Published in the Manila Bulletin, 12 March 2006, two weeks after a State of Emergency was declared due to political unrest.
The Emergency Revolution
IT’S WHAT YOU DO in a State of Emergency that reveals where your priorities lie.
For President Gloria Arroyo, that meant taking the time last February 25 to rally the troops at the "Go Negosyo" Entrepreneurial Fair.
Accompanied by Presidential Adviser on Entrepreneurship Jose Concepcion III, and Presidential Adviser on Job Creation Arthur Yap, the President was warmly greeted by both aspiring and established entrepreneurs, who she referred to as "patriots," creating livelihood opportunities and feeding families.
Entrepreneurial development is key to the President’s 10-point program of governance.
According to the Department of Trade and Industry, Entrepreneurial Small and Medium Enterprises (SMEs) ensure a more equitable distribution of income, disperse economic activity to the countryside, and are a potent force in the war against poverty.
SMEs account for 99.6% of firms registered nationwide, and employ 69.9% of the labor force.
But why focus on entrepreneurship?
For one, entrepreneurial start-ups are amazing creators of economic value, in percentage terms, start-ups create more economic value than any other stage of the business life cycle.
Seasoned entrepreneurs can start up valuable businesses with nothing more than a business plan, creating a return on investment approaching infinity. Quite an advantage for a country that is perennially starved of capital.
Second, because of OFW remittances, we have one of the highest savings rates of any country in the world at 28%.
By actively promoting entrepreneurship, we provide channels for the conversion of savings and overseas remittances into productive enterprises, creating opportunities and jobs.
Republic Act 9178, The Barangay Micro Business Enterprises Law (fondly known as the BaMBE Law) is the cornerstone of the government’s SME program.
Under this Law, businesses capitalized below Three Million Pesos are eligible for Income Tax Holidays, access to preferential credit (from Land Bank, DBP, the Small Business Guarantee and Finance Corporation, and the People’s Credit and Finance Corporation), listing in the Local Government’s BMBE directory, and other perks.
To qualify as a BMBE, all you need to do is fill out the BMBE form downloadable from the DTI website (http://www.dti.gov.ph click on the "SME Agenda" Link along the lower left column), and submit it together with your business registration documents to your City or Municipal Treasurer, and pay the BMBE registration fee.
One note on the BMBE Program: Not all local governments are aware of it, and even among those that are, offices in some LGUs pretend it doesn’t exist.
Make sure you speak directly with the City Treasurer’s Office. They are the implementing office at the local level, but if you still have problems, contact DTI’s SME Center in your region.
A directory can be found on DTI’s website.
To help you out on your entrepreneurial venture, the government has volumes of information and technical assistance for you.
From DTI’s SME Agenda home page, you can find a startup business plan, a document with the programs and services for SMEs, and the 2004-2010 Development plan for SMEs. Review these documents for a guide on the specific programs you can avail of.
From the Technology and Livelihood Resource Center Home Page (http://www.tlrc.gov.ph), you can find training resources, class schedules, and other useful information. TLRC’s offerings are good investments for anyone serious about starting a business.
From the DOST home page (http://www.dost.gov.ph), find the training catalog of the technology training center, and links to free software for your business.
Most startup businesses can’t afford the prices of commercial software, but don’t be tempted to use pirated software — piracy is illegal and will get you into trouble sooner or later.
Use DOST’s Bayanihan Linux or Ubuntu Linux, the free OpenOffice.org suite, and other free software for Windows and Macintosh.
Other sites that are useful for SMEs are the Cottage Industry Technology Center, UP- Institute of Small-Scale Industries, the Technical Education & Skills Development Authority, and the DBPs SME page.
The National Government’s programs to promote entrepreneurship are a great start, unfortunately, these may not yet be enough.
SMEs contribute a mere 32% in value added to GDP, an under-performance compared with Japan (56%), China (60%), South Korea (46%), and Indonesia (63%).
For many small entrepreneurs, the only government they see is at the local level, yet how many local government units (LGUs) actively promote the National SME Agenda?
Many have job fairs, hoping to earn points with the hungry masses, yet few have activities that promote genuine entrepreneurship and true livelihood opportunities for their constituents.
The Barangay Micro Business Enterprise Law encourages local governments to take a pro-active stand towards entrepreneurship by simplifying registration procedures and creating a directory of registered microbusiness enterprises.
Many LGUs have simple enough registration procedures, but how many LGU websites have directories of BMBE’s?
Hardly any.
City and municipal treasurers both inside and outside Metro Manila lament that although their office implements the BMBE Law by issuing certifications, other offices in some LGUs are hardly enthusiastic about it, reluctant to promote it, with others even discouraging businesses from availing of it.
Another issue for small businesses is the cost of administrative compliance.
Any duly registered business has to make two filings with the BIR each month, four filings a year with the Local Government, and about half a dozen other filings a year with relevant agencies.
For medium and large scale businesses, the cost of compliance is negligible, but for the MicroEntrepreneur with limited resources, compliance costs can be debilitating and a bane to the productivity of the microenterprise.
Perhaps in the spirit of the BMBE Law, offices such as the BIR can limit these filings to once a quarter for BMBE certified businesses.
It will be a great help to micro-businesses and may even improve the tax take.
For the National Government’s proentrepreneurship program to be efective, it's important that the programs reach the frontlines.
Pitting these resources online is a great start: It conveniently circumvents any obstacles between the programs and their intended audience; but ultimately it is the enthusiastic involvement of LGUs and regional offices of government that will determine the success of the SME agenda.
State of Emergency or not, we are in a crisis, and we need a revolution to resolve the crises of poverty and lack of opportunity.
Entrepreneurship is that revolution: and Revolution that involves us working hand-in-hand with the National Government’s pro-SME agenda.
Any lesser agency, regional authority, or local government office that hinders this cause should be stomped on like the so many cockroaches that they are. They are the real cause of poverty.
