Senate allots P2 B for MSMEs in 2018 budget

MANILA, Philippines — The Senate has allocated P1 billion each for two Department of Trade and Industry (DTI) programs that seek to strengthen micro, small and medium enterprises (MSMEs).

 Sen. Loren Legarda, chair of the Senate finance committee, said P1 billion in the proposed P3.7-trillion national budget for 2018 was allocated for Pondo Para sa Pagbabago of the Small Business Corp. and another billion for the Shared Services Facilities (SSF) program of the DTI.

As principal sponsor and author of Republic Act 9501 or the Magna Carta for MSMEs, she said the appropriation was meant to help expand and enhance the capabilities and competency of the sector in support of President Duterte’s program to boost economic growth.

The first program, she pointed out, would boost the continuous development of MSMEs, while the second would enhance the SSF productivity and competitiveness. 

In the P1-billion fund for SSF, at least P200 million will go to state colleges and universities that implement livelihood initiatives; at least P100 million for Schools of Living Traditions (SLTs), and P50 million for the MSMEs affected by the war in Marawi City.

“Compared to larger enterprises, our MSMEs are more susceptible to changes in economy, which would also affect their capability to employ and expand. Government interventions should address these factors that contribute to the unemployment and underemployment within our working class, as well as poverty incidence among all Filipinos,” Legarda explained.

A 2015 survey of the Philippine Statistics Authority showed that 896,839 or 99.5 percent of the country’s 900,914 total establishments belong to MSMEs while only 0.5 percent or 4,075 are considered large enterprises.

The same study found that MSMEs have generated 4,784,870 jobs in 2015 while the large enterprises generated only 2,981,819. This indicated that MSMEs contributed almost 61.6 percent of the total jobs generated by all types of business establishments that year.

Of this percentage, at least 29.4 percent or 2,285,634 jobs were generated by micro enterprises, 25.3 percent or 1,968,452 by small enterprises, and 6.8 percent or 530,784 by medium enterprises.

Meanwhile, Sen. Cynthia Villar has pushed for the strengthening and creation of more MSMEs in the agribusiness sector, seeing it as a strong driver of growth and generator of jobs.

Villar, chair of the Senate committee on agriculture and food, said MSMEs account for about one-third of the country’s gross domestic product (GDP), as 50 percent of the group are involved in food and beverage businesses.

“Thus, we want to teach and guide farmers and farm owners to engage in business and tap opportunities. We should also extend support through capacity-building strategies and make them more competent and competitive,” Villar said.

The strategy, she said, works by educating and training farmers through affordable or free agri-related training seminars and courses, and by removing the barriers to their success and development.

 She also cited the need to enhance their technical expertise, financial literacy and access to credit, aside from hastening the mechanization drive in the agricultural sector.

At the recent 65th anniversary of the Agri-Trade Fair in Zamboanga del Sur, Villar told her audience that she has always been an advocate of entrepreneurship, believing that it is the key to economic freedom of Filipinos.

Being an entrepreneur, Villar said she has been pushing for legislative measures to help small businessmen like the Magna Carta for Micro-Enterprises and Republic Act 9178 or the Barangay Micro Business Enterprises (BMBEs) Act when she was a congresswoman.

“As we promote entrepreneurship and develop a new generation of entrepreneurs, we create MSMEs – a strong engine of growth in our country,” she said.

She emphasized that agribusiness is one of the long-term solutions in growing the agricultural sector and helping Filipino farmers and fisherfolk.

“They have the potential to become entrepreneurs. They can join the ranks of MSMEs,” Villar added.