Small and Medium Scale Industry
Role and Importance of MSMes in the country's economic development
MSME's are defined in two major ways
-by assets and employment size
Asset Size
The total inclusive of those arising from loans but exclusive of the land of which the particular business entity's office, plant and equipment are situated, must have falling under the following categories
Micro - less than Php3,000,001
Small- Php3,000,001 up to Php 15,000,000
Medium- Php15,000,001 up to Php100,000,000
Large- Above Php 100M
Micro, Small and Medium Industry
- In the Philippines, 99.1% of the businesses are small and medium enterprise and only 0.99% are large enterprises.
- Republic Act No. 9501, The Magna Carta for Mirco, Small and Medium Entereprises, signed by President Arroyo on May 23 2008 defines micro enterprises as entities with total assets of not more than Php 3,000 small enterprises as the new law, RA. 9501 amends the 17 year old R.A 6977 or the Magna Carta for Small Medium Enterprises.
- notably skillful in maximizing the use of scarce capital resources and are able to partner with large firms by supplying locally available raw materials in unprocessed or semi-processed forms
- rural industrialization
- rural development and a decentralization of industries
- creation of employment opportunities and more equitable income distribution
- use of indigenous resources
- earning of foreign exchange resources
- creation of backward and forward linkages with existing industries
- and entrepreneurial development
- they are vital in dispersing new industries & stimulate gainful employment
- quick in assimilating new design trends
- can act as the seedbed for the development of entrepreneurial skills and innovation
MSMEs contribution to the Economy
Employment Size
MSMEs my also be defined by number of employees
Micro - regular employs less than 10 workers
Small - 10-99 workers
Medium - 100- 199 workers
- contribute to the creation of wealth, employment and income generation, both in rural and urban areas, thus ensuring a more equitable income distribution
- provides the economy with a continuous supply of ideas, skills and innovations necessary to promote competition and the efficient allocation of scarce resources
- employs 70% of the workforce
Exports contribution of MSMEs
- MSMEs account for 25% of the country's total exports revenue
- It is estimated that 60% of all exporters in the country belong to the MSME category
- MSMEs was able to contribute in exports through subcontracting arrangement with large firms, or as suppliers to exporting companies
Top 10 Philippine Exports for Small and Medium Scale Bus
1. Woodcrafts and Furniture
2.Agri-Food Products (sugar, banana and rice)
3.Marine Food Products (natural sea salt, seaweed)
4. Coconut Water and By-Products
5. Fish and Shellfish Products
6. Household Items (broom walls, home clock)
7. Clothing and fashion accessories
8. Natural health products (malunggay extracts, virgin coconut oil, organic soal and natural fruit extracts)
9. Processed food and Drinks (Banana Chips)
10. Electronics and Gadgets (microchips)