Database of Philippines Companies

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					       SME
 CHARACTERISTICS
       and
STATISTICAL NEEDS
      in the
   PHILIPPINES

            By Benel P. Lagua
 Small and Medium Enterprises in
  the Philippines
 Current State of SMEs in the
  Philippine Economy
 Available SME Statistics
 Deficiencies in the present system
  of SME statistics
 Current initiatives to develop
  SME statistics
 Conclusion
A. SMALL & MEDIUM
ENTEPRISES in the Philippines




                Small and medium
           enterprises (SMEs) comprise
              99.6% of all registered
            business in the Philippines
              and employ 70% of the
                    workforce
Recently, Republic Act No. 9178,
otherwise known as the
Barangay Micro Business                      SMEs
Enterprise (BMBE) Act of 2002
has redefined the categories.
Hence, the present structure,
by law, is as follows :


 Micro     -     up to 3,000,000
 Small     -     P3,000,001 - 15,000,000
 Medium    -     P15,000,001 - 100,000,000
 Large     -     above P100,000,000
B. Current State of SMEs in the
Philippine Economy

1. Number of Establishments and Employees
According to the 2001 statistics of business
establishments published by the National
Statistics Office, there are 811, 589 business
establishments in the country.

Of total, micro-enterprises account for 743,949
(97.1%), small enterprises 61,759 (7.6%), medium
enterprises 2, 923 (.4%), and large enterprises
2,958 (0.3%).
2. Geographic Distribution
  The analysis of geographic
  distribution of enterprises
  throughout the country indicates a
  high concentration in the National
  Capital Region (NCR), which
  accounts for 24.4% of all
  establishments and 40.1% of all
  employees.

  The five regions subject to the present study (NCR, Regions
  3, 4, 7 and 11) hold a combined share of 65.0% of total
  establishments. Similarly, the regions account for 72.1% of
  total employees. As a result, around two-thirds of SMEs are
  concentrated in the five regions.
3. Sales and Value Added
by SMEs

The recent trends in value added by SMEs in the
  country and their sales indicate a growing share.
  SMEs as a whole have been steadily growing year
  after year with the overall industrial growth, as
  indicated by relevant factors, including the number
  of establishments and the number of employees.

Nevertheless, compared to the absolute number of
 establishments and employment, SMEs hold
 relatively small share of value added and sales, less
 than 30%, thus suggesting their development
 potential in the country.
C. Available SME Statistics

1. National Statistics Office
The primary source of statistics on
  Philippines SMEs is the National
  Statistics Office.

NSO is the major statistical agency
at the national level responsible in collecting,
compiling, classifying, producing, publishing, and
disseminating general-purpose statistics. Statistics on
the census of establishments is done every 5 years
2. Loans lent to SMEs
 All lending institutions are required to lend set
 aside at least 6% of their total loan portfolio to
 small enterprises and at least 2% to medium-sized
 enterprises.

 The Republic Act 6977 enacted in 1991 (the
 Magna Carta for Small Enterprises) required
 10% more to be diverted to SME’s. Then, it was
 amended in 1997 under the Republic Act 8289
 to extend the applicable period to 2007 and
 lower the minimum level to 6% and 2%.
 The Bangko Sentral ng Pilipinas is mandated
 by law to monitor this initiative.
3. Tradeline Philippines
Tradeline Philippines is an online
  database service that provides
  product search listing thousands
  of manufactured exported
  Philippine products complete
  with product specifications and is
  a business search allowing users
  to contact Philippine exporters,
  suppliers and local/foreign buyer
  details and the products/services
  they manufacture / provide and
  export
4. Exponet
The Bureau of Export and Trade Promotion's (BETP)
  Export Assistance Network (EXPONET) helps
  exporters and prospective exporters’ access
  information and resolve specific problems related to
  exporting

Exponet provides information on export seminar
  schedules, export organizing, export procedures and
  documentation, import facilities for exporters, buyer
  linkages, export financing and incentives, product
  raw material sourcing and other statistical
  information. The agency also assists exporters in
  export-related problems / trade complaints.
  D. Deficiencies in the present system
  of SME statistics
1. Timeliness
Statistics on the census of
   establishments (done every 5
   years) and the annual survey of
   establishments are usually
   released 15-24 months after the
   year. This makes the data more
   or less an imprecise tool for
   analysis and decision-making.

