DTI: MSMEs are backbone of Philippine economy

By Rhaydz B. Barcia

MICRO, Small, and Medium Enterprises (MSMEs) are the backbone of the Philippine economy, contributing significantly to employment and economic growth, according to Department of Trade and Industry (DTI) Assistant Secretary Leonila Baluyot.

Speaking at the two-day Bicol MSME Conference 2025 held July 10–11 at the Marrison Hotel in Legazpi City, Baluyot said MSMEs account for 99.63 percent of the 1,246,373 registered business establishments in the country. Of this, 1,241,733 are MSMEs while only 4,640 are large enterprises.

“MSMEs contribute 65.1 percent or 6,351,466 jobs, and 45.49 percent to our gross domestic product (GDP),” Baluyot said, stressing their vital role in national development. “Let us continue to be catalysts for growth.”

In the Bicol Region alone, there are 50,687 MSMEs, broken down into 46,921 micro, 3,652 small, and 114 medium enterprises. These generate at least 226,455 jobs in the region.

More than 200 entrepreneurs, innovators, and industry leaders across Bicol participated in the regional conference themed “Asenso Negosyo, Angat Kabuhayan: Bagong Pilipinas.” The event was organized by the DTI to strengthen MSMEs’ role in local and national development.

To enhance their competitiveness locally and globally, Baluyot urged MSMEs to embrace innovation and digitalization to meet evolving consumer demands. She said DTI continues to support the sector through mentoring, digital transformation, financing, franchising, product diversification, and adaptation of artificial intelligence.

“The Philippine franchise sector plays a key role in driving innovation. MSMEs must adopt both product and marketing innovations as the government pushes to create more jobs and reduce poverty. We aim for resilience and inclusivity to strengthen businesses, especially amid climate change,” she said.

Baluyot added that President Ferdinand Marcos Jr. is expected to soon sign the “Malikhain Pinoy” bill to further promote creative entrepreneurship in the country.

Despite their vital role, Baluyot acknowledged that budget constraints remain a key barrier to business expansion. However, she assured that the DTI is working closely with local government units (LGUs) to address these challenges.

DTI Bicol Regional Director Dindo Nabol, meanwhile, highlighted the persistent supply chain issues faced by MSMEs—particularly the limited availability of raw materials such as pili and abaca, which have become more expensive due to growing demand and climate-related disruptions.

Nabol cited that the Department of Agriculture in Bicol had planted millions of pili trees, but supply remains insufficient to meet market needs. Pili is now being sold at P1,500 per kilo, prompting concerns among local processors.

Abaca producers face a similar challenge. Despite Catanduanes being the abaca capital of the Philippines, it continues to struggle with meeting demand following repeated typhoons that damaged plantations.

To ensure continuous production, Nabol said DTI is coordinating with the Department of Agriculture, other government agencies, and stakeholders to stockpile raw materials during peak harvest seasons. This strategy aims to address shortages during lean months.

“Our competitors, including China, have consistent supply. We are urging local farmers and producers to double their production during peak seasons to ensure we remain competitive,” Nabol said.

He also emphasized the importance of climate resilience. “We are helping MSMEs prepare for pre-disaster, post-disaster, and recovery phases to mitigate climate-related risks. DTI has partnered with SM City Legazpi and local MSMEs for business continuity planning.”

To further support MSMEs, the DTI has established 91 Negosyo Centers across the Bicol Region, providing access to business registration, financing, and mentorship services.

The conference also showcased the achievements of Bicolano MSMEs, who continue to thrive and excel despite the challenges.

FIRST IN BICOL. DTI Assistant Secretary Leads Groundbreaking of P50-M Bicol Trade Center DTI Assistant Secretary Leonila Baluyot led the groundbreaking ceremony for the P50-million Bicol Trade Center, a project funded by the Ako Bicol Partylist. She is joined by DTI Bicol Regional Director Dindo Nabol, Legazpi City Mayor Hisham Ismail, and Ako Bicol Partylist Representative Annie Sumanga. The Bicol Trade Center, the first of its kind in the region, will serve as a year-round venue for showcasing local products by Bicolano MSMEs and producers.