Small firms urged to transform into Asean-focused SMEs

MANILA, Philippines - Small and medium-size enterprises (SMEs) should focus their attention  on studying the Association of Southeast Asian Nations   and joining the region’s  supply chain to tap into the group’s 600-million-strong consumer market.

This is the advice of industry experts who spoke recently at different business conferences on the impact of the Asean Economic Community (AEC).

They agreed that SMEs must start leveling up their operational efficiency and improving their product quality to take advantage of the “immense market opportunities” being presented by the regional integration.

Cielito Habito, chief of party of the Trade-Related Assistance for Development Project of USAID, said the Asean integration presents a key opportunity, especially in the area of banking and manufacturing. 

“The rise in recent years of Asean intra-industry trade, which promotes complementation rather than competition within the same industries  also presents huge opportunities for local enterprises,” Habito said.

He pointed out how this opens up opportunities for Filipino enterprises to partner with companies within the Asean in the production, supply of products or provision of services.

“Opportunities lie in regional and global production networks or value chains,” said Habito, adding that the Philippines is already “well positioned in cross-border value chains especially with its prominence in business services.”

Habito also suggested that SMEs should “shun kanya-kanya  and embrace clustering and coopetition instead.’’

He further urged local firms to “face the music,” the way the sugar milling industry has started to. The industry has been buying more equipment lately as they gear up for greater competition with the lowering of  tariff rates.

“It’s a matter of attitude,” he added, as he called on small entrepreneurs to gear up and become “AEC-enabled SMEs.”

Nestor Raneses, director of the University of the Philippines-Institute for Small-Scale Industries, said SMEs have to start “thinking globally but prospering regionally.”

Acknowledging that SMEs will most likely be the most vulnerable and most affected by the integration, he urged them to start taking action to be more competitive.

Speaking at the “Asean Integration 101” workshop held in UP-Diliman, he pointed out how the Drugstores Association of the Philippines has begun mobilizing and consulting its members on an effective action plan for the Asean union.

 Director Senen Perlada, of the Department of Trade and Industry’s Export Marketing Bureau, underscored the need for exporters to “adapt and learn,” and to “exploit to full advantage” the tremendous potential from the “economies of scale” that Asean unification brings.

He further encouraged local companies to think in terms of “quality, “standards and efficiency” since the measure of their success would now be “performance-based.”