Promote SME development, Lopez tells big firms

MANILA, Philippines – Trade Secretary Ramon Lopez is urging chief executives of big companies to develop and promote the involvement of micro, small, and medium enterprises (MSMEs) in the ASEAN region’s production network and supply chain.

A former company executive himself, Lopez said implementing an inclusive business model would significantly enhance business bottomlines through supply-demand gap linkages while contributing substantial impact to the poor and low-income segment.

“The integration of these communities into global value chain improves their quality of lives and makes for better business with diversified supply and distribution systems. For business and investors, inclusive business is not only the new mindset for innovation and market leadership, but a key contribution of the private sector to communities and sustainable development goals,” he said.

Noting MSMEs’ crucial role in the ASEAN economic integration, Lopez said DTI has mapped out plans to strengthen the sector and enable it to join the global value chain.

“We intend to increase the competitiveness of MSMEs so they can be part of the domestic, regional, or global value chain as manufacturing entities in their own right, whether involved in the production of parts and components that have backward linkages within the production network, or through the provision of services in manpower, logistics, transportation, or communications,” he said.

According to the DTI, MSMEs serve as the backbone of most Asian countries, accounting for more than 96 percent of all enterprises and contributing between 30 to 53 percent to their gross domestic product.

“Our guiding principle therefore is to provide opportunities for our MSMEs to participate in the region’s production network and supply chains to unlock the benefits of integration,” Lopez said.

“I enjoin companies to continue partnering with us, this time with single-minded focus on MSMEs to develop and promote their involvement in mainstream business,” he said.

DTI and Go Negosyo launched last week a joint undertaking called “Kapatid,” which is designed to optimize industry clustering using value chain approach to achieve MSME development.

The project will be in collaboration with groups such as the Philippine Chamber of Commerce and Industry, Association of the Filipino Franchisers Inc., and the Employers Confederation of the Philippines.

An inclusive business model is defined by the World Bank as a private sector approach in providing services, goods and livelihoods at a commercially viable basis to people at the base of the pyramid by making them part of the value chain of companies’ core business as suppliers, distributors, retailers or customers.