MSME Strategy Development

Charting the way for MSME Development

Context

Micro, small and medium enterprise (MSME) development in the Philippines presents a crucial challenge. Comprising 91 percent of registered enterprises nationwide and employing 61 percent of the workforce (2008), the MSMEs have significant potential to assist in the effort to alleviate poverty in the Philippines. Within this framework, the SME Development Plan 2004 to 2010 was crafted in 2004 to transform the Philippine MSME sector into a major contributor in national development, to create globally competitive MSMEs and to generate 3.4 million jobs by 2010.

Approach

Working towards the improvement of strategies for strengthening MSME competitiveness, Component One of the Private Sector Promotion Program (SMEDSEP) has supported the crafting of the new MSME Development Plan (2010 to 2016), an instrument to enhance the competitiveness of the Philippine MSMEs through its provision of relevant measures and services along four areas – business and investment enabling environment, access to finance, access to markets and productivity and efficiency. Together with the Department of Trade and Industry (DTI) as secretariat of the National MSME Development Council, the Deutsche Gesellschaft für Internationale Zussamenarbeit (GIZ) provides advice on strategic approaches with a strong future orientation for the development of the MSMEs. Regional consultations were conducted in early 2010 by DTI to generate substantive inputs from various stakeholders to serve as basis in crafting the new MSME Development Plan. The integration of global themes such as gender, migration, climate change / green growth and corporate social responsibility (CSR) were also taken into consideration in the whole strategy development process (figure above).

The Component also focuses on enhancing capacities and competencies of the stakeholders for MSME development by providing conceptual and organizational advice and facilitating systematic policy and strategy dialogues among government, the private sector, local government units (LGUs), service providers and development partners. Towards this end, the Component plans to conduct capacity development measures, such as learning sessions on BIC approaches and the global themes both for the MSMED Council members and the Council Secretariats.

Results

As the outputs and services of this Component are utilized by relevant stakeholders, it is anticipated that the continuing process would result in the development of MSME development strategies that are responsive to the needs of MSMEs and which integrates global trends and innovative approaches. It is also anticipated that the formulated strategies would be able to influence the formulation and eventual outcomes of the Medium Term Philippine Development Plan (MTPDP) 2010 to 2016.

In this final phase, the Component seeks to achieve a situation where the new MSME strategies would have (1) supported Visayan MSMEs in achieving higher competitiveness and (2) served as basis for improving economic development in the Visayas. In addition, MSME relevant concerns including issues on and programs to promote equal access of women and men are effectively tackled in public private dialogue (PPD) forums and that social conflicts and tensions, in cases where they exist, are significantly reduced and not intensified.

The Four Outcome Portfolios of the MSME Development Plan 2010-2016

1. Business and Investment Enabling Environment is a dynamic practice and culture of governance that fosters the establishment, development, sustainability and competitiveness of socially responsible and environment friendly MSMEs
2. Access to Finance is the sustained availability of reasonably priced, socially responsive and environment friendly financial products, services and support programs that are designed for MSMEs, and that MSMEs can conveniently and readily access
3. Access to Markets is the sustained ability of MSMEs to be competitive in selling their products and services to existing and new markets, both domestic and international, under a climate of fair, free, socially responsive and environment friendly trade practices
4. Productivity and Efficiency refers to the production and delivery of competitive, standards compliant, socially responsive and environment friendly products and services that generates optimum economic returns