Only a few small and medium enterprises (SME) in the country are linked to the so-called global value chain (GVC). This is according to Philippine Institute for Development Studies (PIDS) consultant Tristan Canare in a seminar recently organized by the Institute.

GVC, as defined by the World Economic Forum, are the “full range of activities undertaken to bring a product or service from its conception to its end use, distributed across international borders.”

In his presentation, Canare said it is important to link SME to GVC to expand the country’s market access and promote the transfer of technology, human capital and information.

SME account for 99.5 percent of the total registered firms in the Philippines or almost two-thirds of the total sectoral employment and contribute a third of the gross value added to the economy.

Citing the result of the research paper “Obstacles and Enablers of Philippine SME Participation in Global Value Chains,” which he coauthored with Jamil Paolo Francisco and Jean Rebecca Labios, Canare said the ‘weak connection’ between Philippine SME and GVC can be attributed to some ‘perceived obstacles’, such as the country’s high tariff taxes in export markets, issues on corruption and foreign currency fluctuations.