Sunday, Oct 22, 2017
Industry & Trade | Asia-Pacific | Philippines

Nurturing Entrepreneurs in the Philippines

‘Go Negosyo is the prime mover of entrepreneurship in the Philippines’


2 weeks ago

Joey Concepcion, CEO and President of Philippine Center for Entrepreneurship (PCE)
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Joey Concepcion

CEO and President of Philippine Center for Entrepreneurship (PCE)

Go Negosyo is the advocacy group of the Philippine Center for Entrepreneurship (PCE), a non-stock, non-profit organization that advocates for a change in mindset and attitude towards entrepreneurship. In this interview, CEO and President, Joey Concepcion, discusses how Go Negosyo supports the nation’s micro, small and medium-sized enterprises, ASEAN integration and how the Philippines can benefit from Japanese investments

How important it is for this growth to be inclusive and decentralized for the prosperity of the Philippines? 

For the past years, many Filipinos have expressed their dismay with the government for not being able to bring growth across all sectors of our society. While our economic numbers are growing faster than the others in ASEAN, most low-lying communities have not experienced the progress and development. President Duterte has committed to the goal of inclusive growth for the whole country. Like what we always say, our mission is to bring prosperity for all – not just for the selected few in the higher levels of our society, but more so for those who belong in the lower classes.

99.6% of the business community is composed of the micro- and small entrepreneurs. We want them to scale up and to graduate from their current status and move up to the next level. These micro- and small entrepreneurs, when capacitated to grow and thrive, will bring in increased economic development and employment.  In fact, these micro- and small entrepreneurs provide income and job opportunities to the poor and low-income groups across all cities and towns of the member-countries, unlike the medium and large enterprises that mostly operate in urban centers and industrial locations.

 

What role should the private sector and entrepreneurship play in this process? How can they be incentivized to be more active?

The private sector in the Philippines led by Go Negosyo has been largely contributing to the micro, small and medium enterprises (MSMEs) development goals of the government. Part of the 10-point economic agenda of this administration is to help empower the MSMEs in the country with the private sector and the entrepreneurship community as a key partner. We work together in addressing the needs of our MSMEs. If the private sector’s programs will be incentivized, the progress we have now will tremendously grow.

We shall reach the 99.6% entrepreneurs who are continuously in search of progress and prosperity. Hence, the private sector and the entrepreneurs will serve as the drivers of economic growth and employment generation more so as they benefit from the capacity building programs that, likewise, equip them to access similar programs that provide assistance in the areas of technology and finance.  As beneficiaries of these programs, the participating entrepreneurs and the private sector as a whole will actually get to upscale their operations with the valuable assistance provided by the mentors and government focal points. The achieved growth of their enterprises will further usher in increased business and market opportunities for the beneficiaries, starting with those arising from the economic integration of the ASEAN member-countries.

 

What impact do you expect to see from deeper regional integration in macroeconomic terms and how will it affect the real economy?

Deeper regional integration amongst the ASEAN member-countries will be better realized with the mobilization of the MSE-beneficiaries of the program as businesses engaged in inter-country trading of raw materials, labor, finished goods and services. Through it all, increased integrated economic activities will concretely contribute to economic growth in the ASEAN region.

 

And how would you define the current investment climate of the Philippines for foreign investors, especially the famous +3? 

The current investment climate in the Philippines for foreign investors is designed to be welcoming and very friendly. The Philippine Government presents annually the prioritized areas of investments that go with incentives (i.e., tax and duties exemption for the first years) and relevant government agencies are keen to assist investors in setting up their businesses in the country, especially since they bring in jobs and increased economic activities.

While the +3 are our major trading partners, we try to open up to as many other countries.  We also recognize the limitations prescribed in our constitution in opening up to other types of foreign investments. But we are continuously advocating for the easing of these restrictions in less “politically contentious” sectors and industries.

 

The profile of the big 3 varies in their pros and cons, China usually has the big money, Japan has the long-term vision etc. What added-value investment would you want from them?

Our government has crafted our Medium-Term Priority Investment Plan towards sustainable growth.  It is in our mutual interest to have alignment of priorities.  The FDIs that they bring in must be fair and equitable to all contracting parties. 

