

    MSMEs have proven to be important such that their concerns are in the agenda of every Cabinet meeting since January, Favila added.

    In the stimulus package awaiting the nod of Congress, the DTI has asked for P160 billion in supplemental budget to, among others, support the growth of the MSMEs.

    The 2009 trade targets are in the subjects of DTI planning workshop at the Subic Bay Freeport starting this Friday and Favila would not say yet any figures.

    “We’re very careful about targets. Some say the global economic recession will take three to five years. We would like to set doable targets,” he said, adding: “What is important is there’s private-public partnership. In these times, we need to be helping each other because we’ve only one country,”


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