the philippine environment for entreprenuerhsip
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Rationale for Promoting Micro, Small, and Medium Enterprises (MSME)
• Relative ease in setting up• Employment Generation• Flexibility and lower capital cost per job created• Provision of niche services that may not be
profitable for large business• Distribution of income• Utilization of local resources
The Definition of an MSME
MSME Is defined on the basis of total asset value and number of employees. Accordingly, MSMEs are subdivide into three categories: Micro Enterprise, Small Enterprise, and Medium Enterprise
Category Total Assets No. of Employees
Micro Enterprise P 3,000,000 or less 1 - 9
Small Enterprise P 3,000,001 – P 15,000,000
10 - 99
Medium Enterprise
P 15,000,000 – P100,000,000
100 - 199
Source: DTI SME Development Plan 2004-2010
Table 4.1. Number of Establishments per Category,2003
Percent to Total
Total Micro Small Medium Large
810.362 743.628 60.785 2,922 3,027
100% 91.76% 7.5% 0.36% 0.37%
Source: NSO as of June 2005
Series1
Fig. 4.1. Percentage Distribution of Establishments
75000
600000
450000
300000
150000
0
Small Enterprise(7.5%)
Medium Enterprise (0.36%)Large Enterprise (0.37%)
Micro Enterprise(31.8%)
Table 4.2 Number of establishments per Sector, 2003
Categories Number %Agriculture, Hunting, Forestry 3,215 0.40Fishery 1,145 0.14Mining and Quarrying 328 0.04Manufacturing 123,406 15.23Electricity, Gas, Water 1,241 0.15Construction 2,675 0.33Wholesale and retail trade 434,650 53.64Hotels and Restaurants 88,624 10.94Real Estate, Renting and Business Activities 38,940 4.81Health and Social work 28,201 3.48Financial Intermediation 24,061 2.96Transport, Storage, and Communications 14,318 1.76Education 9,338 1.15Other community, Social and Personal Services Activities 40,310 4.97Total 810,326 100.00
Major Challenges and Issues for Philippine MSMEs
1. Competition in export markets and influx of mass- produced products
2. Existence of small domestic markets and limited local market
3. Need for imported parts and materials and limited industrial linkages
4. Lack of basic management techniques5. Barrier to start up business, Lack of support
in the areas of fund raising and research and development
6. Limited economic activities at local level
The Philippine SME development Plan
1. Intense foreign competition2. Critical issues such as improvement of the
management capability of MSMEs and business environment for MSME growth
3. Government and Private sector resources and partnership
4. Innovative in all aspects of operation5. Creation of more business opportunities
Strategic Development Goals
A. Enterprise-Level strategiesA. Provide comprehensive support to
entrepreneur in terms of managerial and technological capability
B. Provide business opportunities for development
B. Sector Level Strategies.C. Broad base level strategies
International Institutions
1. The world Trade Organization(WTO)2. The Association of southeast Asian Nations
(ASEAN)3. The ASEAN Free Trade Area (AFTA)4. The Asia-Pacific Economic Cooperation
(APEC)
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