The business sector is hopeful the new composition of the Philippine Congress will lead to growth acceleration for the country particularly in the areas of education, agriculture, foreign affairs and, most importantly, MSME development.
The head of the Philippine Exporters Confederation, Inc. (PHILEXPORT) president Sergio R. Ortiz-Luis Jr. in a live studio interview with Bilyonaryo News Channel said they believe “there will be improvements in the Upper House” with the entry of Bam Aquino, who can lift the sad state of Philippine education, and Francisco Pangilinan, who is expected to give agricultural development a boost.
Ortiz-Luis, also president of the Employers Confederation of the Philippines (ECOP), also sees incoming lawmakers Panfilo Lacson and Imee Marcos as positive additions to the Senate in terms of budget-making and foreign affairs, respectively.
He is particularly upbeat about the possibilities for micro, small, and medium enterprises (MSMEs), whose wellbeing and growth have been neglected for so long.
Ortiz-Luis in his May 19 interview lamented that MSMEs in the Philippines are the most “underbanked” in the Association of Southeast Asian Nations (ASEAN).
He estimated that in 2019, banks lent out US$11 billion to MSMEs in the Philippines compared to more than $190 billion loaned to MSMEs in Thailand during the same period.
In a report, Asian Development Bank study indicating that Philippine banks lent only $11.6 billion to MSMEs in 2019, the smallest MSME bank loan total for a country for that year among the ASEAN-5, comprised of Indonesia, Thailand, Malaysia, Philippines and Singapore.
“For 2019, the Philippines’s $11.6-billion MSME bank loan pales in comparison with Thailand’s $218.2 billion, Indonesia’s $79.9 billion, Malaysia’s $68.1 billion and Singapore’s $56.85 billion (as of end-June),” the news report said.
Ortiz-Luis said the scant loans and the neglect of Filipino MSMEs can be attributed to “a problem of budgeting,” with the promised commitment to help them being “just talks” or lip service.
The business sector’s wish is for the incoming Congress to institute legislative reforms that will put sufficient budget into MSME development amid ongoing initiatives to amend the Magna Carta for Micro, Small, and Medium Enterprises, the law that mandates the government to promote MSME development by providing various assistance, incentives, and support to small entrepreneurs.
The business executive said the budget allocated to MSME programs is negligible compared to the huge funding allotted for the Pantawid Pamilyang Pilipino Program, also known as the Conditional Cash Transfer program, a national poverty reduction strategy in the Philippines that provides conditional cash grants to poor households.
To illustrate, he said the budgets for the MSME development initiatives of concerned agencies such as the Department of Trade and Industry, Department of Science and Technology, and Department of Information and Communication Technology are too small to yield satisfactory results, yet “we expect so much from them [the agencies]” in terms of attracting investors to the country and improving MSME operating conditions.
Further, current calls for significant legislated wage hikes will not benefit MSMEs but can only be detrimental to them as they are just struggling to survive every day, and higher salaries will most likely lead to job cuts, price increases, or bankruptcy for most of these small-scale businesses, Ortiz-Luis said.
“We hope that they will really consider putting budgets there. There is no budget [for MSMEs],” Ortiz-Luis stressed.
