Unlike India, where there is a separate ministry that deals with schemes relating to the MSME and other departments, and while coordinating through the Government of India, the rules in the Philippines vary slightly.
According to statistics, the micro, small, and medium enterprises (MSMEs) are a primary driver of the Philippines economic growth. MSMEs accounted for up to 99.6% of the total enterprise, employing at least 62% of the Philippines workforces. MSMEs also contribute to a significant portion of the Gross Domestic Product (GDP) accounting for 36% of the total GDP. However, like many other MSMEs around the regions, most of them have difficulty in sustaining and growing their businesses.
Microbusinesses in the Philippines are defined according to the size of assets, equity capital, and several employees. A typical micro business employs nine people or fewer, holding assets worth up to three million Phillipenes pesos and below. Small and medium businesses are also defined using a similar rating scale, and the Government assists them in various ways. The Government has several schemes that different industries and establishments are allowed to avail of if they are planning on getting a competitive advantage against the companies that have been running for longer and are more established in the business.
The legal definition of MSMEs in the Philippines and according to the Philippine Standard Industrial Classification provides the framework in profiling the firms that underwent UP ISSI's management audits. They identified issues and problems faced by these firms under each functional area of management, such as marketing, production, organization and finance. On the other hand, some of the best practices and coping mechanisms in overcoming the constraints in the development of MSMEs were access to finance, technology and skills, information gaps and difficulties with product quality and marketing. Finally, after presenting the problems encountered by the firms, this paper formulates general recommendations for the Government, UP ISSI and the MSMEs studied.
To improve MSME’s productivity, DTI understands that MSMEs will have to adopt more sophisticated technology in their production processes. However, the next challenge will be access to that technology. In support of one of the 7Ms: Machine, DTI has been implementing its Shared Service Facilities (SSF) Project as one of the strategies to achieve its goal of inclusive growth and jobs generation. Specifically, SSF aim is to increase productivity and improve the competitiveness of MSMEs by providing them with machinery, equipment, and tools under a shared system. SSFs are looked after by cooperators for the common use of MSME beneficiaries working in priority industry clusters. The cooperator could include organizations of people, cooperatives, industry/trade/business associations, local government units (LGUs), non-government organizations (NGOs), state universities/colleges (SUCs), technical vocational schools, and other similar government academic and training institutions. While the beneficiaries of the project are predominantly cooperatives, associations or groups of MSMEs, this includes individual MSMEs or entrepreneurs who may not be members of cooperatives, associations, or organizations. Students, researchers, trainees, teachers, and service providers may also avail the services of the SSFs.