Helping Philippine MSMES rise again

THE damage caused by Typhoon Odette would have a serious impact on the country’s economy that is already reeling from the effects of the Covid-19 pandemic. Based on the government’s running assessment of the destruction left the by strongest storm to hit the country this year, damage to infrastructure and the agricultural sector was initially estimated at more than P3.5 billion.

The Department of Trade and Industry last week announced it has earmarked P20 million for its Livelihood Seeding Program (LSP) to help micro, small and medium enterprises that were devastated by Typhoon Odette in the Visayas and Mindanao. Trade Secretary Ramon M. Lopez said the LSP will initially benefit about 2,000 MSMES in Siargao under the Negosyo Serbisyo Sa Barangay program. He said the DTI is currently assessing affected MSMES in other provinces that need DTI’S livelihood support. (Read, “DTI extends aid

to ‘Odette’-hit MSMES in Visayas and Mindanao” in the Businessmirror, December 24, 2021).

DTI’S attached agency, the Small Business Corp., will also open a P200million lending facility. “MSMES get LSP from DTI and [devastated] resorts can borrow from the Sbcorp. CARES [Covid-19 Assistance to Restart Enterprises] program,” Lopez said. The LSP seeks to expand DTI’S efforts in business development assistance through coordination with local government units.

MSMES comprise 99 percent of business establishments in the Philippines and are employing approximately 63 percent of the country’s workforce. Before the Covid-19 pandemic, our MSMES accounted for about 40 percent of the country’s Gross Domestic Product.

MSMES are among those that have been hit hardest by the Covid-19 pandemic. A study by the UN International Trade Centre shows that 60 percent of micro and 57 percent of small businesses have been strongly affected by the pandemic, compared with 43 percent of large firms. Due to their limited resources, surviving the crisis has been daunting for MSMES. Therefore, it is important to adopt policies that mitigate the negative impact of Covid-19 on our MSMES. This is crucial to help them recover from the debilitating effect of the pandemic.

Our MSMES constitute the backbone of the Philippine economy. In 2020, the Philippine Statistics Authority recorded a total of 957,620 business enterprises operating in the country. Of these, 952,969 (99.51 percent) are MSMES, and 4,651 (0.49 percent) are large enterprises. Micro enterprises constitute 88.77 percent (850,127) of total MSME establishments, followed by small enterprises at 10.25 percent (98,126) and medium enterprises at 0.49 percent (4,716). Given these numbers, it should be a no-brainer for government officials to see the need to formulate policies that would help typhoon-ravaged and pandemic-affected MSMES to enable them to recover. Helping them survive will also prevent widespread unemployment, and thus preserve household income.

Other countries know the importance of MSMES to their post-pandemic economic revival. That’s why they find ways to keep their MSMES solvent and minimize the economic costs of the pandemic. In Nigeria, for example, Mariam Katagum, Nigeria’s minister of state for industry, trade and investment, said her country is supporting MSMES through grants to address their financing needs. “Supporting entrepreneurs and small businesses by creating opportunities for MSMES to thrive is essential for increasing productivity, creating jobs and boosting our economy,” Katagum said.

The Philippines would do well to follow Nigeria’s way of supporting small entrepreneurs. Government must empower our MSMES to survive the economic downturn. We should take a whole-of-government approach that integrates the collaborative efforts of the departments and agencies of government

to provide effective solutions to nurture their growth.

There’s an urgent need for innovative policies and programs to help our MSMES survive and thrive. Enhancing the business environment for them amid the pandemic is the much-awaited tide that will surely lift all MSME boats in the country.