ASEAN SMEs Training Workshop

Opening Statement
Anti-trafficking Bicameral Conference
Philippine Senate
November 12, 2012

I am truly honored to address the participants of this special gathering of the US-ASEAN Business Council on ASEAN Small and Medium-sized Enterprises.

The focus on SMEs has been growing in recent years, and has even been cited in the Vladivostok Declaration of the Vladivostok APEC Summit 2012 as “a significant driver of development and innovation in the Asia-Pacific region that will improve the quality of economic integration and competitiveness of our economies.” [1]

In the Philippines, Micro, Small, and Medium-sized Enterprises (MSMEs) comprise 99.6% of the total business enterprises operating in the country. This figure is reflective of the significance of SMEs in the ASEAN region.

Statistics from ASEAN show that, generally, SMEs account for more than 96% of all enterprises and between 50% to 85% of domestic employment in many ASEAN Member States. Likewise significant is the contribution of SMEs to individual GDPs, which is between 30% and 53%. On the other hand, the contribution of SMEs to exports is between 19% and 31%. 2
But the importance of this sector goes beyond what we see in statistics. Aside from being the lifeblood of economies, they are powerful platforms for promotion of viable rural livelihoods, cultural preservation, socio-economic empowerment of indigenous peoples, and environmental protection.

I have wholeheartedly supported MSMEs because I believe that they are the future of business and investment in the country.

The growth of wage employment opportunities has always been difficult owing to a lot of domestic and global problems. Thus, beyond just the provision of short-term remedies, like wage hikes and wider benefits of the employed, we should provide long term solutions that are independent of the traditional wage employment avenues.

Viable employment alternatives such as self-employment, particularly on micro enterprise activities, will strongly complement the overall provision of jobs for the growing workforce that is so dependent on wage employment.

In 2008, we in the Philippine legislature succeeded in enacting Republic Act No. 9501, also known as the Magna Carta for Micro, Small and Medium Enterprises, which I authored.
The MSME Law provides more assistance to entrepreneurs by requiring lending institutions to allocate at least eight percent (8%), an increase from the previous six percent (6%), of their total loan portfolio to micro and small businesses. It also provides access to new technologies and regular entrepreneurship training programs for workers to ensure the viability and growth of MSMEs in the country.

Beyond the MSME Law, there is also the Barangay Kabuhayan Law or RA 9509, which I likewise authored. It aims to establish a Livelihood and Skills Training Center in fourth, fifth and sixth class municipalities, empowering local governments to enhance the productive capabilities of their large yet untapped human resource and to open doors for employment and entrepreneurial opportunities in the countryside.

Studies made by ASEAN revealed that one of the biggest challenges to SMEs is funding their activities.3 This is precisely why we, as leaders, must ensure that this sector is given adequate support through legislation, implementation of existing laws, and coordination of key government players like our respective departments on trade, industry, labor, employment, and technical education. It is imperative in all countries that the key actors work with a single goal in mind, that is, to synergize efforts to provide not just jobs but also increased earnings to the region’s growing labor force.
Today, as we open this training workshop, we highlight the importance of promoting and facilitating business continuity and resiliency planning, especially among MSMEs.

We affirm our understanding of the fact that we must utilize the available resources in each ASEAN country, encourage the development of the exceptional creativity and artistry of people, and vigorously create and implement laws in order to promote the growth of MSMEs as a main driver of all our economies.

Thank you very much and I wish you a successful, productive, and enlightening ASEAN SMEs Training Workshop.

[1] http://www.apec.org/Meeting-Papers/Leaders-Declarations/2012/2012_aelm.aspx
[2] http://www.aseansec.org/Fact%20Sheet/AEC/AEC-10.pdf
[3] http://www.aseansec.org/Fact%20Sheet/AEC/AEC-10.pdf