was successfully added to your cart.


Challenges microenterprises face in the Philippines

The Philippine Statistics Authority reported that 21.6% or approximately 21.9 million Filipinos were poor in 2015. Farmers, fishermen, children, self-employed and unpaid family workers, and women, belonging to poor families, had higher poverty incidence than the general population.[1]

If perception survey is to be used, more Filipinos consider themselves poor. The Social Weather stations reported that 50% of Filipinos consider themselves as poor in the fourth quarter of 2019[2].

Generally, women do not control family properties and decision-making rights on the use of income, further limiting opportunities to break the poverty cycle.[3] Although the Philippines ranks high in gender and development, Filipino women still experience high inequality in the labor force participation rate and moderate inequality in the wage gap.[4]

The Department of Trade and Industry defines microenterprises as businesses engaged in industry, agribusiness or services with less than PhP3 million in assets (exclusive of the cost of land) and employs less than 10 individuals. In 2012, it estimates that there 90% of registered businesses in the Philippines are microenterprises.[5]

Microenterprises can take various legal forms. These could be sole proprietorships, partnerships, cooperatives or corporations.[6]

In 2004, the government reported the following challenges microenterprises face[7]:

  • Lack of Managerial skills of entrepreneurs and inadequate technical skills of workers
  • Limited access to technology and lack of funds for research and development
  • Low productivity and low product quality
  • Limited access to financing
  • Limited access to information
  • Overall business climate that is hampered by the high cost of labor, raw materials, inadequate services and infrastructure

In 2010, the Trade Union of the Philippines also identified the following challenges facing microenterprises in addition to the ones mentioned[8]:

  • Inadequate supply of skilled workers
  • Lack of public programs needed to boost productivity in coordination with the academe and private sector
  • Limited capacity for e-commerce
  • Lack of technological advancement
  • Weak link to medium and large enterprises

Aside from these systemic challenges, there are external vulnerabilities that microenterprises face such as the negative effects of climate change, natural hazards and the increasing frequency of disasters.

Government and environmental compliance among microenterprises is practically nil since they are more concerned of surviving business challenges they face.

World Bank’s 2019 Ease of Doing Business Report ranked the Philippines 124th out of 190 countries.[9]




[2] https://www.sws.org.ph/swsmain/artcldisppage/?artcsyscode=ART-20190111212452

[3] https://pcw.gov.ph/focus-areas/womens-economic-empowerment


[5] https://www.senate.gov.ph/publications/AG%202012-03%20-%20MSME.pdf

[6] https://www.senate.gov.ph/publications/AG%202012-03%20-%20MSME.pdf

[7] Gov.ph, Presidential Management Staff and Office of the President, July 2004; [1] House of Representative Special Committee on the Generation of a Million Small Enterprises

[8] http://tucp.org.ph/2010/03/20-challenges-facing-philippine-smes-in-2010/

[9] 2019 Doing Business Report. World Bank Publications. Washington. http://www.worldbank.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2019-report_web-version.pdf


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: