Biz leaders to government ‘Make ecozones friendly to SMEs’

CEBU, Philippines - While Cebu business leaders are welcoming the government's plan to set up an economic zone for Small and Medium Enterprises, they suggested that some modifications and policies are necessary to make the country’s economic zones friendlier to small players.

"The government needs to do this and be very clear on the policies and implementation," said Cebu Business Club president Gordon Alan Joseph.

Joseph believes that the plan is "brilliant" as it will create economies of scale and improve chain logistics. However, he warned that careful modifications of the existing laws in the Philippine Economic Zone Authority should be implemented for SMEs to easily enter into the economic zone value chain.

Likewise, Mandaue Chamber of Commerce and Industry past president Philip Tan echoed a similar sentiment, saying if the government were to pursue this, a different set of rules and regulations should be introduced, as the existing PEZA law is a bit intimidating for small and medium traders.

The Department of Trade and Industry recently announced that it is open to a proposal of Japanese businesses to set up an economic zone for SMEs allowing local firms to supply to big companies and become part of the global value chain.

DTI Undersecretary Ponciano Manalo Jr. said that the government would be looking at how a special economic zone could be put up for SMEs as proposed by the business delegation organized by Japan’s largest business organization the Japan Chamber of Commerce and Industry, during a dialogue with President Aquino and other government officials.

"The intention is noble and without question. But under the existing PEZA requirements, only few SMEs can easily comply with the strict requirements," said Tan.

JCCI chairman Akio Mimura earlier said the group proposed the creation of an economic zone as well as a rental factory for SMEs to the Philippine government to support the growth of small businesses.

SMEs, according to Mimura are not like major corporations. They are vulnerable to fluctuations and changes in outside environment and therefore, they are hesitant in making foreign investments.

While the proposal has not been firmed up, Manalo said the Department of Trade and Industry would want to meet with the Philippine Economic Zone Authority as well as the Japan External Trade Organization to see how to proceed with the proposal.

Manalo said the creation of economic zones for SMEs will likewise support the government’s goal of promoting the resurgence of the manufacturing sector which is seen to generate jobs and make economic growth inclusive.

According to Tan, there are a lot of SMEs wanting to enter the economic zones as sub-contractors to bigger manufacturing plants, but only few have been able to get through under the existing set of rules, which are mostly intimidating to small businesses. (FREEMAN)