 Entrepreneur must know and monitor the

business environment on a daily basis.

 Population trend
 Peace and order
 Politics
 Economics
 Social
 Technical and technological situations
 Government policies
 Global environment
 Relative ease in setting up
 Employment generation
 Flexibility and lower capital cost per job
 Provision for niche services that may not be
profitable for large businesses
 Distribution of income
 Utilization of local resources
 Export earnings
 “Seedbed” for entrepreneurs
 The 2016 List of Establishments of the
Philippine Statistics Authority (PSA) recorded
a total of 915,726 business enterprises
operating in the Philippines. Micro, small and
medium enterprises (MSMEs) account for
99.57% (911,768) of the total establishments,
of which 89.63% (820,795) were
microenterprises, 9.50% (86,955) were small
enterprises, and 0.44% (4,018) were medium
enterprises. Large enterprises made up the
remaining 0.43% (3,958).
 MSMEs generated a total of 4,879,179 jobs in
2016 versus 2,831,729 for the large
enterprises. This indicates that MSMEs
contributed almost 63.3% of the total jobs
generated by all types of business
establishments that year. Of these, 30.4% or
2,345,992 jobs were generated by micro
enterprises; 25.7% or 1,981,316 by small
enterprises; and 7.2% or 551,871 by medium
enterprises.
 MSMEs account for 25% of the country’s total
exports revenue. It is also estimated that 60%
of all exporters in the country belong to the
MSME category. MSMEs are able to contribute
in exports through subcontracting
arrangement with large firms, or as suppliers
to exporting companies.
 MSMEs are defined on the basis of total asset
value and number of employees.
 MSMES are subdivided into three categories:
 Micro enterprise
 Small enterprise
 Medium enterprise
 Category Total Assets No. of Employees

Micro Enterprise 3,000,000 or less 1–9

3,000,001-
Small Enterprise 10 – 99
15,000,000

15,000,001 –
Medium Enterprise 100 – 199
100,000,000
R.A. 9501: Magna Carta for Micro, Small and Medium Enterprises
 Competition in export markets, and influx of
mass-produced products at cheaper prices
 Existence of small domestic markets and
limited local market
 Need for imported parts and materials and
limited industrial linkages
 Lack of basic management techniques
 Barriers to start up businesses, lack of support
in the areas of fund-raising and research and
development
 Limited economic activities at the local level.
 Outmoded, less productive methods of operation
 Inefficient use of appropriate technology
 Limited ability to gain economies of scale
 Insufficient and inaccessible financial resources
 Unappreciated and inadequate professional
services
 Insufficient incentives and inability to meet
regulatory procedures
 Insufficient access to information
 Low access to capital
 Low fixed assets and profitability
 Inadequate knowledge of markets and narrow
access to markets
 The Department of Trade and Industry,
through its Bureau of Micro Small and
Medium Enterprise Development (BSMED), is
the primary government organization
mandated to promote, support and spur the
growth and development of MSMEs in all
productive sectors of the economy.
 The University of the Philippines Institute for
Small Scale Industries (UP ISSI)
 The Small Enterprises Research and Development
Foundation (SERDEF)
 CHED’s Programs on Entrepreneurship
 Go Negosyo
 Entrepinoy Volunteers Foundation, Inc.
 PinoyME Foundation
 Entrepreneur Philippines
 YES Philippines
 The Go Negosyo Act
 The Barangay Micro Business Enterprises
(BMBE) Law
 The Magna Carta for Small and Medium
Enterprises
 This law seeks to promote “job generation and
inclusive growth through the development of
micro, small and medium enterprises in the
country.
 The most salient feature of the law is the
establishment of “Negosyo Centers” in all
provinces, cities and municipalities to promote
ease of doing business and facilitating access
to services for MSMEs within their jurisdiction.
 They assist in the following area:
 Technology transfer
 Production and management of training programs
 Marketing assistance
 This was enacted to hasten the country’s
economic development by encouraging the
formation and growth of barangay micro
business enterprises and integrating those in
the informal sector with the mainstream
economy.
 A barangay micro business enterprise – refers
to any business entity or enterprise engaged in
production or commodities, including agro-
processing, trading and services whose total
asset shall not be more than 3 million pesos.
 Any qualified person (natural or juridical),
cooperative or association may apply for
inclusion in the BMBE registry of a city of
municipality.
 Exemption from taxes and fees.
 Exemption from minimum wage law.
 Specific assistance programs: technology
transfer, production, management training
and marketing assistance.
 Access to credit.
 The Magna Carta for SMEs or RA 6977 was
passed in 1991, and amended by RA 8289 in
1997, and by RA 9501 in 2008.
 The law is considered a landmark legislation
which reflects the current national policy to
foster a dynamic SME sector, particularly
rural and agri-based manufacturing ventures.
The law is guided by three principles in setting
the pace for SME development:
1. Minimal set of rules and simplification of
procedures and requirements.
2. Participation of private sector in the
implementation of SME policies and
programs.
3. Coordination of government efforts.
 Creation of the Small and Medium Enterprise
Development Council
 Creation of the Small Business Corporation
 Mandatory allocation by lending institutions
of a portion of their loan portfolio for
lending to small and medium enterprise.