The Philippine Online Chronicles

Entrepreneurial revolution and a competitive environment will be the centerpiece of Manny Villar’s program if he is elected to the presidency. “Competitive environment and entrepreneurial revolution are the two necessary ingredients to push our country forward.” Livelihood development has been Manny Villar’s personal advocacy for a long time now. Having worked with the UP-Institute for Small Scale Industries (UP ISSI) in the 1980’s, I asked for his livelihood development plans when I first talked to him last July 2009. He reiterated his entrepreneurship advocacy during our round table discussion five months later without even asking him this time.   He has been consistent with his plans so far.

How does he plan to achieve it?

1. Changing the banking system to ensure the flow of credit to the small and medium enterprises (SMEs) .

Right now, Villar says that there is barely any flow of credit or government program to support financing of small and medium enterprises.

2. Strike at the root, create jobs.

He adds “You put the country at the growth path at 7% per anum for the next 6 years to create excitement.  The next president should manage at day one.“

Reality is laws and programs were already in place for many years even during my research days at the UP-ISSI in the early eighties.  Manny Villar says that there are no government programs for SMEs that provide massive support.

Let’s see.

1.  Republic Act No. 9178, otherwise known as the  Barangay Micro Business  
Enterprise (BMBE) Act of 2002  defines the SMEs as follows:

Micro - up to 3,000,000 
Small - P3,000,001 - 15,000,000 
Medium  - P15,000,001 - 100,000,000  
Large - above P100,000,000

The incentives for the mico business enterprise  are attractive with exemption from income tax for income arising from the operations of the enterprise and coverage of the Minimum Wage Law

2.  All lending institutions are required to lend and set aside at least 6% of their total loan portfolio to small enterprises and at least 2% to medium-sized enterprises.

The Republic Act 6977 enacted in 1991 (the Magna Carta for Small Enterprises) required 10% more to be diverted to SME’s. Then, it was amended in 1997 under the Republic Act 8289 to extend the applicable period to 2007 and lower the minimum level to 6% and 2%.  The Bangko Sentral ng Pilipinas is mandated by law to monitor this initiative.

3.  The National SME Agenda was integrated into a Medium Enterprise Development Plan for 2006-2010  under President Gloria Macapagal Arroyo (GMA) and  one of  the 10-point agenda was  the creation of six million jobs in six years through more opportunities given to entrepreneurs. GMA created the Office of the Presidential Consultant for entrepreneurship in March 2005 whose mandate is the creation of 3.0 million entrepreneurs by the end of President Arroyo’s term in 2010

All of these programs to spur entrepreneurship development are in place but it failed to deliver.

Although the government created 3.5 million jobs from 2004 to 2008, these jobs “represent a backlog of the 3.5 million jobs, given a target of at least 1.4 million employment created per year. Unemployment “remains high and meeting job creation targets continue to be a challenge," the National Economic and Development Authority (NEDA) said in its updated Medium Term Philippine Development Plan (MTPDP) for 2010. In 2009, the economy slowed down and, as a result, was only able to create 530,000 jobs. The unemployment rate was at 7.4 percent. The government’s failure to create the millions of job it promised led to increased poverty during the years 2004 to 2006.

Will Manny Villar core program work where the GMA administration failed to accomplish?

MANNY VILLAR 7

BLOG WATCH's Podcast

Manny Villar talks of entrepreneurial revolution at 3:26

Villar believes  the entrepreneurial revolution and a competitive environment will address the poverty and number of Filipinos leaving the country .  He says  that leadership, managerial ability, experience is important.   Villar claims that a president of the country should have all three characteristics to  manage the economy well enough to create more jobs and address this issue of poverty.  Once poverty is addressed, it will decrease people leaving the country.  Looking at  his qualifications, Villar appears to have  the leadership and managerial capabilities and is quite aware of the needs of business community.  He knows that work starts in day one even as employment in the Philippines will continue to drop despite early signs of economic recovery.

Having the leadership, managerial ability and experience helps but there are serious problems to contend with. The successful implementation of  an entrepreneurial revolution and competitive environment is only possible if the future president address the wasteful spending, reduce corruption and the political and economic uncertainty

Photo of Manny Villar from Jane Uymatiao. Some Rights Reserved.

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