DTI proposes simplified rules to help SMEs compete in Asean

MANILA, Philippines - The Department of Trade and Industry (DTI) has proposed simplified rules for small and medium enterprises (SMEs) during the recent Association of Southeast Asian Nations (ASEAN) Economic Ministers meeting to allow better participation in trade in the region.

Trade Secretary Gregory Domingo told reporters on the sidelines of the Philippine Bamboo 2014 Showcase opening ceremony that during the ASEAN Economic Ministers meeting held in Myanmar last month, he proposed having simplified rules for SMEs in the region for trade facilitation.

 “In the last ASEAN meetings, we suggested that there should be specific interventions for SMEs. (We want) simplified or elimination of rules of origin requirement for certain product classes of SMEs like processed food, handicrafts,” he said.

He said securing a certificate of origin is burdensome for SMEs and simplifying rules or eliminating such requirement would make it easier for such businesses to trade with other countries.

Unlike in the past,  he said promoting SMEs is now among the priorities of the ASEAN.

 “It is no longer on the back burner. It is one of the priorities,” he said.

This, as he noted that greater market access has been recognized as necessary to promote the growth of SMEs.

While the Philippine government wants to enable SMEs to have greater market access, such businesses should not rely on state support to become successful, Domingo said.

 “Obviously, government is pushing to provide support for SMEs, but these businesses should think of government as an add-on and not as a core thing that will make the business successful. If their attitude is they will not become successful without government support, then nothing will happen. They will lose,” Domingo said.

Among the programs being implemented by the government to support SMEs are the Shared Service Facilities (SSF) program, SME Roving Academy and Doing Business in Free Trade Areas (DBFTA).

Under the SSF program, the DTI provides equipment to help improve the quality of products of MSMEs.

The DTI also provides training under the SME Roving Academy, while it conducts business information sessions that provide entrepreneurs with knowledge on how to navigate and profit from the country’s free trade agreements.

Like in most countries in the ASEAN, the SME sector is considered a key contributor to the Philippines’ economic growth.

SMEs account for 99.6 percent of total business establishments and 60 percent of total employment in the country.

The recent ASEAN Economic Ministers meeting tackled on the post 2015 scenario in the region as well as the Regional Comprehensive Economic Partnership which aims to consolidate all its free trade agreements into one regional free trade network.