HEARD IT THROUGH THE GRIPE-VINE: OUR NEW ABNORMAL
The Filipino Small and Medium Enterprises (SME) success story is a powerful dream - something millions of Filipinos aspire for; and it’s easy to understand why. It speaks of being your own boss, of controlling your financial fate and security, and bestowing something tangible and sustaining to your spouse and children as legacy. When I speak of millions of Filipinos, that’s no exaggeration.
The 2022 list of establishments of the Philippine Statistics Authority recorded a total of 1,109,684 business enterprises operating in the country; and of these, 1,105,143 (99.59 percent) are MSMEs, and only 4,541 (0.41 percent) are large enterprises. These MSME’s are considered the backbone of our economy - providing 63 percent of employment to the Philippine workforce; and where there is an imbalance, is that they’re contributing only 40 percent to the country’s Gross Domestic Product.
In the Philippine scenario, classified as small businesses are those with assets of ₱15 million and below, and with 50 employees or less. Medium enterprises are ₱15-100 million in assets, with employees ranging from 100 to 199. Companies with assets of over P100 million and employees north of 200 are classified as large. It’s interesting to note that the top industry sectors where we would find MSMEs in 2022 were the wholesale and retail trade, including repair of motor vehicles and motorcycles, accommodation and food service activities, manufacturing, and financial and insurance activities.
You look at those industry sectors and you’ll appreciate how crowded they are – that good ideas and determination aren’t enough to propel MSMEs to success. And for SMEs, more crucial is how initial success doesn’t necessarily mean one is ready to bring the business to the next level. That’s when banking institutions can offer a vital helping hand. I especially like what BDO, and their Cash Management Services (CMS) have, in their suite of offerings, to propel SMEs to be more efficient and effective.
The right start-up idea, a strong entrepreneurial spirit, the creative marketing strategies; at some point in a SMEs lifetime, to make the enterprise grow, those aspects have to be coupled with business acumen, with administrative and financial foresight.
Grace Caguioa, FVP and unit head for BDO-CMS for the SME segment, has ensured that her team members are adept at offering solutions to the SMEs, “It’s about having the right service accessible to the SMEs, and guiding the business owners on how these tools can improve their day-to-day operations. Most entrepreneurs do not quantify their time as a valuable resource; so this is where we come in. BDO has CMS SME packages designed to make payments easier, and receipts of payments faster so they can focus more on growing their business.”
With CMS, the bank can play an active role in ensuring efficient cash flow; advising and setting up systems that impact the funding of business operations - these could start with payroll, and extend to how to leverage on BDOs footprint for collections, and plowed back to the company to create liquidity and growth. As a CMS client, the SME can take advantage of the growing BDO network of clients, bringing supplier and vendors together, matching distributors, and putting the BDO community supply chain to work.
SME Forums and BDO Fiestas are two vehicles by which CMS goes face to face with its potential clients, and forges strong relationships. There’s an Usapang Negosyo Forum in Vigan, Ilocos Sur on July 25, and they travel on to Laoag, Ilocos Norte on July 30. The forums are exclusive invite-only events dedicated to help SMEs grow their business, and optimize cash flow.
The BDO Fiestas are bigger affairs, with not just CMS, but with other BDO services present - such as Retail Loans, Life and Non-Life Insurance, Remittance, and so on. During the Fiestas, there’s entertainment, promos, fun games, and special offers. The Vigan Convention Center on July 27, and the Laoag Centennial Hall on August 3, are the next sites for the rollout of these BDO Fiestas.
When BDO-CMS speaks, it does so with a wealth of experience, and deep understanding of SMEs. SMIC Vice-Chairperson and BDO Unibank Chairperson Tessie Sy-Coson likes to say that she remembers when SM was itself a start-up business, and how her parents always reminded her and her siblings never to forget where they came from, lower middle-class roots. At an Anvil Business Club fireside chat in May 2024, she reiterated their humble origins, and the vision of her father, SM Founder Henry Sy, Sr. - and how the SM story is one of the ultimate SME success stories.
With BDO-CMS, it’s service with intent, with practical ‘solutions’ acting as the trigger for why BDO-CMS can be the invaluable boost your SME requires. It’s about BDO coming to the plate, playing its role in strengthening the economic backbone of our nation, and recognizing the role SMEs play in national development.