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SME Development Strategy-philippines

SMEs face various challenges in the area of human resource development, technology and R&D, access to financing, to name a few. These concerns are addressed in the "Philippine SME Development Strategy (1998) ". As the backbone of the Philippine economy, the SME sector comprises about 99.6 percent of all registered firms nationwide, employs 69.9 percent of the labor force, and contributes 32 percent to the economy.

Philippine Export Development

The PEDP provides the guide to boost export performance for the next three years and lay the groundwork to develop a sustainable and globally-competitive export industry. It puts emphasis on the synergy and complementation among the various programs and initiatives to create a unified and cohesive agenda. The Plan defines roles and commitments of both government and the private sector. It emphasizes the need to implement what have, for some time now, remained mostly on paper, and to evaluate such efforts with clear bottomlines. The Export Development Council (EDC) oversees the implementation of the Plan.

over the last five years, the SME sector had contributed to the country’s 6 percent growth and five million new jobs.There are disparate impediments to SME growth. Limited access to financing, marketing, human resource development, modern technology and information.

The effects of these impediments can be gleaned from the fact that although SMEs comprise 99.6 percent of all firms in the Philippines – a figure that is on par with those of South Korea, Japan and China – and employ 70 percent of labor force (lower than South Korea’s 78 percent, Japan’s 88 percent and China’s 75 percent), they contribute only 32 percent of value-added to the Philippine economy.

The importance of SMEs has been acknowledged worldwide. In every country, they constitute the bulk of all enterprises. That is why SME development is a global movement, and the concerted push for it is especially evident in Asian countries.

ADB strategy

The proposed ADB strategy addresses constraints - including the lack of infrastructure and incentives -- hindering the development of the SME sector. It proposes to provide SMEs access to technologies, markets and credits, and to support coordination of the ongoing and planned activities of others.

The strategy enhances the poverty reduction programs of both countries. In the Philippines, developing Mindanao is seen as crucial for balanced regional development. In fact, unbalanced development has contributed significantly to the island's peace and order problems. With the government renewing serious development efforts in Mindanao, ADB is also increasing its assistance there.

The SME development effort is estimated to cost US$80 million each for Indonesia and the Philippines. In the last 10 years, ADB has provided US$660 million in loans for Mindanao. In addition, US$920 million of other loans had significant Mindanao components.

To maximize the impact of its SME effort, the ADB is seeking the support of governments, the private sector, the East ASEAN Business Council, the international donor community and NGOs.

DBP Launches SPEED Project for SMEs

National SME Development Agenda


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