Lopez tells APEC gov’ts: Make it easier for MSMEs

Published June 28, 2021, 2:49 PM

by Bernie Cahiles-Magkilat

Trade and Industry Secretary Ramon M. Lopez has called on governments of the 21-member states of APEC to prioritize and make it easy for micro, small and medium enterprises (MSMEs), the region’s engine of growth, transition into the digital way of doing business, especially during this pandemic.

“The bottomline in everything that we discussed here with all the support program, capacity program, access to market, financing: Make it easy for MSMEs. That is the bottomline in everything that we do, we just have to make it easy for MSMEs,” said Lopez during the panel discussion at the PEC MSME Global Forum 2021 attended by World Trade Organization Director General Dr. Ngozi Okonio-Iweala.

Other panelists at the forum include Minister Mary Ng of Canada, Vice Minister Rodrigo Yáñez of Chile, and Ambassador Jose Luis Cancela of Uruguay as Chairperson of the WTO Informal Working Group on MSMEs.

He said that while business resilience and continuity of MSMEs must be prepared, this must be supported with a lot of capacity building on the part of the government.

The DTI chief even called on governments to prioritize MSMEs over the “big guys” which are more prepared for crisis situations, although he also noted that no one was prepared for this pandemic.

To help capacitate MSMEs, Lopez also said that migrating to digitalization is not just the task for MSMEs but government as well so they can help this small businesses.

During this pandemic, MSMEs have to deal with various government agencies like getting permits, which is a problem even before the pandemic. This makes the role of government more important more than ever, he pointed out.

Aside from training and capacity building, the government must also ensure that markets are open.

During the pandemic, Lopez said that the Philippines brought down tariffs of very important commodities simply to facilitate more trade.

The government has also collaborated with various non-governmental organization and partnered with online platforms such as Google, Lazada and Shopee to assist small enterprises reach more markets overseas.

Congress recently passed the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which lowered the Corporate income tax rates from 30 percent to 25 percent, and even down to 20 percent for MSMEs.

Policies were also put in place to ensure that MSMEs have continued access to formal financing channels and measures were adopted to support domestic liquidity and extend cheaper financing to borrowers, especially MSMEs. Examples of these include: the MSME Credit Guarantee Program; and the Small Business Corporation’s (SBCorp.) loans to micro and small businesses affected by the pandemic under the COVID-19 Assistance to Restart Enterprises (or CARES) Program.

More importantly, Lopez said the Philippines continued to work on ease of doing business, and instituted policy reforms that facilitated trade and investments, particularly in essential commodities and critical medical products such as personal protective equipment and vaccines.

In stressing the important role played by government on the development of MSMEs, Lopez reported that DTI business registration leapfrogged in 2020 by more 40 times, indicting a high digital adoption among MSMEs.

In APEC, which comprises 21 economies, MSMEs account for 97 percent of all businesses and employ over half of the workforce. They contribute significantly to economic growth, with their share of GDP ranging from 40 percent to 60 percent in most APEC economies.

However, they only account for 35 percent or less of direct exports. “Therefore, we need to tap the potential that MSMEs hold and encourage their development to build their capacity to engage in international trade, whether as direct exporters or as part of regional and global value chains,” Lopez said.

While MSMEs have been a core agenda of APEC, Lopez said the unparalleled effects on businesses by the COVID-19 crisis calls for stronger measures among APEC economies to support, strengthen and foster an enabling environment for MSMEs.

“Through the appropriate policies and measures, we need to assist them amidst the pandemic and beyond,” he said.