Wednesday, September 12, 2007 Group picks Cebu as pilot area to implement project for SMEs
ADVOCACY groups and private institutions in the country have chosen Cebu as pilot area in the Visayas to jumpstart the establishment of the Micro, Small and Medium Enterprise Indicator System (MSMEIS).
Universal Access for Competitiveness and Trade (U-Act) director general Ryan Evangelista said Cebu’s strong SME base make it an ideal venue for the pilot testing of the MSMEIS.
“Cebu is recognized as a furniture center and will be the benchmark for the indicator system in the Visayas soon in the IT (information technology) (sector),” Evangelista said.
MSMEIS is a monitoring indicator for micro, small and medium enterprises (MSMEs) in the business community. It is aims to collect timely, faster and more extensive information on industry performance, competitiveness, investment climate and business outlook.
Components of the regional database include company profile, description of the MSMEs’ production process and industry issues within the value chain, SMEs’ expectations, assessment of the market and government policies and institutions.
Linkages
In Luzon, the project was initially introduced in Cavite because of the province’s “well-built export industry,” Evangelista said.
Marissa Garcia, MSMEIS team leader said the database will establish a venue for underground economies or those paying no government taxes, on how to get information or linkages with financing institutions.
“If there is a lack of information, say financing, on the formal economies, how much more in the informal sector?” she asked during a press interview yesterday following the MSMEIS orientation and pilot test at The Parklane Hotel Cebu.
Ted Locson, Cebu Chamber of Commerce and Industry (CCCI) vice president for external affairs, said the project will help create a data for finance institutions like banks in determining which cooperatives will be provided the money as loanable amounts to “credit worthy” micro businesses.
“Some of these businesses might have good credit record in their cooperatives but the formal institutions don’t have a record. The project will help link the formal type of financing to other areas. It will trickle down to where money is really needed,” he said.
Garcia stressed the importance of the MSMEs in the country’s economic development.
Citing official records, she said MSMEs contribute to 99.7 percent or 808,631 of the 811,859 registered business establishments in the country.
The sector also accounts for 70 percent of total employment, as well as 24 percent of revenues obtained from the country’s total manufacturing exports.
“But there potential is not quite there,” Garcia said.
Factors that undermine the viability of the sector include: lack of access to credit and financing; low level of technology; limited market information; lack of a research and development program; lack of human research development program; and government policy directives.
MSMEIS is a project of the Partnership and Advocacy for Trade and Competitiveness, Angelo King Institute, Philippine Export Council, US Agency for International Development, U-Act and CCCI. (MMM)
