Some of the country’s company officials said the Philippines should focus first on providing capacity to domestic-oriented enterprises such as the micro, small, and medium enterprises (MSMEs) to promote economic inclusion.
Officials from Aboitiz InfraCapital, International Container Terminal Services Inc. (ICTSI) and Makati Business Club (MBC) believe that the government and private sector should ensure that the country’s MSMEs would be given the opportunity to produce in an “efficient manner.”
“We need to connect them in a way that the flow of goods from them, whether in the domestic market or international is transparent and known,” Christian Razon Gonzalez, Executive Vice President and Chief Risk Officer of ICTSI said during the Pilipinas Conference 2022 last Tuesday in Makati City.
Gonzalez illustrated the situation of small merchants in the country, citing lack of access to information. The ICTSI official emphasized that the country should prioritize how domestic-oriented enterprises run their businesses instead of pouring all the attention into attracting foreign investors.
“Every MSME right now has no bloody idea how much it’s going to cost them tomorrow to import what they need to produce the product. They don’t know what the truck is gonna cost, they don’t know what they’re gonna have to pay to the LGU [local government unit]. They know none of this so it’s a crapshoot,” Gonzalez said on Tuesday.
“And you know, if foreign investors, we keep talking about giving foreign investors all this transparency and incentives and honoring their contracts, what about all the locals? We should start there and we need to find a way to get all information whether government or private sector get it out there that is clear and transparent, and there is certainty in order to run their business efficiently in order for them to price their goods reasonably,” the ICTSI official added.
Meanwhile, Rizalina Mantaring, treasurer of Makati Business Club (MBC) and former CEO and Country Head of Sunlife Philippines, agreed with Gonzalez, saying that MSMEs lack the capacity to do business in the country.
“I agree with clarity, transparency, because it’s very hard to do business when you don’t know what the rules are. And particularly for MSMEs, the capacity isn’t there. They don’t have the capacity to hire lawyers and accountants the way the larger companies would,” Mantaring said.
In relation to providing capacity to MSMEs, Cosette Canilao, CEO of Aboitiz InfraCapital, said the country’s small merchants should be included in the digitalization efforts of the government.
“For the MSMEs, we have to include them in providing digital access. Digitalization of government processes will not just benefit the foreign investors but most especially the MSMEs that will promote economic inclusion,” Canilao said.
Meanwhile, Mantaring and Gonzalez also talked about building the capacity of the country’s manufacturing sector to boost local production. The business officials underscored the need to build the country’s infrastructure to ensure that the flow of goods both in the domestic and international markets would be unhampered.
“In order to attract foreign investment in manufacturing, you have to have a privatization and infrastructure program that’s driven by a broader strategy. Right now in this country, infrastructure privatization is done piecemeal in isolation and someone has an unsolicited proposal there, someone wants to build something over here, the government wants to invest there, for what purpose?” Gonzalez said.
“Where is the masterplan of creating industrial zones in areas that are already connected to the global market? Where is the masterplan to create infrastructure in places that will later become sites for investment in commercial areas that will be meant to be connected to the global market? Unless we start thinking based on a broader infrastructure plan, and move out of this isolated system of privatization and building infrastructure, frankly we will not accelerate investment nor manufacturing in a way we all want,” the ICTSI official pointed out.
Mantaring, for her part, said “When you talk of markets whether it’s domestic or foreign, you also talk of supply chains. And we really need, one big factor for manufacturers…the cost of transport so we really need to be able to build our infrastructure to be able to bring goods from the remotest areas in the Philippines to all the cities and vice versa so it can build a much more efficient operation if your transportation is reliable and it’s cost-effective.”