Local SMEs told to explore partnerships with Indonesia

CEBU, Philippines - While it is imperative for businesses to make strategic moves to survive under the one ASEAN Economic Community, small and medium business players are urged to explore partnerships with Indonesia.

The Philippines is already a 100 million market. Indonesia is 300 million, these two countries alone already covers 60 percent of the entire ASEAN market, said Department of Trade and Industry assistant secretary Ceferino S. Rodolfo.

Rodolfo said as SMEs have no capabilities like the local business giants to set up physical presence in every ASEAN member country, they can be part of the entire value chain.

Partnering with Indonesian companies, either in trading, direct export, or other type of collaboration, is seen to leverage Filipino SMEs as the AEC is a regime where "survival of the fittest" will be magnified.

The Philippines, he said is one of the most attractive countries in the ASEAN because of its big market base, as well as Indonesia. If businesses of these two countries will collaborate and forge strong partnerships, they are most likely to survive and thrive.

"Being part of other value chain is valuable options for Filipinos, because we have big domestic market," said Rodolfo.

Domestically, Rodolfo suggested that SMEs should also be more active in business matching to strengthen internal presence such as recognizing the strength of other regions and provinces, then collaborate.

The trade official also mentioned the importance of the local government units to support the local SMEs in addressing their concerns.

In terms of framework and compliance to the AEC, the Philippines is in fact ahead with the other member countries. "We are in fact mostly complied."

The Philippine's game plan in the AEC is already ongoing, such as the clustering initiatives and share services facilities and the series of doing business in Free Trade Areas Fora of the DTI; the Industry Road Map of the Board of Investment, Inclusive Finance Program of the Bangko Sentral Ng Pilipinas, the current review of Competition Law in the Congress, Trade Facilitation For SMEs of the Bureau of Customs, among others,

Based on the AEC scorecard Philippines is 87 percent complian. However, there is still 13 percent of policy commitments that has to be done.

Because of this, Filipino companies particularly the SME sector should join hands, clustering to guard its 100 million consumer base in the Philippines at the same time capture a huge chunk of the 600 million consumers within the ASEAN bloc, especially Indonesia. (FREEMAN)