SMEs in the Philippine manufacturing industry and globalization: meeting the development challenges

Abstract

In view of rapid changes in the international trade and the growing complexity of the global production system, this paper reviews the government’s small and medium enterprises (SME) policies in the manufacturing sector. It shows that despite the number of policies and programs to improve firm competitiveness, the performance of SMEs has not been vigorous enough to boost the manufacturing industry. The deepening of high-technology industries has remained weak due to limited backward linkages and low value added of high-technology export products. The paper also draws on the findings of a survey of SMEs in the automotive, electronics, and garments sectors. It 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.

JEL classification: L60, L53