Govt to fold SME agencies into one unit

The government will streamline its small and medium enterprise (SME) development efforts by placing all bureaus and agencies mandated to help the sector “under one roof.” On the sidelines of the Financial Executives Institute of the Philippines Inc. (FINEX) general membership meeting on Wednesday, Trade Secretary Gregory Domingo told reporters that eight agencies have overlapping SME-related programs and functions.

“Although each of these agencies has been mandated to focus on one form of SME assistance, our efforts are to be carried out in a comprehensive and integrated manner, so that one is hard put to tell where one agency’s assistance ends and where another agency’s role begins,” Domingo said.

He said the SME programs will be transferred to the office of Undersecretary Merly Cruz, who oversees
Trade department’s Regional Operations and Development Group. The consumer-related functions will be centralized under the watch of Undersecretary Zenaida Maglaya, who heads the Consumer Welfare and Trade Regulation Group.

Domingo said the reorganization and consolidation of SME efforts will be done in the next four weeks.

Besides this, the official said the agency will support training programs for small businesses but financing would be restricted to enterprises that look promising.

In a speech during the Finex event, Domingo said the Trade department has come up with four major thrusts that will guide its SME program.

“Because of limited resources, it is the nonfinancial forms of assistance—market development, entrepreneurship training, and product development—that we shall first provide to SMEs,” Domingo said.

He said the training programs will start within the year.

After a year or two, the department would be able to identify the so-called stars or those SMEs that show growth potential.

“The ‘stars’ which emerge with some measure of success shall then receive all our support, including product design, packaging, management training, and financial assistance,” Domingo said.

The Trade chief later told reporters that the stars will be determined based on revenue growth, profitability and viability of the business model.

He said providing financing support to all small businesses is difficult since the capitalization of the DTI-controlled lender, Small Business Corp., remains small.

This situation is compounded by the failure of some commercial banks to comply with the mandatory 10-percent allocation for SME lending under the Magna Carta for Micro, Small and Medium Enterprises. –BEN ARNOLD O. DE VERA REPORTER, Manila Times