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SMEs in the Philippine Manufacturing Industry and Globalization: Meeting the Development Challenges

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  • Aldaba, Rafaelita M.

Abstract

In recognition of their substantial contribution to the economy both in terms of number of enterprises and workers, the Philippine government has put in place a number of policies and programs designed specifically to boost SME productivity and competitiveness in the country. However, the performance of SMEs in the last decade has not been vigorous enough to boost the Philippine manufacturing industry. As such, the deepening of high technology industries in terms of the creation of backward linkages has remained weak. While the country’s exports of high technology products have grown rapidly, the value added of these exports is very low due to the limited links of large domestic and foreign companies to the domestic economy. Rapid changes in the international trade and the growing complexity of global production system, pose a significant challenge to Filipino SMEs. This paper reviews existing government SME policies as well as recent developments in the manufacturing sector, within the context of the emerging global production network. The paper draws on the findings of a survey interview of SMEs in the automotive, electronics, and garments sectors. The paper highlights the importance of creating a separate government office that would coordinate SME policies and programs to support the integration of SMEs in the global production chain.

Suggested Citation

  • Aldaba, Rafaelita M., 2008. "SMEs in the Philippine Manufacturing Industry and Globalization: Meeting the Development Challenges," Discussion Papers DP 2008-15, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2008-15
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    File URL: https://serp-p.pids.gov.ph/serp-p/download.php?d=4354&s=3
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    References listed on IDEAS

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    1. Rafaelita M. Aldaba, 2007. "Assessing the Competitiveness of the Philippine Auto Parts Industry," Microeconomics Working Papers 22163, East Asian Bureau of Economic Research.
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    Cited by:

    1. Medalla, Erlinda M. & Mantaring, Melalyn C., 2017. "Mainstreaming SMEs: Promoting Inclusive Growth in APEC," Discussion Papers DP 2017-49, Philippine Institute for Development Studies.
    2. Aldaba, Rafaelita M., 2008. "Globalization and the Need for Strategic Government-Industry Cooperation in the Philippine Automotive Industry," Discussion Papers DP 2008-21, Philippine Institute for Development Studies.
    3. del Prado, Fatima & Macasaquit, Mari-Len R. & Cabalfin, Michael R. & Mantaring, Melalyn C., 2010. "Development of Regional Production and Logistic Networks in East Asia: the Case of the Philippines," Discussion Papers DP 2010-17, Philippine Institute for Development Studies.
    4. Lazaro, Dorothea C. & Wignaraja, Ganeshan & De Guzman, Genevieve, 2011. "Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines," Philippine Journal of Development PJD 2009 Vol. XXXVI No. 2, Philippine Institute for Development Studies.
    5. Castillo-Sam, Eva Marie & Tormis, Jeaneth & Murcia, John Vianne, 2016. "A Model of Business Innovation in the Context of Micro, Small and Medium Enterprises in Davao Del Sur," MPRA Paper 72644, University Library of Munich, Germany, revised Jun 2016.
    6. Leonardo Lanzona, 2015. "Mainstreaming SMEs through Social Enterprises," Working Papers id:7061, eSocialSciences.
    7. Ahmed, Vaqar & Wahab, Mohammad Abdul & Mahmood, Hamid, 2011. "Effectiveness of HRD for developing SMEs in South Asia," MPRA Paper 30780, University Library of Munich, Germany.

    More about this item

    Keywords

    globalization; small and medium enterprises (SMEs);

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy

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