 

In the light of regional integration, ASEAN-BAC has the mandate to bring businesses of its member states closer together in order to achieve the long-term goal of full economic integration. What are the major challenges you still see in achieving this goal?

First is the reality of the “ASEAN Way” which is to achieve full consensus of the 10 AMS in any of its strategic decisions. Understandably, the process of translating ideas to decisions and further down to execution will take more time than desired. 

Second is the development gap that exists between the more advanced members of the ASEAN and the rest. While integration is being pursued, these advanced states will surely aim for even higher levels of economic development and sophistication which could make the gap wider. So, the importance of having a clear plan and strategy for faster catch up by CLMV member states will have to be in place and given strong support.

Third is the political will that will have to drive the integration process. There are political realities that each government faces that puts at risk their capability to stay in power or be out voted. This is where the natural pressure towards protectionism and return to looking inward comes in. All these three in varying degrees will slow down the pace and depth of integration.

 

The Philippines is known for its tycoons and big holdings as reflected on the Asia 300, What are the benefits of further regional integration and how can they or should they expand their ecosystem to include MSMEs to better redistribute the economic gains?

The big corporations in the Philippines which we call “big brothers” are encouraged to integrate an inclusive business model in their businesses in order help the “small brothers” or the MSMEs. Through Go Negosyo and the companies which have implemented IB systems, we are promoting the valuable advantages of including MSMEs in their value chains. Go Negosyo will soon be releasing a book featuring 80 inclusive business companies in the country. We aim to encourage all entrepreneurs, regardless of their size, to collaborate and help one another in reaching success. 

Regional integration offers ways to further lower the costs of their raw materials, labor and necessary overheads and to expand the markets for the products and services of the big brothers.  Along the way, the same big brothers are encouraged to tap the micro- and small enterprises as suppliers of their needed raw materials and semi-finished products and as distributors of their finished products and services. Being big brothers affords them the opportunity to help micro- and small enterprises, fortifies their value chains and boosts their contribution to the local economies.

 

How would you describe the current situation of entrepreneurship in the Philippines and its evolution?

When we started Go Negosyo in 2005 as a private organization, entrepreneurship was not the popular career option of many Filipinos. Since then, we have been mentoring thousands of aspiring and start-up entrepreneurs through our caravans, seminars, forums, books and our media platforms.  Twelve years later, we are proud to say that Go Negosyo is one of the most recognized entrepreneurship organizations in the country.

Go Negosyo has come a long way in inspiring and empowering MSMEs. MSMEs receive business tips and strategies first hand from the wide network of successful entrepreneurs.  Then in August 2017, the advocacy of entrepreneurship and MSME development was further bolstered by the Public-Private Partnership forged by the Philippine Department of Trade & Industry and Go Negosyo.  This partnership now undertakes to successfully implement the mentorship program that aims to upscale micro- and small enterprises (MSEs) through capacity building activities that include orientations on other ongoing government programs and laws that have all been designed to address the plight of micro and small enterprises, especially the startups that normally do not survive the first year/s of operations.  

Furthermore, the government services for MSEs are made accessible to the intended beneficiaries through the establishment of Negosyo Centers in over 1,500 municipalities, towns and cities across the Philippines.  These centers are manned by business advisers that are mandated to promote ease of doing business and to help MSEs access government services.

 

In its baby-boom era, Japan was the embodiment of entrepreneurship which gave rise to corporations such as Sony, Nintendo, Sega, to name a few. In the mid-90s, that spirit was lost which gave way to the famous lost two decades. The Japanese Government is implementing initiatives such as the JPX Nikkei 400 to regain that spirit but in the meantime, what synergies do you see between the Japanese private sector and Filipino startups, where is the win-win?

The Filipino startups and MSEs still have a long way to go in mechanizing their operations as a necessary key towards scaling up and improving their productivity and efficiency.  In this regard, the Japanese private sector has much to contribute to the development of the Filipino startups and MSEs with their offerings of equipment and machineries together with the necessary technical training. Japan also stands to be a lucrative market for the Philippine exports, especially fresh and processed food products.

 

Mentorship, education, retraining, transfer of know how are all tools for social inclusion and reduction of poverty. Japan is characterized for its sustainable approach to FDI, and can they help and be incentivized in moving agriculture to agroindustry or even manufacturing to added-value manufacturing.

