BUSINESS MANAGEMENT & APPLICATION FOR ARCHITECTURE 2
MSMEs
MICRO, SMALL AND MEDIUM
ENTERPRISES
Presented by Erica Cortero
Sophie Philippa Day
According to RA No. 9501
MSMEs
Micro, Small and Medium Enterprises
Any "business activity or enterprise engaged in
industry, agribusiness and/or services, whether
single proprietorship, cooperative, partnership
or corporation'' whose total assets, inclusive of
those arising from loans but exclusive of the
"land on which the particular business entity’s
office, plant and equipment are situated''.
Micro, Small and Medium Enterprises
Laws, Policies and Incentives for MSMEs in PH
RA No. 9501
The Magna Carta for Micro, Small
and Medium Enterprises
amends RA 6977,
the Magna Carta for Small Medium Enterprises
A law to promote, support, strengthen and
encourage the growth and development of MSMEs
in partnerships with the private sector.
MSMEs
Micro, Small and Medium Enterprises
Criteria for classifying MSMEs in PH
CATEGORIES ASSETS NO. OF EMPLOYEES
Less than 3 million
Micro-enterprise 1-9
pesos
3 million to 15
Small Enterprise 10-99
million pesos
Medium
More than 15 million
100-199
Enterprise to 100 million pesos
Micro, Small and Medium Enterprises
RA No. 9501
SEC. 15. Mandatory Allocation of
Credit Resources to Micro, Small
and Medium Enterprises
Government and private banks are
mandated to increase their loan
portfolio from 6% to 8% for micro and
small, and maintain the 2% allocation
for medium-sized companies. The
penalty for non-compliance is not
below 500,000 pesos.
To avail this financial assistance, these enterprises must be registered first with
appropriate government agencies (DTI, SEC, CDA, LGUs).
Micro, Small and Medium Enterprises
Important contribution of MSMEs
Dispersing new industries to the countryside and
stimulating gainful employment.
Seedbed for the development of entrepreneurial skills and
innovation.
Assimilating new design trends, developing contemporary
products, and bringing them to the marketplace.
Skillful in maximizing the use of scarce capital resources.
Micro, Small and Medium Enterprises
Qualitative indicators contrasting
MSMEs and large companies
CATEGORIES MSMEs Large Companies
Proprietor-entrepreneurship Manager-entrepreneurship
Management
Functions linked to personalities Division of labour by subject matters
Lack of University graduates The dominance of university graduates
Personnel
All-round knowledge Specialization
Organization Highly personalized contacts Highly formalized communication
Competitive position not
Sales Strong competitive position
defined and uncertain
SOURCE: UNIDO (UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Micro, Small and Medium Enterprises
Qualitative indicators contrasting
MSMEs and large companies
CATEGORIES MSMEs Large Companies
Buyer's relationship Unstable Based on long-term contracts
Production Labor intensive Capital intensive, economies of scale
Research
Following the market, intuitive
Institutionalized
Development approach
Role of family funds, self-
Diversified ownership structure, access to
Finance
financing anonymous capital market
SOURCE: UNIDO (UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Micro, Small and Medium Enterprises
Barriers to MSMEs Growth and
Development
Non-financial
barriers
Poor business environment/high cost
Low productivity and efficiency
of doing business Dealing with climate change and
Lack of access to market other risks and undertaking business
Lack of awareness on national and
recovery
international standards
Micro, Small and Medium Enterprises
Barriers to MSMEs Growth and
Development
Financial barrier
Lack of financial access
Challenges
insufficient collateral, limited credit histories
and banking relationships
inadequate financial records and business plans
high interest rates
Micro, Small and Medium Enterprises
Go Negosyo Act
Promotes “ease of doing business and
facilitate access to services for
MSMEs” through the Negosyo Centers
Establishment of Negosyo Centers
Establishment of A Start-Up Fund
for MSMEs
Unified and simplified business
registration
Reconstitution of MSMED Council
Micro, Small and Medium Enterprises
Access of Small Enterprises to Sound Lending
Opportunities (ASENSO) Program
Dubbed as a
GFIs extend loans to
government’s flagship
MSMEs providing them
program for the micro,
with manageable terms
small and medium
to help them expand and
enterprise sector grow their businesses
Micro, Small and Medium Enterprises
Pondo sa Pagbabago at Pag-asenso (P3) Program
P3 Program provides microenterprises an
alternative source of financing that is
easy to access and made available at a
reasonable cost.
Primary beneficiaries of the P3 Program:
Microenterprises and entrepreneurs
Loan amounts to end-borrowers will be in the range of P5,000 to
P100,000, at a maximum interest rate of 2.5% per month,
with no collateral requirement.
Micro, Small and Medium Enterprises
Percentages of SMEs in the Philippines
2021 MSME Statistics
2021 MSME Statistics
Top 5 Industry Sectors
Wholesale and Retail Trade; Repair of Motor
Vehicles and Motorcycles (539,006)
Accommodation and Food Service Activities
(151,748)
Manufacturing (130,573)
Other Service Activities (69,254)
Personal services for wellness, except spas, repair of
personal & household goods etc.
Financial and Insurance Activities (50,089)
2021 MSME Statistics
Geographical Spread
2021 MSME Statistics
Employment
The micro enterprises produced the
biggest share (32.46%) closely followed
by small enterprises (25.08%) while
medium enterprises were far behind at
7.12%.
2021 MSME Statistics
Sales and Census Value-Added
the MSME sector contributed 35.7% of the
total with manufacturing contributing
the largest share of 6.87%. Wholesale and
retail trade and repair contributed 6.58%
followed by financial intermediation with
a share of 6%.
2021 MSME Statistics
Exports Contribution
MSMEs account for 25% of the country's total exports
revenue.
60% of all exporters in the country estimated belong to
the MSME category.
subcontracting arrangement with large companies , or
suppliers to exporting companies
Deficiencies in the present
system of SME statistics
Deficiencies
TIMELINESS
Statistics on the census of establishments is done every 5 years & annual
survey establishments are usually released 15-24 months after the year.
CROSS COMPATIBILITY WITH OTHER COUNTRIES FOR CROSS COUNTRY
COMPARISONS
Major classification used by most countries to define SMEs is through
assets and employment size. However classification differ since developed
countries have large industries than less developed ones.
INADEQUATENESS
Limited data's are usually not available for policy makers and business.
Deficiencies in the present
system of SME statistics
Deficiencies
AVAILABILITY
Confidentiality clauses in census for firm level data that can't be accessed
by the pubic.
COVERAGE
Philippines has a large section of small business, refer to small scale units
that produce and distribute goods and services without the benefit of the official
sanction or control.
BUSINESS MANAGEMENT & APPLICATION FOR ARCHITECTURE 2
Thank you!
Presented by Erica Cortero
Sophie Philippa Day
