Supply chain growth saved MSMEs from difficult 2013

CEBU, Philippines - The micro, small and medium enterprises (MSMEs), although still challenged by big industry players, managed to sustain their businesses this year with the consistently growing supply chain from the different economic sectors.

Filipino Cebuano Business Club, Inc. (FCBI) President Rey Calooy described 2013 as a challenging year for the MSME sector taking into account the series of both natural and man-made calamities that hit the country.

He cited that while the 7.2-magnitude quake that hit the region two months ago and super typhoon Yolanda that battered the Philippines last November fall under the natural calamities, the pork barrel scam and corruption cases could be considered as those man-made disasters.

With almost 200 members, FCBI is a business organization that represents MSMEs in Cebu.

Calooy said that the national economy that is dubbed as one of the best performing in the world created positive ripple effect to the small-scale businesses.

He cited that apart from the lending rate that remained low, financial institutions and banks play in a healthy competition in offering monetary services to cater to the untapped yet significant market which is the MSME sector.

MSMEs comprise 99.6 percent of the total registered businesses in the country and account a significant contribution in the gross domestic product.

Calooy said that the economic growth and robust performance of  MSMEs in the market could be primarily attributed by the higher disposable income of Filipinos, increased remittance flow of overseas Filipino workers and vibrant business process outsourcing industry.

He also acknowledged other key growth drivers such as the service sector, government spending, construction by private companies, manufacturing industry and agriculture.

He pointed out that MSMEs managed to survive in the competitive industry among big industry players by implementing strategies that could complement with the latter’s requirements and applying guerilla marketing.

Guerilla marketing is a low-cost and unconventional marketing tactic often used by and ideal for small businesses.

Calooy identified the challenges in the industry that hurdle MSMEs to level up. These include the high cost of technology and machineries and the common tradition of families running their own business operations.

“Most of MSMEs are operated by moms and pops. It may either be the wife or the husband who is acting as the manager. It is difficult for us to institutionalize and professionalize the management aspect. It is sad to note that sometimes, we are the systems running the business instead the other way around,” he said.

Despite such impediments, he said that the sector remains optimistic that the Philippine economy will continue to perform “better than expected.”

Calooy further noted that potential growth opportunities that the industry could capitalize on span from private-public partnership projects, tourism boom, manufacturing, retail, financial intermediaries, outsourcing companies, agriculture and food security. /JMD (FREEMAN)