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5 Government Programs for MSMEs in the Philippines

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The Philippines is a country that literally thrives on the entrepreneurial spirit. With 99.5% of all businesses in the country being micro, small, and medium enterprises (MSMEs) according to the Department of Trade and Industry (DTI), small businesses are practically the local economy’s lifeblood, pouring in 35.7% of total value-added.

That’s why the Philippine government has long thrown its support toward the development of MSMEs in the country. They know the value of forging one’s own fortune through owning and running a business, which is why they’ve created several programs that help individual entrepreneurs get a leg up on their dreams and sustain themselves.

This article takes a look at five government programs for MSMEs in the Philippines, designed to give budding entrepreneurs a little push in the right direction. 

Government Programs for MSME owners in the Philippines

Small and Medium Enterprise Roving Academy

Do you have a small business and don’t know how to take it to the next level? Do you have goals of becoming more competitive domestically, or maybe even expanding your trade to international markets? There’s a government program for an MSME owner like you.

DTI has the Small and Medium Enterprise Roving Academy (SMERA), a continuous learning program for the development of MSMEs in the Philippines. SMERA is a partnership and mentorship with the DTI, where business owners participating in the program get paired with a counselor and an expert who advise them on training and business development services they may need.

Mentorship is an invaluable resource for any entrepreneur. Whether you get that guidance from books or from the direct advice of people who have made it big, the mentorship that a government program like SMERA can offer can make you a better business owner.

With trained experts guiding you in every step, growing and improving your MSME in the Philippines will be easier than ever. Any business owner can get help from SMERA – simply contact the DTI’s Bureau of Small and Medium Enterprise Development at bsmed@dti.gov.ph. 

Pondo sa Pagbabago at Pag-Asenso (P3)

One big problem for new MSME entrepreneurs is quick access to capital, but the government solves this with the Pondo sa Pagbabago at Pag-Asenso (P3) program.

This DTI program, which translates to the Fund for Change and Growth in Tagalog, helps entrepreneurs by streamlining and simplifying the loan process.

Getting start-up capital is usually a hurdle for entrepreneurs as banks often won't lend to them because they're new business owners, leading to fears that their loans won't be paid. P3 gets around this by encouraging and incentivizing other alternative sources of loans and funding for entrepreneurs, such as microfinance institutions (MFIs).

Under P3, MSME owners in the Philippines can borrow anywhere from P5,000 up to P200,000 – enough to get them started on a small business – from the DTI with a low-interest rate of 2.5% per month. On top of this, P3 also provides business owners with extra financial knowledge for their own benefit.

A P3 loan is accessible to all Filipino MSME owners and budding entrepreneurs. Figure out what you want your business to be all about (here are some opportunities to consider, especially in 2021). Once you’re ready, simply download and fill up the application form on the Small Business Corporation (SBC) website at www.sbgfc.org.ph and submit it to any SBC office or DTI Negosyo Center – and get the funds you need in 12 business days! 

Barangay Micro Business Enterprise

Recognizing that microbusinesses keep a lot of communities thriving, especially in remote and suburban areas, the government signed the Barangay Micro Business Enterprise (BMBE) Law in 2002. The benefits under this law help out microentrepreneurs in the Philippines by giving them incentives to help run their small businesses.

When entrepreneurs register as a BMBE, they get to enjoy several benefits. They are granted the following:

  1. Exemption of coverage from the minimum wage law
  2. Income tax exemption
  3. Social security and healthcare benefits
  4. Priority for a special credit window
  5. Assistance programs and training

Officially registering as a BMBE reduces the amount of taxes, fees, and charges you’ll need to deal with at the start of setting up a business.

Your business can qualify as a BMBE if it meets the following criteria:

  1. It's under production, processing, manufacturing, trading, and services.
  2. Total assets of less than P3 million (excluding the value of the land).
  3. You are not a duly licensed professional (with regard to the products or services your business provides).
  4. It is not a branch or franchise of a large-scale enterprise.

If you’re interested in registering as a BMBE, you can find out more and download the application form from the DTI website. Fill it up and submit it, along with your DTI registration for sole proprietorship, at your nearest DTI Negosyo Center. 

KAPATID MENTOR ME

Sometimes, what entrepreneurs need more is the guidance to run their business the right way, as well as the network to help it get off the ground. The DTI’s KAPATID MENTOR ME program helps with this by providing MSMEs free education and training and then assists them by linking them to bigger companies.

This government program gives both established and new business owners in the Philippines the necessary knowledge, advice, skills, and connections to run and grow a business.

The KAPATID MENTOR ME program consists of three main components. First is a 12-week program that covers the following modules:

  • Product development
  • Operations management
  • Accounting
  • Taxation
  • Finance and obligations
  • Contracts
  • Marketing

Upon completing the modules, mentees then showcase what they've learned through business presentations before graduating.

The second component is the Adopt-an-SSF (Shared Service Facility) program, which links these microentrepreneurs to SSFs, such as equipment, systems, and tools, in their community. This is especially important if you don’t have the capital to acquire your own service facilities.

The third component is the Inclusive Business model, which slots these small businesses into larger companies’ value chains. This basically guarantees the MSME with work and a market that requires their products or services.

The KAPATID MENTOR ME Program is open to all business owners and heads/managers of microenterprises (with total assets less than P3 million) who have been operating for at least one year. To find out more about how to join this government program and the requirements you’ll need, check out the DTI website linked above or inquire at your nearest DTI Office or Negosyo Center. 

Go Lokal!

So, you’ve gotten help on the financial side, you have something great on your hands, and now you’re aiming higher. You need to know where to sell your products, especially if you want to sell and earn a lot more.

DTI can also help you there with their Go Lokal! Government program, which brings locally made products to Go Lokal! partner stores and retail establishments all over the Philippines, such as Ayala Malls, Rustan’s, Duty-Free, Robinsons Malls, and a lot more.

The access that Go Lokal! can give is best for MSMEs with unique products looking for a broader market, especially those made from regional and local traditions. (These stories of small business wins can also inspire you to take that big next step, in case you needed a little nudge.)

Interested MSME owners can apply to be a Go Lokal! supplier by downloading all the necessary application forms from the website and submitting the requirements to your nearest DTI Office or Negosyo Center. 

Get your business off the ground today

With this readily accessible support from these government programs for MSMEs in the Philippines, any small business owner can start their dream enterprise, earn for themselves, and join the millions supporting the country’s economy. There has really never been a better time to begin!

If you’re ready to go but haven’t started on that idea yet, it’s time to put together a business plan and launch your own online business.

 


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