Thursday Talks: Webinar Series on Socio-Political and Economic Perspectives

June 16, 2022



Thursday Talks: Webinar Series on

Socio-Political and Economic Perspectives

Webinar 2: Accelerating the Potential of Digital Economy for MSMEs


A pleasant morning to the legislative staff, leaders, and officers of the Philippine Congress and the Development Academy of the Philippines.  Thank you for inviting me to join your Thursday Talks: Webinar Series.  I hope that these talks have proven inspiring and that you will continue your work in the halls of our Senate and Congress, armed with a newfound mastery of public policy systems, legislation, and public sector leadership.

I am especially grateful that you have chosen as your topic the Micro, Small and Medium Enterprises (MSME) Act or Republic Act 9501.  MSMEs in 2020 accounted for 99.51% of our nation’s businesses. The sector is responsible for an estimated 5,380,815 jobs or 62.66% of the country’s total employment.[1]

With these statistics, the vital role of MSMEs in economic growth and poverty alleviation cannot be overemphasized. MSMEs have a huge potential in becoming the main driver of our economic development and, given sufficient attention and support, this sector will no doubt accelerate the socio-economic empowerment of various sectors in the society, including women, youth, and the indigenous communities.

In 2008, I shepherded the enactment of the MSME Act.  Our purpose was that we develop the Filipino entrepreneurial spirit by providing a business environment that was supportive and conducive for it. Micro, Small and Medium enterprises are defined as any enterprise engaged in industry, agribusiness or services, whose total assets are not more than P3 million for micro, between P3 million and P15 million for small, and P15 million to P100 million for medium. The MSME Law provides 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. The law also provides access to new technologies and regular entrepreneurship training programs for workers.  Created under the Act is the Small and Medium Enterprise Development (SMED) Council that establishes and supervises Negosyo Centers throughout the country.

As the principal sponsor and author of the MSME Law, I believe that our development as a nation should be pursued with the end goal that everyone should benefit from the country’s economic gains. Progress should not be measured by the country’s infrastructure or urban development alone: on the number of highways, airports, ports, flyovers, buildings, or shopping centers.  Instead, we should measure our advancement by looking at the quality of life, the welfare and well-being, of each and every Filipino.

Because in the midst of this rapid pace of urbanization, the challenge lies in ensuring that those in the grassroots of the society also and actually benefit from the government’s efforts to provide basic services. Since 2008, it has since been my aim to promote MSMEs so that Filipinos, who have the knowledge, the creativity, and the will to succeed, are empowered to pursue a business, be their own boss and be the architects of their own destiny.

As I said, 99.51% of all businesses in the country are MSMEs.  However, based on the reports of the DTI, majority or 21.10% of the MSMEs can be found in the National Capital Region (NCR).   Also, the top 5 industries are in wholesale and retail trade, food service, automotive parts, manufacturing, service industries and insurance. These industries account for about 83.77% of the total number of MSME establishments.[2]

I would like to highlight this data.  Seeing that MSMEs are the lifeblood of our local economy, we need to broaden its reach: extend its benefits to the countryside, and spur economic activity in other sectors, especially those sectors that can preserve culture and the environment.

I have witnessed the untapped possibilities of millions of Filipinos: weavers, entrepreneurs, indigenous communities, and cultural creatives. There is so much potential for growth in our rural areas. We need to expand our reach to include local entrepreneurs and indigenous communities, and ensure that everyone benefits from government programs such as the MSME Law.

I would also like to promote green jobs and green skills in the country.  We put too much focus on retail and wholesale, service industries and manufacture. But I would like to encourage our people to engage in agriculture, forestry, horticulture, environmental information technology, creative industries and other careers that contribute to environmental preservation.

During the last three years, as Congresswoman of Antique, I can attest to the vital role of MSMEs in employment generation, economic growth, and cultural  identity or environmental protection. My visits to the countryside also made me realize that safeguarding our identity and our beliefs, whether tangible or intangible, is as important as the economic and political affairs of nations.

Panay, for example is filled with cultural treasures. The region has exquisite weaving, and unique eco-tourism and cultural tourism. These industries are fit for MSMEs promotion.  We established a handicrafts enterprise in Antique, a piña cloth weaving center in Aklan, a pottery center in Iloilo, and  Capiz-shell handicrafts production in Capiz.  These are but a few of the MSMEs, which prove that embracing our rich heritage and advancing sustainable development translate into jobs, incomes, and livelihoods. With the support of government, and the implementation of the MSME Law, these MSMEs became powerful platforms for the promotion of viable rural livelihoods, for cultural preservation, for the socio-economic empowerment of indigenous peoples, and even for environmental protection.

We have just celebrated the 124th year of our independence. As I joined the rest of the country in commemorating this turning point in our lives as a country and as a people, I have emphasized that the greatest challenge that we continue to face is that we are still bound by the shackles of poverty and inequality, despite the freedoms we enjoy.

As a legislator, I acknowledge the valuable contribution of the MSMEs in boosting the country’s development and in helping bail our people out of the poverty trap. Allocating government support for the promotion of MSMEs will encourage people to engage in self-generated sources of livelihood, provide jobs to others so that people will no longer have any reason to beg in the streets.  And as I said, I would like to focus on providing funds for communities at the grassroots. When we support micro and small businesses, weavers, farmers and fisherfolk, creative entrepreneurs at the grassroots, we do more to empower the very lifeblood of this nation. But we need to let them know.

I call for massive information dissemination so that those in the grassroots would know that the government does have the resources and mechanisms which, in turn, will redound to their benefit and well-being.  I would also like to ask our local authorities, to look deeper into the needs of our local entrepreneurs and indigenous communities so we can subsequently provide the exact kind of assistance that they need.

Let us continue to expand the scope of our assistance, especially those in areas with high poverty incidence.  We need to identify those who have skills and indigenous resources but are unable to register or acquire the usual permits, so that we can open up more opportunities for them.  Our laws and regulations should make access easier and not more tedious or burdensome for them.  Perhaps we can consider looking into the possibility of relaxing the complex application process and burdensome collateral requirements, considering that most of the beneficiaries of MSME programs come from the rural areas. They also have to devote their time, effort, and money just to avail of the assistance intended for them. Let us not further hinder them from having access to the assistance and opportunities due them.

In closing, I wish to reiterate my support for the MSMEs sector, and also for those in the rural sector, for the protection the rights of our IPs, and the promotion of  green jobs and the creative industries: our culture, heritage, artistry and craftsmanship. Let us ensure that our MSMEs are provided with the financial and technical assistance to ensure their survival. We have to continuously empower them in order to unlock more markets, enhance products, develop more businesses, and strengthen the protection and sustainability of our livelihoods.  Let us do more for the sector that is 99+% of our nation’s businesses, and for those who have employed more than 5 million of our fellow Filipinos.

Once again, thank you for having me.  Isang luntiang umaga sa inyong lahat.

[1] The 2020 List of Establishments of the Philippine Statistics Authority (PSA) recorded a total of 957,620 business enterprises operating in the country. Of these, 952,969 (99.51%) are MSMEs and 4,651 (0.49%) are large enterprises. Micro enterprises constitute 88.77% (850,127) of total MSME establishments, followed by small enterprises at 10.25% (98,126) and medium enterprises at 0.49% (4,716).

[2] The top five (5) industry sectors according to the number of MSMEs in 2020 were: (1) Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (445,386); (2) Accommodation and Food Service Activities (134,046); (3) Manufacturing (110,916); (4) Other Service Activities (62,376); and (5) Financial and Insurance Activities (45,558). These industries accounted for about 83.77% of the total number of MSME establishments.