B.E. Assessment

Policy Review and Tools, GTZ SMEDSEP Philippines, 2004-

    On the right hand side you will find a review of the existing laws and policies affecting micro, small and medium enterprises in the Philippines. MSMEs are singled out for study because 99.7% of all firms in the Philippines belong to the MSME sector and because an inappropriate enabling environment affects MSMEs more than large enterprises. The study includes an analysis of the intent/content of national laws and local ordinances that affect the different areas of activity of MSMEs as well as the effects of these laws and regulations on MSMEs.

    Also to the right is a description of tools for analyzing the political, legal and regulatory environment for SMEs that the SMEDSEP has used. The tools are offered with the aim of helping other pracitioners conduct useful analyses of the enabling environment for SMEs and identify effective interventions to improve the political, legal and regulatory environment for SMEs. The tools focus on benchmarking city competitiveness, local governance, the national policy framework for MSEs, regional SME studies and business registration procedures. For each tool the following is provided: objectives, methodology, required inputs, lessons learned and various resources such as TORs, discussion guides and session guides.

    Finally, and most recent, is Lijauco's Analysis of Business Registration and Licensing in the Philippines, November 2006 (ed. to May 07).

    Methods for info gathering
    Review of related literature and policy studies; secondary source research; key informant interviews; focus group discussions with MSMEs

    Summary of results
    Two obstacles to growth stand out: the difficulties encountered by microenterprises with regard to registering their busiensses and the lack of access, particularly of SMEs, to finance. Taxes do not seem to be a significant burden for MSMEs but better information flows and assistance with regard to payment of tax liabilities is needed. The recent Trade Reform Policy liberalized many of the inported input requirements of SMEs. But among export-oriented SMEs, there is a consensus that government should subsidize the cost of fairs and exhibits. Customs practices can still prove to be a burden to SMEs. MSMEs have difficulties meeting the minimum wage law requirements. Technology policy with reference to industry is confused, due to the attempt by government to include as many sectors as possible in the Investment Priorities Plan. There is a lack of legal framework for competition policy in the country, but this does not seem to impose much of a burden on MSMEs.

    Associated Activities and Documents
    B.E. Assessment
    »Business Licensing Procedures in Bocolod and Ormoc, Philippines, GTZ SMEDSEP, 2005
    Project Design
    »GTZ Philippines SME Development for Sustainable Employment Program Design, 2004
    »Cities Competitiveness Ranking, GTZ Philippines, 2004