Abaca field in Iligan one of the identified (projects of MASICAP II

Mindanao is always known for its abundant natural resources and agricultural production but saddled with insurgencies and armed conflicts between left-leaning / separatist Muslim groups and Government troops.  These stem from general discontent of the central government’s long neglect to attend to the area’s development needs, exacerbated over time by ideological, cultural and religious differences amongst its people.  While there is no quick and single solution, it is apparent that one way to address the problems is to hasten economic development in a manner by which economic benefits could redound to the majority of the populace.   Industrial development, particularly micro, small and medium enterprises (MSMEs), is recognized to be an effective means of providing employment opportunities and off farm income generating activities in the localities due to the sector’s inherent characteristics and advantages.  The sector requires relatively low capital, skills and technology that are available and can be mobilized in the localities.

Its development shall further process agricultural produce and utilize abundant raw material resources for local consumption and markets elsewhere.  This not only increases the value added retained in the communities but improves efficiency through reduced transport costs and spoilage.  MSMEs can also make use of indigenous materials and skills to produce marketable products.  Most important, the sector can propel local economic development by providing entrepreneurial opportunities, and means for local communities to accumulate capital and experience for economic growth and expansion.

MSMEs are however faced with several constraints that have to be addressed in order to exploit their potential contribution to countryside economic development.  One of the common problems is the timely access to capital funds, be it for working capital or for machinery and equipment.  Often, entrepreneurs have limited knowledge on formal financing schemes available and if they to, they are unable to prepare business plans required to obtain loans.

They usually have unbalanced management skills to solve problems and effectively manage all the functional areas of the enterprise as well as exploit market opportunities, anticipate market changes and plan ahead.  They also have limited access to information about markets, sources of raw materials and technology.  These are some of the problems that can be addressed by industrial / business extension services. While MSMEs are viewed to play important role in countryside economic development, there are virtually no business development support services available in the localities.  The Department of Trade and Industry has long moved out from firm level assistance in the assumption that non-government organizations and private sector groups will provide such services.  However, the vacuum has not been filed.

Fish Cage in Sapu Padidu, Sarangani Province  one of the identified projects of MASICAP

MSMEs are left on their own to seek ways to survive and grow except for occasional and intermittent training, trade fairs and other assistance services sponsored by government agencies, donor funded projects and private business organizations, notably chambers of commerce.  However, the latter are faced with lack of finances to carry out this mission, and a chicken-and-egg situation – unless they provide services, they find difficulty in raising the fees and other funds to carry them out.  While multilateral and foreign-assisted projects like UNIDO’s can help, it will take time for the chambers to provide all the assistance needed to support MSME development in their areas of coverage.

The MASICAP experience had shown that students and young professionals could become effective catalysts in providing business services for as long they are given the proper training, appropriate organizational framework and support.  A pilot project similar to MASICAP is thus proposed to be initiated in areas covered by the UNIDO project.  The concept of recruiting Business Administration and Economics students to volunteer for the program in lieu of their last year in college can be arranged with the Commission on Higher Education (CHED) and local colleges / universities.  These arrangements can easily be supported with the track record of the 1970’s MASICAP and the career success of its graduates whose training and work experience with the Program had more than compensated for the academic classes they missed in school.

The proposed MASICAP pilot project can be initiated by a dedicated private sector foundation.  Mr. Paterno has committed to raise enough funds for the foundation and draw private sector financial support for the pilot project.  This will enable the project to operate apolitically while working closely with local governments, chambers of commerce and other institutions and sustain operations despite leadership changes and policy reversal thrusts that often destroy program continuity in government agencies.

It is hoped that the Local Government Units (LGUs) in the areas covered by the UNIDO project will also allocate resources to support the pilot project, since this will stimulate economic activities in their localities through business creation and expansion.  Both private sector, through the foundation, and LGU’s could be enticed to allocate resources for a workable undertaking that will assist in propelling local economic development.  Eventually, additional assistance can be sought from donor funded projects being implemented in the area, such as the UNIDO Industrial Development Program for Income and Employment Generation in Mindanao.

MASICAP MSME Development Foundation Incorporated

Medium and Small scale Industries Coordinated Action Program II (MASICAP II)

Designed by : ED Altares  / edaltares@yahoo.com / +63 919 672 6868