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Sme In Philippines

I. INTRODUCTION AND OVERVIEW

Small and Medium-scale Enterprises plays an important role in economic development worldwide. Many developing countries in fact have placed Small and medium enterprise development and promotion on top of their economic agenda. With the failure of past industrialization policies favoring large enterprises to stimulate wide-ranging development, SMEs are being given renewed emphasis as engines of economic growth, employment potential and poverty alleviation. SMEs play an important role particularly in industrial production and economic growth in less developed, developing and transitional economies worldwide.

II. DEFINITION OF SMALL AND MEDIUM ENTERPRISE
There is no regional, or global concensus on the definition of an SMEs. Different countries adopt different criteria such as number of employees, invested capital, shareholders funds, sale volume and production capability for defining SMEs. The most commonly used index is the number of employees. A summary of the definition of SME can be seen at the table below:




Recently, Republic Act No. 9178, otherwise known as the Barangay Micro Business Enterprise (BMBE) Act of 2002 has redefined the categories. Hence, the present structure, by law, is 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
III. Current developments of the SME Sector
SMEs account for 99.7% of registered business enterprises, contribute about 32% of the country’s GDP by providing employment and income and by generating exports. Below is chart of the Philippine’s industry structure and statistics as summarized and identified by industry classification:


As seen in the chart, only 2,958 firms or 0.3% of the total number of registered business in the country are large scale enterprise, 91.7% micro enterprise and the remaining 8% belongs to the Small and medium scale...