MAP InsightsColumn in THE BUSINESSWORLD
The P95 Billion Budgetwritten by Ms. Chit U. Juan - August 23, 2022
Did you know there is a Magna Carta for MSMEs that provides for 10% of government spend to be supplied by this sector? That is a whopping PHP95 Billion that could be availed of by women micro entrepreneurs as they comprise more than 60% of the MSME population.
The computed government spend is P959 billion and it is easy to say that if all local government units (LGUs) followed the Magna Carta, their local suppliers and producers can easily be benefited by this prescribed budget. It is a goal to have everyone tow the line like what Quirino Province did. They used up the 10% for MSME suppliers. Thanks to Department of Trade and Industry’s (DTI) proactive Regional Director Leah P. Ocampo, they are able to mobilize all LGUs in her region to be conscious of this budget allocation.
At a recent round table sponsored by UN Women, we discussed Gender-Responsive Procurement (GRP) as it has been proven to benefit mostly women who after all put back 90% of what they earn to the family table, and each woman entrepreneur hiring 6 other women to help her in the business. These micro businesses are usually on food production, textile and value-addition for agricultural products.
If the mentioned region can do it with P300 Million, imagine if everyone did this. You may not have to resort to regular ayuda if every woman engaged in a micro business of sorts. Or worked for a micro entrepreneur supplying government.
At the same round table, we learned that the Government Procurement Policy Board (GPPB) already has included farmers in the supply chain even if they do not yet belong to a cooperative or are not registered as a small business with the DTI. The government unit issues a Purchase Order which the farmer signs and accepts, and he or she is good to go! This is what is now called Community Participation, a feature of the Bayanihan Act issued during the height of the COVID-19 pandemic.
It is not so easy, however, for private businesses due to the provision that agricultural products do not carry a VAT input, and thus poses an added 12% for the buyer. Not a great incentive to buy from farmers if you are private. But for government, it is a welcome opportunity for farmers to directly supply their LGUs.
In the example presented by Region II, 2,498 micro entrepreneurs were included in the supply chain and 66% were women. This region is a microcosm of the typical gender split across the country when it comes to reading gender-disaggregated data. Again, why is it important to have this data? Because what does not get counted, does not get measured. And what does not get measured does not get the benefits.
Another campaign by the DTI Regional Operations Group is the Buy Local movement. It is an answer also for logistical challenges encountered by producers. If one LGU were to buy from its local producers, the cost is contained locally and thus follows the concept of “from the right pocket to the left” or containing the funds to benefit the producers’ region or local area. In this manner, the local producers are immediately given the advantage of doing business with government. I heard from Undersecretary Bles Lantayona that Region II’s example is now being rolled out nationwide. So, local producers, get ready to have your LGU as your regular client.
This is part of a global trend of deglobalization. As the pandemic challenged supply chains, producers are better off selling the finished product locally than for it to be exported. It also makes use of local labor and keeps the resources intact within the locality.
The Procurement Law or R.A. 9184 really needs some amendments.
- One is to identify suppliers or would-be suppliers by gender.
- Next is for Philgeps , the government’s electronic procurement system, to identify if the business is women-owned (now loosely defined as 51% women-owned). The GPPB or DTI’s MSMED Council will have to define what “women-owned” is.
- Philgeps will also need more awareness building among MSMEs so this sector can participate in “small spend” or “small items” that any LGU needs like food suppliers, etc.
- The Bids and Awards Committee (BAC) members should not have to be penalized with such a big criminal punishment for a minor mistake. This must be reviewed so we can have more civil servants serving in BACs. As it is, they say BAC officers are very few because it is onerous to sit as a member due to a general penal provision no matter if the budget you approve is big or small.
But even with these challenges, we salute those who spearhead innovations, adopt inclusive measures and are gender-responsive and not gender-blind. Although the Philippine Competition Commission (PCC) admits they, among all other agencies, have to be gender-blind to make it an equal opportunity for all. The others, save PCC, have Gender And Development (GAD) budgets as provided by the Magna Carta for Women, another law needing implementation. The Magna Carta provides that 5% of NGA or LGU budget must be spent on gender-related activities, but that is yet another topic for another column. It is also underused and most agencies are actually cited by COA for underusing or not using the GAD in their Budget Utilization Reports (BUR).
In the meantime, the news about P95 Billion is something we must think about. This is a lot of money that can benefit our over 900,000 MSMEs. And they do not even have to go out of their localities to do business.
Do business with government. It can happen and it is already being done in many places. Take your slice of the pie. There is a lot more, even beyond P95 billion.
(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is member of the MAP Diversity & Inclusion Committee, and the MAP Agribusiness Committee. She is Chair of the Philippine Coffee Board, Councilor of Slow Food for Southeast Asia and is an advocate for organic agriculture. Feedback at <email@example.com> and <firstname.lastname@example.org>.