DTI-7 cites export and tourism as potential areas for MSMEs

CEBU, Philippines - The Department of Trade and Industry (DTI) recommended the export sector and tourism industry as areas of opportunities that micro, small and medium enterprises (MSMEs) can take advantage of.

DTI-7 Regional Director Asteria Caberte said that MSMEs are strategic component of the export value chain, serving as suppliers and subcontractors for large-scale businesses.

She also considered the sector as a critical driver for the investment, economic growth, job creation, local transactions, productivity enhancement and technological innovation of the country.

She cited that during the financial crisis in 2008, exporters sought the help of DTI to address the need to be more cost-efficient.

The latter had come up with a program capacitating smaller companies with skills and technologies and speeding the development for the untapped sector to be proficient while enhancing competitiveness of large enterprises, she added.

Although MSME serves as an entry-point of enterprises for businesses to grow, she noted that the sector is constrained with challenges in realizing such potential.

These include high cost of doing business, lack of access to finance and market information, low productivity and competitiveness, lack of credit information, and limited management capability and financial expertise.

Caberte said that a question of credit worthiness deters banks for lending MSMEs the credit needed to grow their businesses which contributes to the failure for them to engage in innovation, research and development.

“Our heart goes to MSME to help them but we look for a track record. How can we have a track record if don’t even risk to help them. We have to break the chain. Everyone has to take the risk, including the financial institutions,” she stated during the forum on risk-based lending for SMEs at Hotel Elizabeth last August 23.

She also cited that many SMEs remain domestic-oriented rather than concentrate on the export market due to such constraints.

Aside from the export sector, she noted that the tourism industry could serve as another market that MSMEs can take advantage of, taking into account its growing trend of tourist arrivals in the country.

“The opportunities come in different ways. The need and the source are very distant. Yet, the government, as an enabler, can simply put the two together,” she said.

She added that DTI has been conducting an industry clustering for tourism and wellness among seven regions that includes Region 3, 4, 6, 7, 8, 10, and 11.

She further cited that MSME Development Plan for 2011 – 2016 aims to address the critical constraints of the growth and development of such sector, create enabling business environment and provide access to finance and markets, thus strengthening the competitiveness and productivity of MSMEs.  (FREEMAN)