Private Sector Promotion

Programme description

Title: Private Sector Promotion
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Philippines
Lead executing agency: Department of Trade and Industry (DTI)
Overall term: 2003 to 2012

Context

More than 99 per cent of all business establishments in the Philippines are micro, small or medium-sized enterprises (MSMEs). Collectively, these enterprises are of key importance for the Philippines’ economic development, particularly in rural areas. MSMEs provide some 66 per cent of all employment opportunities, and thus have great potential for alleviating poverty. However, the growth and competitiveness of MSMEs are hampered by an unfavourable business and investment climate.

The enterprises have to overcome many bureaucratic hurdles and are impeded in their development not least by the lack of coordinated, demand-oriented public and private services and financing opportunities. Within the context of the Private Sector Promotion Programme of the German Federal Ministry for Economic Cooperation and Development (BMZ), GIZ has worked with the Philippine Department of Trade and Industry (DTI) and other national and international partners to remove these barriers and to exploit previously untapped potential with a view to strengthening the backbone of the Philippine economy.

Objective

The business and investment climate in the programme region – the Philippines’ central islands, the Visayas – has improved, with the DTI implementing development measures throughout the country Long-term competitiveness has improved in selected municipalities and sectors, such as tourism and bamboo processing, as well as in the creative sectors, such as the production of designer furniture, fashion accessories and gift items.

Approach

The programme has supported the Department of Trade and Industry in its strategic measures to create a favourable business and investment climate and has promoted the inclusion of issues such as gender equality, migration, climate change, ecological growth and corporate social responsibility.

The programme advised the Philippine partners intensively on technical and organisational questions and promoted systematic dialogue between the government, private sector, local authorities, service providers and development partners on political and strategic measures. At the same time, the programme supported local authorities and other local actors in implementing a strategy for local and regional economic development (LRED), encouraging MSMEs, trade associations and private service providers to adopt a value chain (VC) approach.

Results achieved so far

  • A total of 84 municipalities in the Visayas have received local and regional economic development support.
  • An independent impact assessment of 24 cites and municipalities was carried out towards the end of the project. This revealed that in 16 cities or municipalities, new investments had increased by at least ten per cent, usually more, and in some cases there were remarkable increases.
  • Of 18 opinion leaders polled, 14 confirmed that there had been a significant increase in the capacity of the MSME sector in the Visayas. All 18 confirmed that women were increasingly taking up business opportunities in the MSME sector.
  • 169 MSMEs, of which 55 per cent are owned or managed by women, were polled on the value chain approach that had been promoted. 62 per cent of enterprises had achieved an average increase in annual turnover of 11 per cent since 2010.
  • The Department of Trade and Industry fulfils its strategic role in planning and allocating public resources for economic development more efficiently. At national and subnational level, it places greater emphasis on competitiveness and the equal participation of men and women in economic development in carrying out MSME promotion strategies.

Additional information