LOREN URGES STRENGTHENING SMALL AND MEDIUM INDUSTRIES

Senator Loren Legarda yesterday deplored that the small and medium enterprises (SMEs) in the Philippines are considered the least competitive in Asia, and outlined strategies for strengthening the sector.

In a speech to the 15th Metro Manila Business Conference at the Sofitel Philippine Plaza, Loren stressed that "given enough support, SMEs can be the real economic might of this country, stimulating private ownership and entrepreneurial skills, generating employment, diversifying economic activity and contributing significantly to exports and trade."

A 2007 study by the United Parcel Service or UPS Asia Business Monitor, however, according to Loren, revealed that SME leaders from the Philippines were the "most pessimistic" in the region, believing they were least competitive for the third straight year, compared with their counterparts from Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan and Thailand."

Fifty-eight percent of the SME respondents from the Philippines expressed lack of confidence in the Philippine SMEs competitiveness and 80 percent said that the factors contributing or hindering SME growth as lack of government support, as well as lack of access to fundng and working capital, the survey showed.

Loren said that economic growth must be accelerated in the Philippines where, according to the World Bank, one out of every five Filipinos live under extreme poverty with an income of less than five dollars a day.

According to her, Philippine SMEs can contribute more to the eocnomy by further bolstering "areas of cooperation" or partnership with various institutions, including Congress and other policy-makers in government.

Loren revealed that in the Senate she has introduced amendments to Republic Act No. 6977, otherwise known as the Magna Carta for Small Enterprises, by providing for more effective support services not only in the form of financial support, but also for training, information services and provision of more incentives.

She also called for the establishment of a "one-local-chamber of commerce and industry-per-geographic-area" principle, through which support services can be better channeled.

Loren also advised the SMEs also to strengthen their ties with other organizations, like the following:

The foreign chambers of business -- "Our local SMEs can benefit much from the business advisory services and technical assistance of international volunteer business experts through the facilitation of foreign chambers of commerce."

Financial institutions -- "Ready and available credit is a prerequisite to fostering a favorable climate for entrepreneurship among our people. A steady flow of credit is the lifeblood of small and medium industries."

International markets -- "To thrive or even survive in today's increasingly integrated global economy, our SMEs need to look beyond local markets and heed the challenge of global excellence by producing products and services that are world-class."

Educational institutions -- "Educational institutions are a hub for diverse information and the birthing ground for innovative ideas, both of which are essential in properly positioning SMEs at a competitive level in the global business arena."

She emphasized, "Through our partnerships and synergized efforts, our SMEs can graduate to higher levels of business, raise more and more people out of poverty, and lead nations and regions to abundance and economic prosperity."