Government urged to do business with SMEs

Small and medium enterprises (SMEs) are seeking an amendment to the Magna Carta for SMEs.

Philippine Small and Medium Business Development Foundation (Philsmed) president Mina Gabor said yesterday that government should channel more of its business to SMEs.

"This the government can do by amending the Magna Carta for SMEs wherein there will be a provision allocating at least 35 percent of all government procurement to SMEs," Gabor said.

She said SMEs actually comprise 99.9 percent of all businesses in the Philippines.

"In the US, SMEs comprise 80 percent of all American businesses," she added.

However, in the US, Gabor said the government ensures that SMEs are treated on an equal footing with large US businesses.

"American SMEs are ensured by US laws to be able to provide at least 35 percent of any government material and service requirements," she said.

The suggestion of Philsmed, Gabor said, is thus patterned after the US SMEs.

Businesses with a capital of P1.5 million and below are defined as micro-enterprises.

Small businesses are those with a capital of at least P15 million, while medium enterprises are those with a capital of at least P60 million.

Gabor, a former government official who helped found the Center for International Trade, Exhibits and Missions (CITEM), helped established the Philsmed, which is working to help the SME sector.

Gabor said Philsmed has been working with at least four commercial banks to help provide financing for SMEs.

It recently signed a contract with Citibank to provide loans of up to P15,000 to SMEs with no collateral, no co-maker and no guarantor.