Red tape, cost endure as hurdles — DTI official

Micro, small and medium enterprises (MSMEs) are having a hard time taking off in Region IV-B or Mindoro, Marinduque, Romblon and Palawan (MIMAROPA) as the cost of putting up a business and red tape remain hurdles to business owners.

In an exclusive interview, Department of Trade and Industry-MIMAROPA regional director Rodolfo Mariposque said they have only assisted 450 to 500 MSMEs in the said region out of more than 27,000 enterprise owners logged by the Philippine Statistics Authority.

“The challenges facing MSMEs in the region are the cost of doing business, the enduring red tape, and supply chain woes. In Puerto Princesa alone, businesses opted to put shops in the Municipality of Narra, a first-class municipality, because it’s very costly to put up businesses in Puerto Princesa nowadays,” he said.

He said red tape within local government units remains a problem in the region, urging LGUs and the national government to employ Green Lane for business owners wanting to put up shops in the region.

The Green Lanes, established through Executive Order 18 in February 2023, aim to accelerate and simplify permit and licensing processes for strategic investments, driving economic growth and innovation in the Philippines.

“If LGUs treat future investors with red tape and bureaucratic ways to business communities, where are we heading? There is no improvement. That is the primary problem of MSMEs for so long,” he said.

Aside from this, he said one of the barriers to trade, particularly in MIMAROPA which is surrounded by seas, is the questionable suspension of vessel voyages during typhoons.

“Even if the typhoon is still far, vessel journeys are suddenly suspended. Some deliveries fail to reach their destinations. Short destination journeys should be spared from those warnings,” he said.

Citing the recent typhoon “Pepito” last week, Mariposque said operations in various ports in MIMAROPA were canceled even if the sea was calm and the sun was shining.

Supply chain woes

In terms of supply chain problems, he said it’s about time that the government should establish a food terminal where various produce from provinces can be delivered and stocked.

“In Marinduque, bananas are so costly because they are being imported from Tayabas, Quezon. On the other hand, Mindoro, which is known to have banana plantations, is importing bananas from Davao. Can you imagine? There’s a need for better infrastructure to improve the supply chain,” he said.

The DTI official said, indeed, there is a market failure, as the produce of farmers bought very cheaply by middlemen is being sold in Metro Manila at least five times the original price.

“The storage facility and transportation should be the problem of the government, not the producers. That’s what Thailand has been doing. The King has this Royal fund that is being used to purchase crops in the mountains and then bring them to food terminals. We have had that before in Bicutan. Our farmers remain poor because they become the last mile even if they should be the first,” according to Mariposque.

Last month, Agriculture Secretary Francis Tiu Laurel Jr. revealed they plan to establish solar modular cold storage to support local farmers, improving the entire value chain and ensuring the quality of high-value crops and other agricultural commodities through proper preservation or buffer stocking.

The Agriculture chief noted that the measure would be in line with the directives of President Ferdinand Marcos Jr. to support local farmers, as he indicated an additional budget for solar-powered modular cold storage.

Tiu Laurel said Oriental Mindoro and Occidental Mindoro, as well as the Cordillera region, will be prioritized in the establishment of the cold storage.

Besides this, he said the whole-system improvement will include the operation of food terminals, trucking services, and expansion of Kadiwa outlets nationwide.

Not digital ready

Meanwhile, Mariposque admitted that despite significant government efforts, MSMEs getting on board the digitalization bandwagon remains very few, or only eight percent.

“Some of them are still cautious that their precious funds will be carted away just like what happened recently. Most of our MSMEs are traditional business owners since they are in the provinces. We hope some financial technologies bear a trust mark, just like others,” he said.