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Integrating SMEs into the East Asian Region: Philippines

Author

Listed:
  • Medalla, Erlinda M.
  • Aldaba, Rafaelita M.
  • del Prado, Fatima
  • Yasay, Donald B.

Abstract

The paper aims to examine the characteristics and factors that constrain the growth of SMEs that are operating within and outside production networks. Based on a survey of 101 firms, the analysis shows that SMEs are not homogeneous. While they share certain characteristics such as age, Filipino ownership, and foreign equity share; they differ in terms of performance export intensity, interest rates on borrowings, major sources of finance, and other economic indicators. The results also show that participation in IPNs benefits SMEs particularly parts and components makers in the electronics and auto industries. In terms of performance, IPN firms have higher mean growth rate and mean labor productivity than non-IPN firms. In terms of barriers to growth, IPN firms are primarily concerned with product and price barriers and difficulties in establishing and maintaining trust with business partners while non-IPN firms’ major concerns are tax, tariff and nontariff barriers and the country’s deteriorating business environment. Two themes dominate SMEs’ concerns on the type of assistance needed. For IPN firms, financing assistance would be crucial while for non-IPN firms, technology development would be the most important.

Suggested Citation

  • Medalla, Erlinda M. & Aldaba, Rafaelita M. & del Prado, Fatima & Yasay, Donald B., 2010. "Integrating SMEs into the East Asian Region: Philippines," Discussion Papers DP 2010-31, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2010-31
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    File URL: https://www.pids.gov.ph/publication/discussion-papers/integrating-smes-into-the-east-asian-region-philippines
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    References listed on IDEAS

    as
    1. Austria, Myrna S., 2006. "Enhancement and Deepening of the Competitiveness of the Philippine Electronics Industry Under a Bilateral Setting," Discussion Papers DP 2006-09, Philippine Institute for Development Studies.
    2. Myrna S. Austria, 2006. "Enhancement and Deepening of the Competitiveness of the Philippine Electronics Industry Under a Bilateral Setting," Trade Working Papers 22610, East Asian Bureau of Economic Research.
    3. Emilio T. Antonio Jr. & Ma. Cherry Lyn S. Rodolfo, 2006. "Assessment of Competitiveness and Logistics Infrastructure of the Philippine Garments Industry," Trade Working Papers 22609, East Asian Bureau of Economic Research.
    4. Rodolfo, Maria Cherry Lyn S. & Antonio, Emilio Jr. T., 2006. "Assessment of Competitiveness and Logistics Infrastructure of the Philippine Garments Industry," Discussion Papers DP 2006-08, Philippine Institute for Development Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Khor, Niny & Sebastian, Iva & Aldaba, Rafaelita, 2013. "Enterprises in the Philippines: Dynamism and Constraints to Employment Growth," ADB Economics Working Paper Series 334, Asian Development Bank.
    2. Israel, Danilo C. & Medalla, Erlinda M. & Milo, Melanie S. & Aldaba, Rafaelita M. & Briones, Roehlano M. & Llanto, Gilberto M. & Rosellon, Maureen Ane D. & Galang, Ivory Myka R. & Navarro, Adoracion M, 2013. "The ASEAN Economic Community and the Philippines: Implementation, Outcomes, Impacts, and Ways Forward (Full Report)," Discussion Papers DP 2013-01, Philippine Institute for Development Studies.
    3. Aldaba, Rafaelita M., 2012. "Small and Medium Enterprises` (SMEs) Access to Finance: Philippines," Discussion Papers DP 2012-05, Philippine Institute for Development Studies.
    4. Aldaba, Rafaelita M., 2013. "ASEAN Economic Community 2015: SME Development - Narrowing Development Gap Measure," Discussion Papers DP 2013-05, Philippine Institute for Development Studies.

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