Legarda Sustains Support for MSMEs to Help Address Unemployment, Poverty

October 28, 2017

Senator Loren Legarda increased funding support to expand and enhance the capabilities and competency of micro, small, and medium enterprises (MSMEs) by allocating one billion pesos each for the proposed 2018 budgets of the Pondo Para sa Pagbabago of the Small Business Corporation and the Shared Services Facilities (SSF) program under the Department of Trade and Industry (DTI).


Legarda, principal sponsor and author of Republic Act No. 9501 or the Magna Carta for MSMEs and Chair of the Senate Committee on Finance, said that she supports the President’s vision on further unlocking the country’s growth potential or patuloy na pag-unlad.


The Senator said that setting aside one billion pesos for the Pondo Para sa Pagbabago would boost the continuous development of MSMEs, while the one billion pesos for the provision of SSF would enhance their productivity and competitiveness. Of the one billion pesos for SSF, 200 million pesos will be for SUCs that implement livelihood initiatives; 100 million pesos will be for Schools of Living Traditions (SLTs); and 50 million pesos for the MSMEs affected by the war in Marawi.


“In order for us to sustain our progress and achieve genuine inclusive growth, we need to ensure that we encourage and support the development of our MSMEs, which represent the majority of our enterprises and comprise the largest bulk of our workforce in the country,” Legarda said.


“Compared to larger enterprises, our MSMEs are more susceptible to changes in our economy, which would also affect their capability to employ and expand. Government interventions should address these factors that contribute to the unemployment and underemployment within our working class, as well as poverty incidence among all Filipinos,” she added.


According to a 2015 survey[1] of the Philippine Statistics Authority (PSA), of the 900,914 total establishments in the Philippines, 99.5% or 896,839 are MSMEs, while the remaining 0.5% or 4,075 are large enterprises. In the same study, MSMEs were found to have generated a total of 4,784,870 jobs in 2015 compared to the 2,981,819 for the large enterprises—indicating that MSMEs contributed almost 61.6% of the total jobs generated by all types of business establishments that year. Of this percentage, 29.4% or 2,285,634 jobs were generated by micro enterprises, 25.3% or 1,968,452 by small enterprises, and 6.8% or 530,784 by medium enterprises.


The PSA also noted that, as of January 2017, out of the 42.1 million persons who are in the labor force, employment rate was estimated at 93.4%; however, 16.3% or 6,398,000 Filipinos are underemployed and 6.6% or 2,761,000 Filipinos remain unemployed.[2]


Meanwhile, poverty incidence among Filipinos in 2015 was estimated at 21.6%, registering 21.9 million Filipinos below poverty line.[3] A Filipino in 2015 needed at least P1,813 on average monthly in order to meet both basic food and non-food needs.


“I see our MSMEs as crucial partners of the government that can help alleviate poverty. Our support to MSMEs should be beyond easing up bureaucracy for them. Our government should provide technical assistance, such as technology transfer knowledge exchange, skills training, and other capacity building activities, that will further advance the proficiency of our MSMEs,” Legarda said.


“By doing so, we also express our support to unlocking more markets, development of more businesses, and the protection and perpetuation of our livelihoods. I would like to see our country with a robust economy, teeming with opportunities for all our Filipinos to desire and take,” Legarda concluded.***



[1] MSME Statistics, Department of Trade and Industry, http://www.dti.gov.ph/businesses/msmes/msme-resources/msme-statistics

[2] Employment Situation in January 2017, https://psa.gov.ph/content/employment-situation-january-2017-final-results

[3] Philippine Statistics Authority, http://www.psa.gov.ph/sites/default/files/2015%20Full%20Year%20Official%20Poverty%20Statistics%20of%20the%20Philippines%20Publication.pdf