Sector: Private Sector Development
Region: South East Asia and Pacific
Funded by:
Canadian International Development Agency (CIDA)
Total Value: Approximately C$10 million
Partners and Counterparts:
In Philippines: Department of Trade and Industry (DTI) and National Economic Development Authority (NEDA)
To work with Business Support Organizations (BSOs) and Investment Promotion Centres (IPCs) to support small and medium enterprise (SME) development and create meaningful jobs for both men and women. These jobs contribute to the reduction of poverty in the Philippines through equitable and sustainable development.
Prior to 1986, the Government of the Republic of the Philippines had industrial priorities that favoured the development of large-scale, often highly protected enterprises. Mircoenterprises were part of the informal sector but were restricted entry into many subsectors, leaving the Philippines with a disproportionately small number of successful SMEs.
During the Asian financial crisis, the importance of SMEs was highlighted. Unemployment increased and wage levels dipped for over 90% of the population, with unskilled workers and those in the informal sectors among the most affected. Economic recovery efforts have since focused on job creation, with SMEs in labour-intensive sectors having the potential to pay a very significant role. This encouraged the growth of SMEs in the Philippines.
However, there were still constraints to SME development. These included lack of sustainable support networks and a dearth of industry associations (known as Business Support Organizations or BSOs); and limited access to skills upgrading, technology, relevant information and financing.
Two previous CIDA projects had been developed to address these concerns. The Enterprises Support Project (ESP) supported the development of sustainable networks of services for SMEs. The Private Enterprise Accelerated Resources Linkages (PEARL) worked to foster an environment conducive to the development of dynamic Philippines SMEs and to promote the development of linkages between Philippine and Canadian SMEs. When both projects ended, PEARL2 was introduced to build on their foundations.
PEARL2’s approach reflects the successful elements and experiences gained from the ESP and PEARL projects, and involves:
The project has four components:
Sectoral Enhancement: This involves support through training, market and export enhancement, policy studies and advocacy to labour-intensive sectors including furniture, food processing, wearables, natural and organic projects and gifts and housewares.
Partnerships Development Facility: This is a cost-sharing mechanism to encourage the development and implementation of initiatives proposed by the Business Support Organizations.
Capacity Development for Investment Promotion: This component focuses on strengthening the capability of the Board of Investment and the Investment Promotion Agencies to work with sectors with the potential to multiply employment and investment opportunities for the country (in particular, through enhanced information technology).
Dissemination and Sustainability: This works at ensuring that project results are institutionalized and sustained beyond the life of the project.
Note: Originally planned to operate for only five years (2002–2007), the project received a one-year, one-million-dollar extension.
Joan Donaldson
joand@agriteam.ca
