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PN 2018-13: Duration of Export Relationships of Philippine MSMEs

The Philippines has been recognized as a champion of micro, small, and medium enterprises (MSMEs) within the Association of Southeast Asian Nations (ASEAN) region. Sadly, even its own enterprises do not seem to survive once they enter international trade. For instance, this Policy Note finds that only 6 in every 10 Philippine MSMEs engaged in export trade manage to survive after their first year of operation outside the Philippines. This figure further dwindles to less than 4 in every 10 by the end of their fourth year. This study likewise finds that, on the average, the fourth year is critical in the trade duration, where the average decrease in survival rate is lowest. Given the findings, it urges the government to extend support to Philippine MSMEs that export products to ASEAN countries and other trade partners, strategically during the identified critical years of export survivability. Focus should be directed toward assistance in increasing the capability of the firms, targeted appropriately, to reach larger orders, either through financing or through consolidation with other similar firms that have successfully complied with the product standards required by foreign buyers.

Philippine Institute for Development Studies
Authors Keywords
Bautista, Mark Edison Q.; Manzano, George N.; Philippines; micro, small, and medium enterprises; international trade; MSMEs; MSME development; export trade; trade relationships; trade duration; survival rate;
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Published in 2018 and available in the PIDS Library or can be downloaded as full text Downloaded 189 times since October 23, 2018