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Current Situation of SMEs and the SME Development Plan

Current Situation of SMEs and the SME Development Plan. 24 May 2004. SMEs make up 99.6% of all companies. 0.4 % Large. 0.4 % Medium. Source: NSO 2001. 7.6 % Small. 99.6 % SME. 91.6 % Micro. SMEs contribute 32% to total GDP. 0.4 %. 99.6%. 68%. 32%. Firms. Value-Added.

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Current Situation of SMEs and the SME Development Plan

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  1. Current Situation of SMEs and the SME Development Plan 24 May 2004

  2. SMEs make up 99.6% of all companies. 0.4 % Large 0.4 % Medium Source: NSO 2001 7.6 % Small 99.6 % SME 91.6 % Micro

  3. SMEs contribute 32% to total GDP. 0.4 % 99.6% 68% 32% Firms Value-Added Source: NSO 2001 Source: NSO 2000

  4. SMEs generate 70% of all employment. 0.4 % 99.6% 30% 70% Firms Employment Source: NSO 2001 Source: NSO 2001

  5. They contribute 70% of jobs but only 32% of value. Employment Source: NSO 2001 68% 30% 0.4% 70% 99.6% 32% Value-Added Source: NSO 2000 Source: NSO 2001

  6. RP SME productivity is low compared to other Asian countries. Source: JICA & various sources

  7. SMEs SMEs We have been trying to push the economy from the top.

  8. SMEs But to move the economy faster, we also need to push from the base.

  9. Thus, the National SME Agenda. • P/GMA made SME Development a priority in her ‘8-Point Program’ and DTI was tasked as lead agency • DTI formed SME Core Group to include relevant bureaus/agencies

  10. A comprehensive & integrated approach is needed. Finance SME Forums SB Corp. SME Training Advocacy Marketing SME Caravans BSMED PTTC BDT Product Devt/ Technology SME Centers PDDCP/DOST ROG

  11. Accomplishments in 2003 • SULONG program (Finance) • P26.76 B to 281,229 SMEs • SME Opportunities Caravans • 31 Caravans reaching 2,875 beneficiaries • Business Counselors in 25 priority SME Centers • 60 DTI Business Counselors (BCs) • 120+ Volunteer BCs: MAP, FINEX, PICPA • Training Compendium

  12. Accomplishments in 2003 (cont’d) • SME Database • Promoted products in domestic & foreign markets • Product development services • Assisted 2,169 SMEs on product design and packaging • Directory of common services facilities • BMBE Law (RA 9178)

  13. Example: Arlyn’s Handicrafts • Ifugao Province • Design, Marketing, Finance • Assisted by Design Center of the Philippines • Joined National Trade Fair • SB Corp. approved P 2 M loan • Labor force doubled from 35 to 60 • For 7 months Source: NSO 2002

  14. Example: Tito Mike’s Food Company, Inc. • Michael Cases • Cases was a project engineer in Brunei • Started 1999, Dipolog City • MSG-free Sardines in Glass Jars • Production increase of 1400% with only 150% increase in labor over 4 years • HACCP, US-FDA, & BFAD certified • Showcase for hygiene and cleanliness Source: NSO 2002

  15. Vision of LT SME Development National Vision To create globally competitive SMEs in the new industrial economic environment. Built-up distinctive competencies Excellently managed enterprises Served by pool of professional partners Harness efficient technologies Establish relationship partners

  16. Increased EXPORT GROWTH of at least 16% Increased PRODUCTION OUTPUT and sales INCREASED PRODUCTIVITY between 32% to 40% GVA by year 2010; or 8.3% increase per annum NEW CREATIVE ENTREPRENEURS; progressive micro enterprises STRATEGIC DEVELOPMENT GOALS Strategic Development Goals • To increase the contribution of SMEs as a primary engine of growth • To spur the Philippine SMEs to be at par or better than the performance level of comparable Asian enterprises in terms of value added, employment, number of establishments, and export volume

  17. LT Plan to institutionalize SME Development • A strategic development plan (2004 – 2010) • Builds on the gains of the National SME Agenda • Intensified program • 3-year roll-out period • Evaluation process • Re-programming process after 2.5 years • 8 Strategies over a 3-pronged approach • Enterprise level • Sector level • Broad-based level

  18. Enterprise-level Strategies • Provide comprehensive & focused support to enhance managerial & technological capability • Provide business opportunities for development of new ideas that shall promote diversification of the industrial structure

  19. Sector-level Strategies • Promote sustained operations thru directed sector services • Develop & promote services that will support industrial linkages between local SMEs and leading industries

  20. Broad-based Level Strategies • Improve access of SME to financing • Promote an enabling business environment • Improve implementation of SME policies and regulations • Improve access to programs and capacity-building for institutions

  21. 2004 Priority Programs • SULONG Target: P26.7B • SMED Week 2004 • Formal launch of SME Long Term Development Plan • JICA.NET Seminar • Raw material showcase • SME Expo • BMBE Advocacy • Starter Kit / Supplier Kit • Enhanced SME Database • Source book for food manufacturers • VBC Program

  22. For more information: www.dti.gov.ph e-mail: sme-pmo@sbgfc.org.ph tel: 830.0285 / 810.5791 local 261

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