CAGAYAN DE ORO CITY Constituting almost 97% of the almost one million registered businesses, and employing almost 2/3 of all employed individuals, Micro, Small, and Medium Enterprises (MSMEs) are the real job generators in this countrys economy, particularly in the countrysides.
They are also the most agile, able to grow and expand, quickly. Thus, their potential to employ more people, expand, and serve as the backbone of inclusive growth, particularly in the countryside. Since half of our population is rural, and that agriculture, and the the MSMEs that use agri inputs will need to be boosted if poverty is to be reduced to 14% (from the current 21%) by 2022.
A vivid example of such dynamism and the impact on the local economy comes with processing of agricultural products like the more expensive locally grown glutinous rice. The suman
and rice flour-based snack food producers add value to locally grown malagkit rice, creating a strong demand for it, helping farmers secure sustained, well priced markets for their produce.
Thus, when we eat more suman and puto, local farmers reap the benefit of a steady demand they can fill. Sadly, there are few robust annual production figures for this product. Perhaps government agencies like the DTI can put some data together There are other examples I am sure you as reader can identify.
Thus, MSMEs deserve more than just awards and platitudes. Here are some ways to help this vibrant sector soar further:
Real support in terms of tax breaks and incentives. Note that our corporate tax rates are ASEANs highest at around 30%, with Indonesia and Malaysia at about 25%. If the Corporate Income Tax and Incentive Rationalization Act (Citira), which just passed on 3rd and final reading at the House of Representatives by a whopping 170-8 vote, becomes law, corporate income taxes can drop to as low as 20%-25% for all business. This is a clear boost for the small business, the backbone of our economy.
Which is why many small business groups are excited with the prospect of the reduced corporate income taxes under the CITIRA bill. In the recent Mindanao Business Conference in Iligan City, this measure is seen with interest.
Another leverage are new technologies that allow better efficiencies. This is posed to two agencies that can help businesses deliver.
The Department of Trade and Industry has its various industry development roadmaps and the the Department of Science and Technology (DOST) has its Collaborative Research and Development to Leverage on the Philippine Economy (CRADLE) program that seeks to strengthen industry and the academe, and the SETUP program that funds technical support to SMEs to improve production and packaging. When you go to a pasalubong or One Town One Product Center, note that the DOST seal of support is printed on the package.
Their secretaries and the bureauceacies under them will need to work double-time to deliver more services like these.
Other reforms needing strong implementation are the Ease of Doing Business Law. We hope that these measures make it easier for business registration and renewal, which are often a tedious task for many smaller businesses that can barely afford the services of third party consultants to handle such tasks on a regular basis.
Traffic in Mindanao cities demand better traffic solutions Having just completed a 1,000-kilometer trip cris-crossing Central and Northern Mindanao, I find that developments such as upgraded infrastructure, wider highways, and developments such as the cessation of violent activities, including the Marawi rehabilitation effort have all combined to fuel a slight uptick in business activities in many areas. The 7.1% growth has created an unwanted externality as more people buy vehicles.
In many cities we passed through high levels of vehicular traffic, showing a new hustle that we could not see before. Perhaps its time for many Mindanao cities to look at more cost-effective mass-oriented transport solutions to augment tricycles and pedicabs.
Minbizcon a success Congratulations to the Iligan Chamber of Commerce and Industry led by Reggie Punongbayan for a successful hosting of the 28th Mindanao Business Conference and Sulong Pilipinas consultative event.