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Supporting the digital journey of MSMEs

Micro, small and medium enterprises (MSMEs) are often referred to as the lifeblood of the economy as they comprise 99 percent of business enterprises operating in the Philippines and employ 63 percent of the country’s workforce.

MSMEs were greatly affected by the pandemic, with 81 percent of them experiencing lower consumer demand based on a 2020 survey by the United Nations Development Program (UNDP). They suffered income losses from disrupted cash flow and continuing expenses, yet 20 percent of those surveyed tried to retain their employees and providing full pay, but some 25 percent had to lay off employees.

In the UNDP’s report, MSMEs implemented adaptive business measures, including digitalization, to address the impacts of the pandemic. They started using online platforms for their business transactions, utilized non-cash payment options, reduced costs and diversified products and services, and allowed employees to work from home.

It is worthy to note that, while existing MSMEs — whether engaged in online business or otherwise — were affected by the pandemic, there were also those who saw an opportunity to engage in online business during the pandemic.

Based on the records of the Department of Trade and Industry (DTI), there were 85,074 new business name registrations as of October 2020 under the “retail sale via the internet” business activity.It is thus important to ensure that our MSMEs can get the right access to e-commerce trainings to support their digital transition.

President Ferdinand Marcos Jr. has always acknowledged the importance of MSMEs in the country's economic growth. He stressed that they are crucial in the creation of new ideas, jobs, and wealth, and thus need to be empowered.

The government likewise recognizes the importance of digitalization as a key driver for long-term development and the economic transformation of the post-pandemic global economy. Thus, in empowering MSMEs, they are put at the center of the administration’s digitalization efforts.

Recently, a memorandum of agreement (MOA) was signed between the government and private sector for the implementation of Kapatid Angat Lahat for Agriculture Program (KALAP). The MOA aims to support MSMEs and farmers using Go Negosyo’s framework of providing access to money, markets and mentoring.

The President again stressed the importance of society working as one, underscoring that public-private partnerships are crucial to address problems in the country’s agriculture and MSMEs sector. For instance, the role of big corporations in spurring the growth of MSMEs cannot be overemphasized. Which is why through KALAP, small farmers and agri-entrepreneurs will be integrated into the value chain of large companies. Through this program, farmers and MSMEs will become more productive, profitable, sustainable, and globally competitive; and hopefully, the next generation of farmers — millennial farmers as the President would describe them — will already be using the best technologies with the complete support of a value chain.

Our MSMEs and agricultural sector must already tread the path of digital transformation. It is now inevitable. After all, the use of digital technologies presents opportunities for the formalization and growth of enterprises. It facilitates connectivity, flexibility, and efficiency in business operations and provides a wider market for MSMEs. We only need to make sure that these opportunities are equally accessible to all existing and aspiring entrepreneurs to foster inclusivity and sustainability.

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