Micro, Small, and Medium Enterprises (MSMEs), which account for 99% of business establishments and employ 60% of its workforce based on the 2020 report of the Philippine Statistics Authority, are hard-hit by the COVID-19 pandemic and related economic downturn.
For the past two years, the disruption in supply chains and reduction in consumption due to imposed quarantine measures and decreased consumer confidence have so far caused massive shutdowns, layoffs, defaults, and insolvencies among MSMEs.
In terms of assistance needed by MSMEs, it is noted that across all industries, majority of them require financing assistance the most. Other assistance needed include marketing assistance, complying with government regulations, and enabling policies on regulations providing improvements on administration and provision of taxes, discounts and incentives as well as assistance on rentals and utilities, among others.
“We are confident that by giving MSMEs the needed entrepreneurial and financial skills to operate their own businesses, they will contribute to economic activities that is crucial to revive our economy from the negative effects of COVID-19 pandemic. And as our MSMEs grow and flourish, they will create more jobs and employment that will benefit our people and boost our country’s economic growth in the post-pandemic future,” said Department of Trade and Industry (DTI) Regional Operations Group Undersecretary Blesila Lantayona.
Recognizing the need for a heightened focus on financial literacy and digital transformation of MSMEs especially highlighted when COVID-19 entered the country in 2020, the DTI has partnered with private sector to further boost growth opportunities for MSMEs by expanding their knowledge and upscaling their digital capabilities to improve their business operations.
The DTI and Mastercard entered a Memorandum of Understanding (MoU) to spearhead initiatives that will enable MSMEs to embark on a digital transformation of their business. This includes providing MSMEs with access to safe, reliable and affordable technology solutions to digitize their operations, and enable digital commerce – both accepting and making payments. These initiatives, beyond enabling MSMEs to future-proof their business, also complements the the government’s objective of building a cash-lite society.
“Mastercard is committed to building an inclusive digital economy in the Philippines where all stakeholders can realize their ambitions. Through the partnership with DTI, Mastercard is helping small businesses open their digital doors with access to resources and technology solutions,” said Mastercard Country Manager for the Philippines Mr. Simon Calasanz.
Mastercard is a global technology company in the payments industry with the mission to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, their innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential.
The DTI has also partnered with fintech companies to promote alternative options for financing MSMEs such as Investree and First Circle Inc. Investree Philippines is the country’s first recipient of permanent crowdfunding license from the Securities and Exchange Commission offering
supply chain financing solutions to growing SMEs since 2020. To date, it has supported 100+ SMEs and has funded over 400+ notes. Its significant existence in the nation’s economic recovery will be heightened with its expansion nationwide.
“Investree Philippines is focused on building the future, a future where financial tools are more available to SMEs in order to sustain and expand their businesses. Through our partnership with DTI, we seek to keep pursuing this vision of the future. We are even more excited since this collaboration will enable more new opportunities and milestones for Filipino SMEs, which ultimately helps boost the country’s economy in the long run.” shares Investree Philippines Country Manager Alexander Capulong.
First Circle, a FinTech company, to provide MSMEs access to financial services as well as offer financial literacy. First Circle has also agreed to supply Negosyo Centers with financial-related information and materials, create financial-related digital content that DTI can use, and share their expertise in DTI-initiated events and activities.
Furthermore, DTI has jointly developed with the Philippine Institute of Certified Public Accountants (PICPA) and the Polytechnic University of the Philippines (PUP) a webinar to teach accounting for non-accountants.
With the need for a conducive enabling environment for MSMEs becomes more pressing in the wake of pandemic, the DTI has affirmed its commitment to building a well-supported and engaged space for MSMEs through strategic partnerships with private sector who are equally committed to building a future-proof economy for Pinoy entrepreneurs.
Partnerships with various organizations are also underway to support the digitalization of MSMEs and are posted in the DTI’s Techtools for MSMEs (https://www.dti.gov.ph/covid19/tech-tools) , a resource site of online tools designed to provide information to MSMEs on the different technology tools, applications, platforms, ICT solutions available in coping with the challenges and disruptions of the ongoing COVID-19 pandemic and in support of DTI’s efforts of helping MSMEs embrace the digital economy. Partners, ICT providers and enablers which wish to join in transforming MSMEs through digitalization and be part of this microsite/resource hub, may contact the Bureau of SME Development for collaboration/enlistment. END