Government's Program for SMEs

One of the programs of the Philippine Government for Small and Medium Enterprise (SME) is “Strategic Imperatives for SME Development” under a program “Forging a Truly Dynamic and Competitive SME Sector” with an aim of modernizing the SME sector to have an economic development because Small and medium enterprises are a key component in the chain of institutions contributing to national economic growth. Enhancing the vitality of SMEs is of pivotal importance in maintaining Philippine dynamism into the 21st century.  SMEs are a major vehicle in the growth and sustainable development of a globally- competitive Philippine economy. (DTI-Cebu)

Initially, the program focuses on defining the importance of the SME to the Philippine Economy. SMEs currently constitute 99% of all business establishments, employ 55% of the country's labor force and contribute to some 25% of value-added. Most SMEs, however, face various challenges in the areas of human resource development, technology and R&D, access to financing, to name a few. To address the problem, the government came up to imperative strategies in promoting and developing the SME industry. The five imperative strategies are:

1. Narrowing the Focus: Small Firms, Specific Sectors

2. Promoting Synergistic Linkages among Firms:

 Gearing Up for Maximum Growth

3. Strengthening Technology and R&D Initiatives

4. Bolstering Human Resource Development for SMEs

5. Improving SME Access to Financing

1. Narrowing the Focus: Small Firms. Specific sectors- the government urges the local SME investors to start the business venture in a focused and defined industry, grow it and starts to widens the array of the product. For instance, in Benguet province, the local government urges the farmers to have a zoning. Meaning, the government urges the farmers to choose specific type of vegetables/ fruits they want to grow and the other farmers to plant other crops so there would be a control in production. We can ascertain that all the key crops will be available in an adequate amount, not over or under production. In that way, a return of investment will be assured with profits. Moreover, the government will provide seminars and tutorials on how to grow the products they cultivate better to provide a better production.  In other word, they will be undergoing skill development to the products they cultivate.

2. Promoting Synergistic Linkages among Firms. This means that, the government will help the SME entrepreneurs in promoting their products. This is an imperative strategy in providing proper linkages on how to transport products from farmlands to markets. With the help of this strategy, the assurance of proper disposal of products will be attained and the consumers in all sides of the country, even international markets will have an access to the products.  With the help of this strategy, the production and transportation costs will be lessened so helping them to invest more. If they invest more, there would be higher government income from taxes, more jobs, and more economic stability.

3. Strengthening Technology and R&D Initiatives. One of the challenges that our SMEs are facing is the access to the right technology that would aid in better and faster productions while lessening the production costs.  The government will help the SMEs in identifying their needs in production, and help them in acquiring such technological needs, probably through loans or lease.

4. Bolstering Human Resource Development for SMEs. This imperative strategy focuses on human resource development. In a business, proper human resourcing is vital in cost effectiveness, as well as production effectiveness. The government, through Local Government Units (LGUs) and specific national departments of the government such as CHED, TESDA, DOLE and DECS, will provide proper trainings especially in Human resource management and production management to the SMEs so they will gain knowledge, skills and proper attitudes of being globally competitive businessmen.

5. Improving SME Access to Financing. This strategy focuses on financing SME entrepreneurs to start business and help them grow their businesses. The government provides ways to help the small scale businessmen in financial matters. With the help of the government owned financial institutions like banks and social departments like PAG-IBIG, SSS and GSIS, the entrepreneurs can easily have their loans and leases to start their business and/or expand their business.

      To sum up, the “Strategic Imperatives for SME Development” program of the government to the Small scale businessmen is a win-win solution for the SMEs and the government in promoting a stable economy and economic development. At the end of the day, the Government has the sole responsibility to its people in helping them to be globally competitive businessmen because this will also mean a Globally Competitive Philippine Economy.