More MSMEs aware of ASEAN integration, utilize FTAs

By Kris M. Crismundo

MANILA, Nov 23 (PNA) — Micro, small and medium enterprises (MSMEs) are now more aware of the ASEAN integration and use free trade agreements (FTAs), Department of Trade and Industry (DTI) Assistant Secretary Rafaelita Aldaba said.

Aldaba, during a conference in Makati City on Monday, mentioned the ongoing survey conducted by DTI and the Philippine Statistics Authority (PSA) found out that 50 percent of MSME respondents are aware of the ASEAN integration while 40 percent of the respondents are utilizing FTAs.

The survey, which is expected to be completed next month and to be presented to stakeholders early 2016, has a total of 1,000 respondents from Metro Manila, Central Luzon, Region IV-A, Iloilo, Cebu, and Davao.

To date, DTI and PSA tabulated answers from 800 out of the total respondents.

“We find the results encouraging,” said Aldaba comparing the survey to results of prior studies in which ASEAN integration awareness and FTA utilization among MSMEs were low.

She added that past studies showed that FTA utilization among Filipino MSMEs was only at around 30 percent.

She noted that lack of information, cost of cross-border trading, and complex rules of origin were top reasons of MSMEs for not tapping trade deals.

Among the FTAs which the Philippines is involved, ASEAN Trade in Goods Agreement (ATIGA), ASEAN-China FTA and ASEAN-Japan FTA were widely used by local SMEs.

Other than these trade deals, the Philippines has FTAs with Australia and New Zealand, South Korea, and India through the ASEAN+1 FTAs and has one bilateral FTA with Japan.

Moreover, Aldaba said the survey result will serve as an assessment for government programs for SMEs and also to help the government in identifying proper programs and policies to increase MSMEs participation in the global value chains.

Under the MSME Development Plan 2011-2016, the government targets the sector to increase its contribution to total value added to 40 percent and generation of two million jobs by 2016.

“SMEs form the backbone of the economy accounting for more than 99 percent of all enterprises in the country and employing more than 63 percent of the domestic workforce. However, MSMEs’ share of gross domestic product is only 31 percent and their contribution to total direct manufactured exports is merely 10 percent,” Aldaba noted.

“For us to achieve inclusive growth and benefit from rising globalization, it is important to create a space for MSMEs and focus on making them internationally competitive to integrate in GVCs,” she stressed. (PNA)