PCCI to SMEs: export to ASEAN markets via subcontracting

By Rachel O. Acosta

PCCI Information Officer

Alfredo M. Yao, newly elected president of the Philippine Chamber of Commerce and Industry (PCCI), is encouraging more small and medium entrepreneurs to increase their revenues and profitability by indirectly exporting to other ASEAN countries as suppliers or subcontractors of large Philippine enterprises.

In a talk with some participants on the sidelines of a forum on ASEAN Comprehensive Investments Agreement (ACIA), PCCI president Yao said that entrepreneurs may make up for their small size, lack of financing and lack of export marketing skills by collaborating with large exporters.

By subcontracting, Yao said, the SMEs serve the needs of consumers in a huge, overseas market instead of compete in a small domestic market.

Those small entrepreneurs aspiring to benefit from a share of the ASEAN markets can contact the regional or provincial chambers of the PCCI, and avail themselves of the matching services for SMEs and exporters and investment promotion training. PCCI also offers technical assistance such as in the writing of business plans to gain access to financing.

The forum on the ASEAN Comprehensive Investment Agreement was organized by the PCCI in partnership with the Board of Investments, Department of Trade and Industry and the ASEAN Business Advisory Council.

The PCCI president who heads one of the country's largest beverage companies, said that PCCI advocates subcontracting because SMEs would get their products early to ASEAN markets, turn over their inventories faster to cash, avoid high borrowing and logistics costs, overcome delays and paperwork, improve productivity, and allow them to hire more workers.

As examples, he cited the growth of suppliers of raw materials and services for exporters such as Jollibee Corporation, Splash Marketing, Belo Medical, EQ Diapers, Robina Corporation and Yazaki Torres.

Though subcontracting arrangements in the Philippines is common in the automotive and electronic components industries, supply deals have also been flowering for years.