DTI chief to focus on boosting MSME sector

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EASE of doing business. Inclusive business. Wider market access.

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These are the three main areas that Ramon Lopez, the new secretary of the Department of Trade and Industry (DTI), will focus on in the next six years to help small businesses grow in line with the Duterte administration’s promise to focus on the little guys.

In his first 100 days as DTI chief, Lopez hopes to secure agreements needed to lay the groundwork that would support and develop the micro, small and medium enterprises (MSMEs) in the country, which comprise 99 percent of the country’s businesses.

After witnessing a signing event during the Employers’ Confederation of the Philippines (ECOP) annual meeting last week, the down-to-earth Lopez smiled as he was approached by reporters, ready to answer questions.

Lopez said he hopes to have “substantial progress” in these areas in his first 100 days and may come up with approvals “but the physical implementation needs time.”

“In the first 100 days, we will have concrete agreements. We are hopeful that that can be done,” the DTI chief said.

Ease of doing business
“Ease of doing business is one area that I will focus on. I would like to do a one-day complete processing so one can start a business already,” Lopez said in Filipino and English.

He said several local government units (LGUs) have already made one-day business registration possible and he intends to make it applicable in all other LGUs nationwide within the year.

“Yes, definitely it’s possible. Other cities were able to do it…We’re confident in this, given that it’s not just DTI, but together with the BIR group [Bureau of Internal Revenue], the LGUs, the mayors, and the DILG [Department of Interior and Local Government], because the President has the political will,” Lopez said.

“We challenge them [LGUs] that they will do improvements in their business environments, improve the systems, and make it more favorable — to do it not for the awards but for their people to attract investment,” he added.

Inclusive business
“Then second would be the push for inclusive business because [it]is one way to have MSMEs included in the value chain of the companies,” the DTI secretary said.

Inclusive business, Lopez explained, is the inclusion of MSMEs, small farmers and cooperatives in the business value chain so that they will have a constant market as suppliers of raw materials and services to the big companies.

He said big companies must be enticed to locate and invest in the rural or less developed areas through incentives in the Investment Priorities Plan (IPP).

“That will have to go through the process in the BOI [Board of Investments], with the board, and then to discuss how we can amend the inclusion of those less developed areas and disaster-stricken areas in the [IPP],” Lopez said. “We already have fiscal incentives in the BOI, so it’s really a continuing review in the areas in the IPP as industry areas.”

He said infrastructure is the key determinant whether or not big businesses will be attracted to invest in the regions.

“The big thing will be the infrastructures. Infrastructure has to be improved — ports and seaports, airports — all of it. Right now, that’s being discussed and given emphasis so they [businesses]are optimistic that those issues will be addressed. Maybe that’s not deliverable in one year because it’s infrastructure. It takes about a year or two so that we can attract investments in those areas,” he said.

The Duterte administration plans to ramp up infrastructure spending up to 7 percent of the country’s gross domestic product (GDP) this year, which is significantly higher than the 5 percent infra spending target of former President Benigno Aquino 3rd’s administration.

It was earlier reported that for 2015, the government spent only P436 billion on infrastructure projects, equivalent to just 3.3 percent of GDP, which was lower than the 4 percent infra spending goal for the year.

Market access
Lopez said he will also lobby for the exposure of MSME products in mainstream markets or malls. He said DTI will put up stalls in the “high foot-traffic areas” in malls that would feature MSME products that can compete with local and international brands.

“So far, we are getting favorable response from the malls. So far, the Robinsons Group and SM Group, they are okay with it, but we have to present the concept first. We’re working on this since July 1. There would be some advance agreements maybe in the first 100 days,” Lopez said.

“We will also have a screening process on products that deserve to be in those areas, which will take maybe a good specific of months. It could be two months or three months. After that, they graduate, and they either rent a place of their own and then we allow the next batch,” the DTI chief said.

“It’s a continuing process. Market access is very important,” he added.

The DTI will be intensive in its promotion campaigns across the country.

“Exports will be there of course, but you have to maximize potentials. While exports are on a slowdown, it’s natural for businesses to scout for locations where they can sell their products, and you still have a hundred-million market here that you can attract,” Lopez said.

Lopez will also continue the programs and initiatives of the previous government such as maximizing current free trade agreements, market education, and facilities and equipment provisions for MSMEs, among others.

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