BMSMED Programs and SERVICES Ma. Victoria O. Magkalas Officer- - PowerPoint PPT Presentation

BMSMED Programs and SERVICES Ma. Victoria O. Magkalas Officer- in- charge, Management Services Division Bureau of Micro Small and Medium Enterprise Development 1 1

Definition of SMEs Philippine SMEs are categorized based on asset size (excluding land) and number of employees. Category Total asset value No. of employees Micro enterprises P 3,000,000 or less 1 - 9 Small enterprises P 3,000,001-15,000,000 10 - 99 Medium enterprises P15,000,001-100,000,000 100 -199 Source: Small and Medium Enterprise Development (SMED) Council 2 2

Role and Importance of Philippine SMEs SMEs play a major role in the country’s economic development through their contribution in the following: • Rural industrialization; • Rural development and decentralization of industries; • Creation of employment opportunities and more equitable income distribution; • Use of indigenous resources; • Earning of foreign exchange; • Creation of backward and forward linkages with existing industries; and • Entrepreneurial development. 3 3

Philippine SMEs’ Contribution to the Economy Philippine SMEs’ Contribution to the Economy MICRO 92.0% SMEs: vital engine of the economy (720,191) • 99.7% of total firms SMEs 99.7% SMALL 7.3% RP Enterprises (780,469) • 30% of value-added (62,811) (783,065) Large 0.3% • 70% of labor force MEDIUM 0.4% (2,596) • 60% of all exporters (2,839) LARGE 0.3% 0.3 % 30% LARGE 70% 70% MICRO SMALL AND 99.7% 99.7% MEDIUM MICRO SMALL 30% AND Firms MEDIUM Employment 4 4 Value added No. of Establishments Source: National Statistics Office (NSO) 2006

Philippine SMEs Compared to Asian Counterparts South Malaysia Thailand RP Japan China Indonesia Korea SME 94% 98% 99.7% 99% 99% 99% 99.99 % Establishments Employment 40% 55.8% 70.0% 78.7% 88.6% 75% 99.4%. Value Added 26%* n.a. 30.0% 47% 56.7% 68% 63.11% *Manufacturing only Source: JICA & various sources 5 5

Distribution of SMEs by Region, by Ranking 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 n s s a y A s N R n n n o N A M o a a l e a P R o u O o A o a y y E l y G z M l i s O C i i n a a g a a C Z u g g G A n R e a V N L s s e R s R e R i R d i i R n i A R V V R A V A l n n e A a A M a B o i r n l s P n l M S C a o t a y A o r I r n r c K a M e a e c v L e t i n n S g t o a B g t A s C s r a e D n l e C a e I C C C a h W C E o t r O b o m S N a 6 6 Z Source: National Statistics Office (NSO) 2005

Distribution of SMEs by Industry Top 5 Industry Groups Manufacturing Hotels and Restaurants 12.6% 14.9% Other Community, Social and Personal Service Activities 5.7% Real Estate, Renting and Business Activities 5.8% Others 10.9% Wholesale and Retail Trade 50.1% 7 7 Source: National Statistics Office (NSO) 2006

Distribution of SMEs in Manufacturing Top 5 Manufacturing Sub-sectors Top 5 Manufacturing Sub-sectors Manufacture and Non-Metallic Mineral Manufacture of Fabricated Metal Repair of Furniture Manufacture of Other Products Products except Machinery and 6.2% 4.4% Equipment 11.2% Others 17.6% Manufacture of Wearing Apparel 13.4% Manufacture of Food Products and Beverages 47.2% 8 8 Source: National Statistics Office (NSO) 2006

Issues and Challenges Facing Philippine SMEs 1. Creating an enabling environment for business 3. Productivity and structural limitations • Limitations relating to funding sources 4. Issues on access to markets 9 9

SME Development Plan 2004-2010 SME Development Plan 2004-2010 Le Legal Basis - RA 8289 or the Magna Carta for Small Enterprises (enacted 1991, amended 1997)  SMED Council - created by RA 8289  Primarily responsible for the promotion, growth, and development of the Philippine SME sector.  One of its main functions is to formulate a comprehensive strategy to promote SMEs and integrate it into other Philippine development plans.  SMED Plan 2004 – 2010 Launched in July 2004  Meant to help in the graduation of MSMEs to  higher levels of business undertakings and upgrading their productivity and value-added capabilities Endorsed by PGMA  Consistent with national SME agenda  Major role in target of creating  6 to 10 million jobs by 2010 Expected to help improve SME GVA from 32%  10 10 to 40% and create 3.4 million jobs by 2010.

