INTRODUCTION
As far as I can remember, this is the first time that a bill-signing ceremony was held here at the Ninoy Aquino International Airport (NAIA). The choice of this venue is not by fortuitous circumstance, but by intentional design because of both the international and domestic ramifications of Republic Act (RA) No. 8289. This new law which aims to strengthen the promotion, development and assistance to small and medium scale enterprises (SMEs), acknowledges worldwide recognition of the fact that SMEs serve as the backbone of any country’s economy.

This is particularly true in the Philippines. Small businesses make up the bulk of clients of rural, commercial, development and government banks today. During the period from 1992 to 1996 some p106 billion worth of loans were accessed to SMEs by lending institutions (with a repayment rate of more than 95%) which is 6.5 times more than the total credit extended to small businesses during the entire 45-year period from 1946 to 1991.

The Asia-Pacific Economic Cooperation (APEC) Summit of 1996, which the Philippines hosted, also focused on SMEs as a strategy by which our eighteen economies can fast-track their development. For this purpose, the Philippines offered to provide the venue and the overall stewardship of the APEC Center for Technological exchange and training for SMEs (ACTETSME) — which was established in Los Baños and is now an on-going concern serving the entire Asia-Pacific.
MORE FUNDS TO SPUR GROWTH
This law which amends republic act no. 6977, otherwise known as the Magna Carta for Small Enterprises, further signals to the world the accelerated development of our SMEs and creates expanded job and livelihood opportunities to our people.

RA 8289 requires all private and government banks, as well as other lending institutions, to set aside during the next ten years eight percent of their loanable funds for small and medium industries.

This means that at least p64 billion of the estimated p790 billion available for lending every year in the financial market will be available to small and medium enterprises until the year 2007.

This will definitely enable the hundreds of thousands of small and medium Filipino entrepreneurs and their families to grow and prosper on the basis of their self-reliance and resourcefulness.

Furthermore, since many of these small and medium enterprises are export-oriented, their increased productivity would also mean additional foreign exchange earnings.
MORE BENEFITS FOR SMEs
One of the major problems of small and medium scale businessmen in our country is inadequate access to credit facilities and lending windows. The present process also results in reams of paperwork, red-tape, and unwarranted delays.

This new law reduces this problem by simplifying present requirements, thus enabling more enterprises to start and expand business. It also increases the membership of the Small and Medium Scale Enterprises Development (SMED) Council, which shall now include the Secretary of the Department of Tourism (DOT), the Chairman of the Monetary Board, and a representative from the banking sector.

The active participation of the DOT in the council is necessary, particularly in attracting foreign investments to our SMEs in the booming tourist and travel/trade.

On the other hand, the deeper role of the banking sector and the monetary board provides the necessary push for the banking sector’s compliance and efficient monitoring on the law’s mandatory allocation provisions.

RA 8289 also provides for the entitlement of registered SMEs to a share of at least ten percent of the total procurement value of goods and services supplied to the government, thus assuring a larger share for them in the domestic market.

SMEs must be shepherded and promoted in the open and free trade environment brought about by various regional agreements, such as the World Trade Organization-General Agreement on Tariffs and Trade (WTO-GATT), the Asia-Pacific Economic Cooperation (APEC), and the ASEAN Free Trade Area (AFTA). Through this new law, our SMEs can now become more internationally competitive and can look forward to increased demands for their goods because of a more sympathetic and secure financial environment.
CLOSING
We now know that the real opportunities for the future of a developing economy like ours lie in the collective contribution of small businesses which must operate efficiently.

New “small firm” formation and growth has been a major mechanism for the creation and equitable distribution of wealth since it affords the poor to achieve upward social and economic mobility.

To sum up, the development of our small and medium enterprises is a powerful weapon in our fight against poverty.

Properly assisted and financed SMEs provide a big push towards our quest for a life of dignity and opportunity for all — a life free from want and fear, where each Filipino — especially the common tao — is able to exercise his or her rights, use his or her intelligence and skills to achieve life’s full potential.

In this year of the reawakening of the Filipino spirit, I challenge our small and medium enterprises to become more competitive and more visible in the global arena showing to the world what the Filipino does, can do and has done!

In behalf of the Filipino entrepreneurs, I thank and commend the members of the senate, led by Senate President Ernesto Maceda, and of the house of representatives, led by Speaker Jose de Venecia, for the passage of this all-important measure. Let us enact more such laws like this that will empower the Filipino. Kaya ito ng Pinoy!!

Thank you and mabuhay tayong lahat!