With its long-term commitment to MSMEs in the Philippines, SM Prime partners with the DTI to empower MSMEs with retail space in 83 of its malls nationwide, training and mentorship.

A brighter future is in store for micro, small and medium enterprises (MSMEs). On July 1 at the SM Prime Headquarters, SM Prime Holdings (SM Prime) and the Department of Trade and Industry (DTI) signed a Memorandum of Agreement (MOA) to enter into a collaboration that will empower MSMEs in the Philippines.

Together, SM Prime and DTI will aid MSMEs in retail to attain prime mall space in 83 of its SM Malls nationwide. The partnership provides MSMEs with discounted booth rentals as well as training programs for entrepreneurs. These training programs will focus on topics such as product development, marketing, and financial management. In addition, mentorship with experienced business leaders will also be made available for the entrepreneurs behind these MSMEs.

The collaboration is a continuation of both SM Prime’s and the DTI’s commitment to developing MSMEs. SM Prime has been supporting MSMEs in the Philippines through its “SM for MSMEs” program. Meanwhile, the joint venture aligns with the DTI’s “One Town, One Product (OTOP)” program.

Steven Tan, President of SM Supermalls was at the signing of the MOA to represent SM Prime together with Royston Cabunag, SM Supermalls’ Assistant Vice President for Operations. Representing the DTI were Secretary Alfredo Pascual, DTI Undersecretary for MSME Development Group Cristina Roque,and DTI-Bureau of Market Development, Promotions, and OTOP Philippines Director Marievic Bonoan.

MSMEs in the Philippines

MSMEs have long been the backbone of the Philippine economy. According to data from the Philippine Statistics Authority (PSA) in its 2019 List of Establishments, there were 1,000,506 business enterprises operating in the country. Of these one million establishments, 99.5% of them were MSMEs.

Breaking down this list of MSMEs in the Philippines further, almost half of them, or 49.48% as of 2022, are in wholesale and retail trade. This was followed by enterprises in accommodation and food service (14.31%) and manufacturing (12.08%).

As the economy emerged from the COVID-19 pandemic, many of these MSMEs experienced difficulties in doing business. These included disruption of supply chains, shortages in raw material supply, and problems in distribution and logistics. This was reported in a study by the United Nations Industrial Development Organization (UNIDO), “Assessment of the Socio-economic Effects of COVID-19 and Containment Measures on Philippine Enterprises.”

SM for MSMEs

SM Prime Holdings places MSMEs in the Philippines at the heart of its business. According to Steven Tan, President of SM Supermalls, “MSMEs are our local partners in generating value across all the communities we operate in. With 99.59% of the local economy composed of MSMEs, the persistence and vibrancy of local trade as well as the generation of jobs on the micro, small, and medium scale hinges on their success.”

67% of SM tenants are MSMEs. To support these businesses, SM Prime launched its “SM for MSMEs” program which aims to help these businesses in overcoming three challenges: access to customers, the high cost of operational requirements such as rent, and competition with established brands. Through the program, SM aims to be the incubator of the country’s next big brands.

SM for MSMEs offers scalable packages to businesses in the communities around SM malls. The program currently has 633 purveyors nationwide, providing an affordable and strategic platform for entrepreneurs to sell their products and reach the right market.

One Town One Product

MSMEs in the Philippines are also a focus for the government. On August 25, 2023, President Ferdinand R. Marcos signed Republic Act No. 11960, which institutionalized the OTOP Philippines Program. The law aims to aid MSMEs in the post-pandemic era.

In a statement, House Speaker Ferdinand Martin Romualdez said that RA 11960 and the OTOP Philippines Program is the “true embodiment of the ‘Filipino first policy’ that the country needs to help micro, small and medium enterprises (MSMEs) recover from COVID-19 pandemic.”