With the tougher competition they expect to face with the upcoming integration of ASEAN economies in 2015, Philippine small and medium enterprises (SMEs) need all the help they can get to sustain their growth and boost their competitiveness.
Assistance should include financial services from non-bank institutions.
Speaking at the ASEAN integration forum organized by the Ateneo Professional Schools last month, Asian Development Bank (ADB) director for regional economic integration Arjun Goswami said that non-banks are needed to serve SMEs because commercial banks do not accept non-land assets as collateral for loans.
Trade Assistant Secretary Rafaelita Aldaba agreed that investing in non-bank financial institutions would provide SMEs a window to innovate, to move up, and contribute a more sophisticated output.
Such institutions would include micro-finance institutions, money lenders, pawn shops, insurance firms and currency exchanges.
Senator Benigno “Bam” Aquino said that support for SMEs is important because, as trade barriers are taken down , local SMEs might be at the losing end due to lower prices of goods offered by its neighbors.
Aquino added that support for SMEs could also come in the form of investments in social enterprise and corporate social responsibility projects (CSR).
Elevating the economy’s supply chain should be seen as a national commitment rather than just one consideration in the looming sub-regional economic integration, he stressed.
“With or without the AEC (ASEAN Economic Community), we owe it to ourselves to be able to push for that inclusive growth. This is the best time to do that in our economy because we are in that ‘sweet spot.’”
Photo: From brazworld.org