   In the same manner, BSP collects information on the loans
   lent to SMEs (in compliance with the Magna Carta for
   Small and Medium Enterprise) every quarter. The data
           athered is usually released only after 3 months.
2. Cross compatibility with other
countries for cross country comparisons

The major classification used by most countries to define
  SMEs is through assets and employment size.
  However, the size ranges of their classification differ,
  since developed countries have large industries than
  the less developed ones.

Hence, what might be considered as “small” by
  developed countries will already fall into the
  “medium” or “large” category for developing
  countries like the Philippines. Thus, cross
  compatibility with other countries for cross country
  comparison, is sometimes inappropriate or could not
  be used as basis for a policy recommendation.
3. Inadequateness
The scope and coverage of SME statistics are limited to 1)
  the number of establishments, 2) employment
  contribution, and 3) regional distribution. More
  important data which will help policy makers and
  businesses to react quickly in a competitive environment
  are usually not available. These statistics include:

   Export contribution of SMEs
    (direct and indirect contribution)
   Contribution of micro enterprises/
    informal SMEs to GDP, etc.
   Sectoral statistics/Growth potentials
    of industries.
4. Availability
There are confidentiality clauses in census for
   firm level data. This cannot be accessed at the
   National Statistics Office because their agency
   has to comply with the rules of
   confidentiality.

In similar ways, banks also ensure that access to
  customer information is limited to selected
  bank employees and are very conservative in
  disclosing client information.
5. Coverage
The Philippines has a large section of small business
   constituting the so-called underground or informal
   economy. This refers to the small scale units in the
   national economy, which produce and distribute goods
   and services without the benefit of official sanction or
   control.

They don't register, don't keep books and don't pay taxes.
  They operate beyond the reach of the law. They have little
  or no access to organized markets, credit institutions,
  educational or training centers or public services.
  Although efforts are being made by the government to
  bring the underground economy to the surface, the nature
  of this sector makes it very difficult to gather and process
  statistics on them.
E. What are the current initiatives to
  develop SME statistics?
1. National Business Registration (NBR) Project
The NBR project aims to address the growing concern of having
   consolidated information on all the registered businesses in the
   country.
Currently, no government agency has a complete record of all registered
   businesses since registration is being done by various agencies. It is
   the objective of the NBR project to integrate the information
   contained in the various agencies and have a single consolidated
   database containing basic information of all registered businesses.
The NBR project is considered a “timely” project for the country in this
   day and age of global economy. The NBR will not only enable
   Filipino entrepreneurs to find business ventures with fellow Filipinos
   but with foreign investors as well.
2. SME Database Project
The SME Database (headed by the DTI SME-Project
    Management Office) aims to act as a repository (databank) of
    the corporate profiles of SMEs. Its objective is to serve as a
    tool for monitoring the assistance given by the different
    agencies to each SME firm. The database is also designed to
    identify individual companies and to track the kinds of
    government assistance given to each.

The interim database will enable the much-needed tracking of
  SMEs during the crucial first six (6) months of 2003,
  especially for measurement against the National SME
  Agenda objectives. The final database could act as a master
  database of all SMEs nationwide, possibly supporting other
  organizations outside DTI, and would allow for more
  complex analysis and reporting. A networked database
  would facilitate the encoding of data from the provinces at
  the source of the information

The ultimate benefit of the SMEs is the possibility of
  minimizing, if not eliminating the need to register numerous
  times with various organizations.
F. Conclusion

While the SME sector is recognized as the focal point
 for growth that will ensure that the Philippine
 economy moves forward despite the threats of an
 unfavorable global environment, the overall fiscal
 condition of the country prevents it from being
 given utmost financial support.

Development programs have been laid out but
 resources are not readily available because of
 competing demands for government support.
It is also in this light that the government is
  open to learn new modalities in gathering
  and analyzing data. The administration has
  given outmost policy attention to SME
  development and hopes that that through
  new and better development initiatives,
  stakeholders can move the program
  forward.
Thank you very much
        and
   MABUHAY!!!

				
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Description: Database of Philippines Companies document sample