DTI providing MSMEs with economic rudder

Micro, small, and medium enterprises are prompted to embrace and adapt to digital technology, which is a herculean task that Trade Secretary Alfredo Pascual is given priority during his watch.

The pivot to digitization has become imperative as most businesses seek to reach more markets amid the restricting conditions brought about by the pandemic.

Coming from the academe, Pascual has a scholarly approach being on top of the Department of Trade and Industry which has a pirotal role in the recovery phase.

Pascual said among his priorities as DTI chief is promoting the advancement of MSMEs, aside from backing the manufacturing sector, facilitating the ease of doing business, attracting investments, expanding export markets; and restructuring the organization.

"We want to expand MSMEs, from micro to small, small to medium, and medium to large enterprises. But this would be possible through adopting technology and innovation, linking MSMEs into the supply chain, developing regional industries, and improving their competitiveness," Pascual said in a previous forum.

Part of the digital transformation is DTI's strategy to upgrade, upskill, and upsize MSMEs, which are considered the backbone of the economy as they comprise 99.5 percent of about a million registered business establishments in the country while employing 63 percent of the total workforce, and contributing to almost half of the gross domestic product.

Address constraints to finance

"For MSMEs to continue to grow and upscale, we need to address the constraints to access to finance, technology, and the market. To help ease MSMEs' access to services, we have established 1,344 Negosyo Centers throughout the country, covering all cities and 66 percent of municipalities," he said.

Apart from pivoting, MSMEs need access to financing, which is why he said the DTI is developing several instruments that will cater to the different capacities of MSMEs.

"We have a grant-matching facility that supports agri-businesses in selected regions. We work with agri-businesses that address gaps in the food value chain in developing their business through the grant facility. We will also expand the loan facility of our attached agency, Small Business Corporation, for other agri-businesses that are under the mentorship of DTI," Pascual said.

Moreover, he said Small Business Corp., the financing arm for MSMEs, implemented the Pondo sa Pagbabago at Pag-asenso program or P3 that offers affordable interest rates and charges that suit the capacities of enterprise borrowers with relatively small asset sizes and business centers in the poorest provinces.

Along similar lines, the Rise Up loan program provides MSMEs that have hurdled the pandemic with multi-purpose loans on soft terms.

OTOP lined up for revival

Further, he said his tenure would maintain a focus on the continuation of the One -Town, One-Product, and Shared Service Facility programs of the DTI implemented in the past administrations.

For the manufacturing sector, Pascual highlighted the continuation of the DTI's Manufacturing Resurgence Program that will work on closing the supply chain gaps.

Also, the trade chief has kept his eye on the roadmaps for sectors that are expected to contribute to massive job generation for the country while targeting the revitalization of the pharmaceutical sector as the country continues to reel from the global pandemic.

As the Philippines moves toward a post-pandemic future, Pascual said the country needs inclusive and sustainable industrial development.

Pascual said the path to recovery is attainable by providing a bigger role to science, technology, and innovation or STI and the use of essential digital technologies. Industries will be better positioned to transform and face competition in domestic and export markets.

Innovation and the new technologies it entails leads to the creation of new goods and services in the market. This results in quality jobs and economic opportunities for Filipinos, according to Pascual.
Specifically, the aim is for stable and higher-paying jobs. Innovation also results in the emergence of new industries and the production of environmental goods, the DTI chief added.

New technology such as smart manufacturing, leads to improved production efficiency. This in turn leads to more efficient energy use, industrial competitiveness, and linkage to support industries. The use of science, new technologies, and innovation is a vital step to upgrading our industries toward a more inclusive and sustainable industrial development. STI will define our next era of industrialization, Pascual explained.

Concrete economic plans

The Fourth Industrial Revolution brings unprecedented change, which is the result of merging the country's biological, physical, and digital worlds.

It is shifting our approach to developing our economies. Industry 4.0 technologies such as artificial intelligence and smart manufacturing can help advance enterprises and industries; and increase the share of STI -intensive sectors in our country's gross domestic product, he said.

The next strategy is to integrate trade, investment promotion, and industry development policies, as Pascual plans to integrate production systems, for instance, by linking manufacturing, agriculture, and services.

We shall deepen our global value chain participation, pursue a more aggressive trade and investment policy, and expand and diversify exports, trade, and investment partners, he added.

The fourth strategic action is to develop human capital and capacity-building programs to prepare the country's workforce for the future.

While many jobs will be lost as a result of automation, new jobs will emerge through the adoption of technologies that will increase worker productivity. Tapping this opportunity will require increasing investments in skills development. We also would like to persuade and support companies to upskill their workforce so that workers can perform newer and higher -order roles that complement the work of machines. Current systems of learning and signaling job fit are not enough to provide the agility that lifelong learners will require. We, therefore, need to shift to a skills-based system that can provide more efficient mechanisms, he explained.

The rest of the strategic action is to promote regional industrialization through innovation and entrepreneurship and to create and foster an enabling economic environment to attract more investments.