Every July, we mark National MSME Month in the Philippines – and rightly so. MSMEs are the engine of our economy. They greatly outnumber large corporations and employ more than half of our workforce. As an advocate for MSMEs for two decades now and myself a businessman, I feel that these last few months must have made us more attuned to the realities on the ground for our small entrepreneurs. Because if we truly believe MSMEs are essential, then we also have to recognize what they have been through – and are still braving – these last few years.
Too many things have happened lately that challenge our MSMEs. In a perfect world, a small business would face competition and market pressure – but not a relentless parade of disruptions. This is the hardest part of being an MSME owner: progress can be fragile. Large companies often have buffers, but MSMEs, by contrast, often depend on thin margins and tight operating cycles. They do what they can with what they have, but their runway is shorter.
The struggles of MSMEs are not a reflection of weakness. Many MSME owners are hardworking, innovative and resilient, and they continue to learn. We saw how many of them adapted during the pandemic, but now the conflict in the Middle East has sent energy rates soaring. This has contributed to volatility in energy markets and, in turn, energy rates have soared. For MSMEs, energy hikes show up directly on the bills that affect daily operations. And when these costs increase, prices follow – sometimes so quickly that MSMEs can no longer keep up with the added costs.
And now, many fear they may not be able to handle the wage hike.
While a wage hike is often introduced with the intention of promoting fairer incomes and supporting workers, we also have to be honest about capacity. If wages increase while other costs – especially energy and compliance-related expenses – also rise, then MSMEs may struggle to adjust quickly enough. This is not the fault of owners who have always tried to do right by their employees. The question becomes: how do we balance fairness with viability, growth with stability?
Wage increases can and should go hand in hand with productivity improvements, better access to financing and the right business support. Otherwise, there will be unintended consequences such as fewer hires, delayed investments or reduced expansion. These are things that bring harm in the long run.
Fair wages must come with a way for businesses to comply while still growing and sustaining jobs, and that is why we must continue to upskill. We must strengthen from within. And the most practical way to do that is through upskilling, both MSMEs and the workforce.
When MSMEs learn better production methods, improved quality control, stronger inventory management and smarter customer service, productivity rises. When productivity rises, businesses can absorb cost pressures more effectively. Upskilling can take many forms – short courses, on-the-job training, mentorship and practical modules tailored to real MSME operations.
As businessmen, we know that talent and capability are long-term investments. And as advocates, we should insist that MSMEs get support that is accessible, timely and relevant. But training alone cannot solve everything. MSMEs also need capital – especially working capital for the daily realities of operations like purchasing materials, building inventory, covering payroll gaps and managing slower payment cycles.
Access to financing should also be more responsive to MSME realities. Lending should understand cash flow patterns, trade activity and business performance, as these can make the difference between a business that survives or stagnates.
And while financial institutions have their own responsibilities, we also know government support and policy direction can help make financing channels wider and safer for both lenders and borrowers.
And now, with regional integration upon us, we must teach MSMEs how to reach markets beyond their physical borders. One of the biggest myths about MSMEs is that they must choose between serving their community and growing into bigger markets. In reality, growth can begin locally and then extend outward.
Many of our MSMEs already have the product quality or service capability, and any of the challenges of cross-border trade are already being addressed by technology. What they may lack is structured know-how, such as pricing for different markets, how to package and label properly, how to respond to buyer requirements, how to maintain consistency and how to operate with cross-border sales discipline.
An advantage of this is that it reduces dependence on one local demand cycle, especially as we continue to open up our markets in ASEAN. As we continue opening up markets across ASEAN, MSMEs in the region face both shared opportunities and shared realities. Everyone is in the same boat, but not everyone rows in the same way.
This will become all about readiness. For Philippine MSMEs, ASEAN can be a chance to scale what works, learn from peers and build resilience through diversification. For ASEAN partners, Philippine MSMEs can also be valuable suppliers and service providers, especially those with strong workmanship and customer responsiveness. The region can grow stronger together, but that requires investment in the capability of small businesses and not just big enterprises.
So yes, July is a month for celebration. But it should also be a month of commitment. Next week, Go Negosyo – the non-profit I founded more than 20 years ago – will be holding the MSME Summit 2026, in cooperation with the Department of Trade and Industry, the MSME Development Council and the ASEAN Business Advisory Council Philippines, of which I am vice chair and chair, respectively.
We will keep doing the work that matters, and I will continue to be grateful that government agencies, private sector partners and our country’s business leaders continue to support these efforts. But there is more urgency today: if we invest in MSMEs now, we protect jobs today and strengthen growth tomorrow.