Definitely. In fact, we are pleased to say that the ASEAN Japan Innovation Network has been established early this year so ASEAN’s industries and emerging business enterprises can leverage on Japan’s advanced technologies and innovation. The priorities and roll-out strategic plan are now being developed to address the key needs of ASEAN business, especially the MSMEs and industries.

 

What is the role of Go Negosyo as a vehicle for entrepreneurship in the country and what are the programs that are most important sustainable development?

Go Negosyo is the prime mover of entrepreneurship in the Philippines. Currently, Go Negosyo has partnered with the Department of Trade and Industry for the Kapatid Mentor ME which is a weekly mentoring program held in many Negosyo Centers nationwide. Since its establishment in 2016, more than 200 MSMEs graduated from the 10-week program. For the first half of 2017, more than 1500 MSMEs were enrolled in the program.

We now have 400 accredited mentors. Aside from Mentor ME, Go Negosyo is also leading the Alliance Towards Prosperity for All which is a long-term private sector-led campaign at the national level to build a multi-sectoral, multi-disciplinary alliance of organizations and individuals to pursue prosperity for all among the ASEAN nations. This alliance will be an active collaboration which will help create sustainable programs for MSME development.  Indeed, Go Negosyo has inspired would-be entrepreneurs to pursue their dreams and has guided startups and MSEs as they deal with the challenges and problems of business management. Its Kapatid Mentor Me Program is seen to concretely establish the places of MSEs in sustainable value chains of medium and large enterprises, thereby upscaling them and enabling them to contribute more to local economies and the number of locally available jobs, especially in the poor regions of the country.

 

The most critical and important question for MSMEs and start-ups is where to get funding due to the lack of collaterals. How will ASEAN and the Philippines be able to address this issue and how will the public and private sector be able to work together on this?

Currently, there are several government programs which provide financial and technical assistance to many MSMEs. The Department of Trade and Industry (DTI) recently launched the P3, or ‘Pondo Para sa Pagbabago at Pag-asenso’, which provides micro-finance to our MSMEs. For this year, 1 billion pesos ($19 million) is allotted for this program.

Additionally, DTI offers the Shared Service Facilities (SSF) which provides tools and equipment shared by members of cooperatives or entrepreneurship associations that is expected to aid them in increasing their production and improve their competitiveness. The Department of Science and Technology has a similar program which is called the Small Enterprise Technology Upgrading Program (SET-UP) and provides technologies to entrepreneurs to improve their operations. Since 2003, DOST has assisted more than 3,000 small businesses through this program.

The agriculture sector also receives assistance from the Department of Agriculture through its Agricultural Modernization program which gives farmers and fishermen access to agricultural equipment and other technical support.

The Department of Social Welfare and Development through its Conditional Cash Transfer Program provides assistance to extremely poor families. While this provides an alternative financial support, it has not proven its capacity to aid enterprising individuals to scale up.

For the private sector, we are continuously promoting our entrepreneurship development programs which influences microfinance institutions and banks to improve their lending programs for micro and small entrepreneurs. Several banks have developed financial assistance to fit the requirements of MSMEs. In fact, a number of private banks have signified their intent to offer uncollateralized loans and other financial packages suited to the needs of beneficiaries of the Kapatid Mentor Me Program.  The latter has, therefore, served to boost the bankability of startups and MSEs that hitherto have mostly been unable to access bank services.https://ssl.gstatic.com/ui/v1/icons/mail/images/cleardot.gif

 

How would you describe the role of the ASEAN Business Advisory Council as an enabler for entrepreneurship in the country and what are the programs that are most important for sustainable development?

The ASEAN Business Advisory Council under the Philippine chairmanship has been an active force in empowering micro and small entrepreneurs. For 2017, the ASEAN BAC focuses its programs on MSME development. One of the programs of ASEAN BAC is the ASEAN Mentorship for Entrepreneurs Network (AMEN) which creates a pool of mentors from the 10 member countries who will guide and mentor the micro and small entrepreneurs across the region. AMEN will also serve as a platform for the development of teaching modules for MSME empowerment which will be shared to all ASEAN countries.


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