SME Development Plan 2004-2010 SME Development Plan 2004-2010 Vision To create globally competitive SMEs that have adapted themselves to the new industrial economic environment. Long-term Goal To significantly increase the SME sector’s contribution to the country’s economic growth and social development. In quantitative terms, this means keeping SMEs apace with the performance levels of their ASEAN and Asian counterparts in terms of value added, employment, revenue generated and sales. 11 11

SME GVA increased from 30% to 40% and 3.4 million Jobs created by 2010 Enable by reforming Empower by providing Expand Access to Enhance Productivity Business and Access to Finance Markets (A2M) and Efficiency (P&E) Investment Enabling (A2F) Environment (BIEE) AG 10: Streamlining of AG 9: SME Financing AG 1: SME Information AG2: SME Counseling Business Regulatory Support Programs ) Support and Advisory and Requirements Upgrading of SME Centers AG 3: Facilitating AG11: Advocacy of SME Partnership / Linkages AG 6: Industry Related Laws for Competitive Support Productivity and Quality AG12: SME Institutions Restructuring AG 4: Enhanced Support AG 8: Entrepreneurship for Trade Fairs and Training Access to Market Services AG 5: Product Development and Design Services AG 7: Information Technology Appreciation and Application 12 12

SME Development Plan 2004-2010 Four (4) Outcome Portfolios 1. Expand Access to Markets Activity Group (AG) 1: SME Information Support SME Information Materials • Do You Want to Go Into Business • Programs and Services for MSMEs • Financing Programs for MSMEs • Catalog of Information Materials • Guide to the BMBEs Act of 2002 • Glossary of Business Terms • Directory of Common Service Facilities • Stoking the Fire of Filipino Entrepreneurs • Streamlining of Business Registration in LGUs 13 13

SME Development Plan 2004-2010 Four (4) Outcome Portfolios 1. Expand Access to Markets (cont.) AG 3: Facilitating Partnership/Linkages for Competitive Support • One Town One Product (OTOP) Philippines is a priority program of President Arroyo to promote entrepreneurship and create jobs. Through OTOP, local chief executives of each city and municipality take the lead in identifying, developing and promoting a specific product or service, which has a competitive advantage. It supports MSMEs to manufacture, offer and market distinctive products or services through the use of indigenous raw materials and local skills and talents. • Market matching • Raw materials sourcing • Domestic Trade Facilitation • SME Trade Houses 14 14

SME Development Plan 2004-2010 Four (4) Outcome Portfolios 1. Expand Access to Markets (cont.) AG 4: Enhanced Support for Trade Fairs and Access to Market Services • The DTI implements national, regional, sectoral as well as international trade fairs (such as the National Trade Fair or NTF, Manila F.A.M.E. International, International Food Exhibition or IFEX, e-Services Philippines, etc.) to increase the exposure of SME products in domestic and foreign markets, and to improve the distribution of SME products among and between the local manufacturing and trade sectors. 15 15

SME Development Plan 2004-2010 Four (4) Outcome Portfolios 1. Expand Access to Markets (cont.) AG 5: Product Development and Design Services • Product Designs • Technology Upgrading Workshops • Design and Technical Information • Design Library • Conduct of Design Competition 16 16

SME Development Plan 2004-2010 Four (4) Outcome Portfolios (cont.) 2. Enhance Productivity and Efficiency (P&E) AG 2: SME Counseling and Advisory and Upgrading of SME Centers • Eighty (80) SME Centers nationwide are equipped with high grade computer units and entrepreneurship multimedia instructional materials • Capacity Building for SME Counselors - 67 DTI Business Counselors were trained by DTI-BSMED thru UP-ISSI - Conduct of training for SME Counselors under the JICA-Shindanshi project • Manual for Managing an SME Center and Business Counselor’s Manual were developed and disseminated to DTI-ROs/Pos and SME Centers 17 17

SME Development Plan 2004-2010 Four (4) Outcome Portfolios 2. Enhance Productivity and Efficiency (P&E) (cont.) AG 8: Entrepreneurship Training • Export Management • Quality and Productivity • E-commerce • Skills Training 3. Empower by providing Access to Finance AG 9: SME Financing Support Programs • SME Unified Lending Opportunities for National Growth (SULONG) Program 18 18