EDITORIAL: How, and Who Will Capacitate The Poor Informal Sector
Our enterprise sector is called officially as the MSMEs, or micro, small and medium enterprises. They are categorized based on two criteria: employment and asset size. In the area of employment, an enterprise is considered small if it has 10-99 employees, medium with 100-199 employees. They belong to the large enterprise if they have 200 or more employees. On the other hand, an enterprise is categorized as MICRO IF IT HAS LESS THAN 10 EMPLOYEES, AND UP TO P3 MILLION IN ASSETS, INCLUDING EVEN THOSE WITH ONLY P100.00 IN CAPITALIZATION.
Our policymakers’ focus on MSMEs to be the engine for post-pandemic rehabilitation sounds rational considering that MSMEs comprise 99% of our registered enterprises. However, the policy is flawed because it fails to consider and reconcile with our poverty data profile. The Philippine Statistics Authority (PSA) reports that 87% of MSMEs belong to the Micro Enterprise category.
In 2021 the same agency reported a 23.7% poverty incidence among our basic sectors. Actually, this sector are those engaged in almost hand-to-mouth livelihood: small farmers and fishermen, backyard animal raisers, sidewalk shops, food stalls, grocery stores, ambulant vendors, and related income-generating projects.
Under the government classification they belong to the micro-enterprises group, and therefore appears to be included in government assistance policy in terms of technical and financial assistance. The reality, however, most of them are incapable of hurdling the bureaucratic system and requirements of government implementing agencies.
Our rural folks must be economically literate, they must learn practical and working knowledge of the rural economy. There must be an appropriate system and structure of service delivery specifically designed for them so they can conveniently participate and benefit from government assistance program. They must be taught how to diversity or convert their customary livelihood into profit and growth-oriented business. We must help to organize self-sustaining local market systems and prevent destructive neighbourhood competition. Value and supply chain concepts must be localized. But the big question is how to do it, who will do the capacity enhancement training of this marginalized sector, and who will deseing the needed service delivery system that can live within the government bureaucracy?
If we want to rebound and rebound better, we must minimize the gaps between the formal and the informal sectors, between the SMEs and the Microenterprise operators, and between the subsistence livelihood activities of the marginalized groups. If our bureaucracy cannot do this perhaps private training and development institutions can. It is the only and best option to move forward.