During the President’s recent state visit in Indonesia, the host country showed how those in the micro, small, and medium enterprises (MSMEs) are being assisted by the national government. A mall exclusive for MSMEs was what impressed the President pushing him to promise he will replicate it in the Philippines.
At a time when businesses, especially MSMEs are recovering from the impacts of the pandemic while also struggling to recover amidst inflation, unabated smuggling, rising fuel prices, and a weak peso, government intervention to prop up this sector of the business community is badly needed.
But the proposition to build a mall exclusive for MSMEs is not the answer to issues besetting the MSMEs sector – which comprises majority of businesses in the country.
Throughout the years, the Department of Trade and Industry, the Department of Science and Technology, local government units, even the Department of Agriculture, and the private sector have continuing projects assisting MSMEs in a bid to not only to upgrade their products and services, but also to help them penetrate bigger markets – here or overseas.
A robust business sector after all, helps keep the economy of any nation afloat.
If the President is bent on helping MSMEs, why not strengthen and expand the assistance given to MSMEs, instead?
For instance, increase government loans that MSMEs can avail of, extend the period of payment and be flexible with loan terms, and strengthen the One Town, One Product program.
While the President’s intent of putting up one big venue is to accommodate MSMEs, this might actually run counter to the essence of why small-scale businesses exist – to give consumers options to have quality products that are affordable at the same time give maximum profit to the actual producers of goods and services.
We all know that prices of products sold in malls, even if made by MSMEs is way higher due to overhead costs.
It is also unclear how the President will go about implementing his plan. Will the mall be government-owned, or will it be through public-private partnership? If it is government that will shoulder the cost, will the rent it will collect from MSMEs be enough to recoup the amount that taxpayers paid to build the structure? If it will be done via PPP, what will be the terms of the contract? Any businessman worth his salt would surely come up with rates that will guarantee return of investment at the shortest time possible.
Feasibility of the President’s plan needs to be studied carefully. For now, let the private sector do its share in helping MSMEs.
If there is one venue where MSMEs can thrive and where they can operate on a regular basis, it is our public markets – a melting pot and a venue accessible to all. With more financial autonomy given to LGUs, the President should rally local chief executives to improve their local business plans focusing on improving the business climate in the localities.
At the same time, the President and his trade and economic mana-gers should also act swiftly on issues regarding the country’s dependence on imported raw materials that many MSMEs use in making their products.
Being highly dependent on imports makes operation costs higher thereby affecting an already struggling MSME sector.
As the backbone even of the biggest economies in the world, MSMEs do not deserve to be relegated to the backburner for without them, conglomerates, many of whom, also started as small players, will surely collapse.