MSME Agenda is for Empowerment
Empowering the MSMEs is the way to go. To become the real driver of the economy, micro, small, and medium enterprises (MSMEs) should recover fast to rebound and move forward in these trying times. The Pandemic has caused chronic disruptions in local businesses and people’s lives. Poverty continued to worsen. Now is the best time to shift the government paradigm and center more on the people’s needs, like food and jobs. By giving more assistance to the MSMEs, the government will be shooting two birds with one stone – inducing productivity and boosting employment. MSMEs employ 60%-70% of the country’s labor force and have the power to create more jobs than big companies can generate!
MSMEs are the majority of the country’s food producers and consumers. They come from farmers, workers, office employees, teachers, and professionals who take on extra sideline jobs, “raket” or “side hustles” to pay for loans and make up for severely low income. By empowering the MSMEs, we help empower the people. By responding to the needs and concerns of the MSMEs, we are, in effect, responding to the basic needs of the masses of our people. Development plans for the MSMEs should therefore focus on the people’s needs.
The MSMEs want what the majority of the people want. Both want to reduce the cost of living and production in the business. They want lower electricity and utility rates, fewer imports so that local production can grow, more infrastructure support like processing and storage facilities, more credit facilities that they can access easily, and an end to oppressive taxes. They want more affordable transportation. And, of course, to eat three square meals a day with children not missing school if the nation expects them to become future leaders.
On behalf of the MSMEs, the Department of Trade and Industry (DTI)-V, with Tabang Bikol Movement, will gather 300 of some 62,000 DTI-registered MSMEs from six regional provinces in a whole-day Bicol MSME Summit at downtown Marison Hotel, Legazpi City on Friday, October 21. This number does not include thousands of other enterprises in far-flung areas and the unregistered. DTI Secretary Alfredo E. Pascual is the keynote speaker.
For TBM, a disaster response humanitarian non-profit organization, the plight of the MSMEs is a disaster in the making - bereft of decisive interventions to address the MSMEs’ concerns and problems. The Summit seeks to articulate and find solutions to these problems that hamper their growth and potential as economic warriors who can step up economic recovery and play a role in national industrialization and social development.
The problems of the MSMEs and their shared aspirations are ours too. “Sakit ng kalingkingan, sakit ng buong katawan,” is an old adage that can very well undergird the interlocking relationship. When prices soar, the MSMEs and, most significantly, the women and children in the families are hurt the most. When MSMEs shut down at the height of the Pandemic, millions lost their jobs, and more families went hungry.
The United Nations 2030 Agenda sees eradicating poverty in all its forms and dimensions, including extreme poverty, as the most significant global challenge and an indispensable requirement for sustainable development. MSMEs have a vital role in achieving the Sustainable Development Goals, especially providing “decent work, economic growth, industry, innovation, and infrastructure.”
The MSMEs’ Woes
The DTI says 99.5% of businesses in the country are MSMEs. Of this number, the micro-enterprises are 88.77%; small enterprises, 10.25%; and medium enterprises, 0.49%. They are practically the local economy’s lifeblood and the backbone of society. On the other hand, most of the population occupy the lowest section of the economic spectrum and operate micro-businesses like makeshift sari-sari stores, barber/dress and repair shops, ukay-ukay, and carinderia at every street corner of the barangay.
Why do MSMEs in the country remain backward, and are the micro players seen as dregs of society? Has there been a change in three decades of the Magna Carta for MSMEs and with more than 1000 Negosyo Centers nationwide? Generous DTI loans are available, all code-named “RISE UP.” How have these benefited the MSMEs? Some applicants report that application processing and disbursement can take months, but loans help tide them over the next production cycle once approved. It’s a break even, or often, make or break.
Most MSMEs complain of a lack of funds or slow access to financial assistance. They need help from science and technology experts to produce more quality goods and gain more markets in a highly competitive environment marked by cheaper imports and constraints like E-VAT and excise tax. It should be noted that most micro-entrepreneurs finish only grade school and lack the facility to innovate aside from using antiquated tools. Their level of awareness, knowledge, and experience pull them backward. Most have to deal with 5-6 money lenders and operate underground, out of sight of the BIR or DTI inspectors.
Empowerment is people-centered. It begins with the right to access government resources freely and with ease. Empowered MSMEs operate under enabling conditions. They become effective drivers in the local economy and society in a digital ecosystem. Presently, most MSMEs that the government happily calls the economy’s main drivers are riding on dilapidated trucks on bumpy roads that seem to go nowhere but down the slide.
How can the driver bring the vehicle safely and securely to the road to progress and prosperity? First, the driver needs to be skillful and healthy to be able to navigate with success.
I venture three ways to achieve that. First, make the Magna Carta for MSMEs more responsive by being more participative on the ground. Set up MSME Development Councils (MSMEDC) at the local level - regional and provincial, as the independent policy-making body for local MSMEs to promote the viability and growth of MSMEs through collaboration and sound agriculture-industry integration. Aside from the Departments of Agriculture, Tourism, Science and Technology, and the Interior and Local Government, the role of the academe and professional non-profits cannot be over-emphasized.
Second, improve access to government financing, and institutionalize existing money-lending schemes that people run for daily operational survival. Isn’t this the most practical way to resolve the lack of funding, even for a day?
Lastly, reduce production costs by, for instance, removing the E-VAT, rampant corruption among government agencies, and popularizing and providing renewable energy subsidies, especially to micro and small start-ups.