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The Challenges to SME Market Access in the Philippines and the Role of Business Associations

Published on January 23, 2019

This research report evaluates the relationship between membership in business associations (such as chambers of commerce and cooperatives) and market access for small and medium enterprises (SMEs) in the Philippines, and provides relevant policy recommendations for institutions involved in SME development.

The primary obstacles to market access among Philippine SMEs are: inadequate business operations, human resource constraints, and difficulties complying with international standards and government regulations.
The most commonly cited benefits of business association membership were business advice from organization members, access to expanded markets, increased access to supplies and inputs, better access to pricing information, and increased bargaining power over suppliers.
Additionally, respondents indicated that membership helped them comply with international standards and government regulations, as well as with lobbying and policy advocacy, branding and advertising, and facilitating networking, coaching, and shared services.

Small and medium enterprises (SMEs) represent an important sector in the Philippines. Yet, their productivity remains low compared to larger firms, due in part to limited market access. It has been shown that business associations can help SMEs build capacity, gain market access and grow. Using a survey of 530 SMEs in Metro Manila and a series of key informant interviews with SMEs and business associations, this paper studies 1) the challenges faced by SMEs in accessing markets and 2) the role of business associations in SME development.

Conducted by Dr. Jamil Paolo Francisco and Tristan Canare from the Asian Institute of Management’s Rizalino S. Navarro Policy Center for Competitiveness, this research report is one of three published for the APEC-Canada Growing Business Partnership around the theme of market access, with a focus on the Philippines and other APEC economies.

"According to some respondents, joining business organizations and participating in activities allowed them to establish good relations with other members, some of whom became friends or even business partners. This meant that when one member was in need, others were willing to help where able."