Micro, small and medium enterprises play a critical role in the socioeconomic development of the Philippines, comprising over 99 percent of the country's entire businesses. Spread across rural and urban areas, MSMEs produce a diverse range of products and services and provide nearly 65 percent of the country's total employment at low capital cost.

According to George Royeca, the chief executive officer of motorcycle taxi service Angkas, these MSMEs not only support the industrialization of rural communities but also provide regional balance and assure equitable distribution of wealth and income.

"Apart from foreign direct investments, there are a lot of industries that can be managed with the Pinoy capital. But the hidden gem that we haven't explored is MSMEs. But the first thing that we must do is redefine what an MSME is. Putting a shop requires various stringent requirements, going to SEC (Securities and Exchange Commission), while others cannot secure bank loans," he said.

A critical component to upscale the operations of MSMEs and bring them to the formal financial ecosystem is redefining how we look at them because of digitalization changes in how entrepreneurs do business.

MSMEs, Royeca explained at the 48th Philippine Business Conference and Expo 2022 at the Manila Hotel, should be exempt from stringent government regulations, particularly with the Bureau of Internal Revenue and SEC, for their potential to grow exponentially.

"We (Angkas) did not create the motorcycle transport sector, it's already there by the millions, but they are just informal. The same thing with Sari-sari stores, which are still informal but the largest channel of FMCGs (fast-moving consumer goods). So, we can harness the power of MSMEs through technology, digitization, or simply recognizing them, somehow, as a vital part of the economy," Royeca explained.

Royeca oversees more than 30,000 bikers, while citizens who have downloaded the Angkas application reached five million as of October this year.

Further, he said MSME now needs "simple recognition from the government."

Earlier, Trade Secretary Alfredo Pascual revealed an ongoing initiative to redefine MSMEs amid changes in how entrepreneurs do business because of digitalization.