1. Promotion of Principled , Inclusive and Business Sustainable CSR in the Philippines CSR for SMALL and Medium Enterprises What is the Score ? 01 December 2015
UPIEAA Professor Nestor O. Raneses
Director Institute for Small Scale Industries
Affiliate Faculty on Total Quality Management
Technology Management Center
University of the Philippines Diliman
Assistant Vice President for Administration
University of the Philippines
Former Senior Director Quality Asia, AMIS Semiconductor &
Global Manufacturing Quality Manager , ON Semiconductor

2. GREETINGS & FELICITATIONS
Creating and Empowering Filipino Entrepreneurs Today & Tomorrow
National Institute
for
Innovation and Entrepreneurship

3. GREETINGS
ASEAN CENTER OF EXCELLENCE for SME DEVELOPMENT – PHL
Usaping Pangnegosyo, Ilaw, Salamin at Sandata ng Industryang Pilipino
UP ISSI P

4. INNOVATION & ENTREPRENEURSHIP SOCIAL ENTREPRENEURSHIP INCLUSIVE GROWTH SUSTAINABLE PROSPERITY

5. DEFINING CSR

7. CSR IMPACTS ON SMES

8. Levels of Corporate Engagement in Social and Environmental Issues

9. CSR ISSUES AND STAKEHOLDERS

10. AGENDA QUICK SNAPSHOT OF SMEs PHILIPPINE SME OVERVIEW SME ROLES
APEC
ASEAN
PHILIPPINE SME OVERVIEW
SME ROLES
SME CSR CHALLENGES
WAY FORWARD

16. SME Definition Criteria
The definitions used for an SME in APEC vary widely. In very general terms, a common feature is that an SME in APEC employs less than 100 people, but there are a lot of exceptions.
Source: APEC Policy Support Unit. (2010). SME Market Access and Internationalization: Medium-term KPIs for the SMEWG Strategic Plan.

19. SME SIGNIFICANCE IN ASEAN
96% of ASEAN enterprises
50-95% of domestic employment
30-53% of GDP
19-31% of exports

21. SME SIGNIFICANCE IN ASEAN
ASEAN Country
SHARE : TOTAL ESTABLISHMENT
SHARE : TOTAL EMPLOYMENT
GDP SHARE: GDP
SHARE : TOTAL EXPORTS
Share
Year
BRUNEI DARUSSALAM
98.4%
2008
58.0%
23.0% -
CAMBODIA
99.8%
2011
72.9%
INDONESIA
99.9%
97.2%
16.4%
LAO PDR
99.0%*
MALAYSIA
97.3%
57.4%
2012
32.7%
19.0%
2010
MYANMAR
88.8%**
PHILIPPINES
99.6%
61.0%
36.0%
2006
10.0%
SINGAPORE
95.9%
43.6%
THAILAND
76.7%
37.0%
29.9%
VIETNAM
97.5%
51.7%
40.0%
20.0%
Source: Country’s Reports
Note: * ADB (2013), ** Registered numbers

22. MSME DEFINITION IN THE PHILIPPINES
ASSET VALUE EMPLOYMENT
MICRO <P3M 1 to 9
SMALL P3M - P15M to 99
MEDIUM P15 - P100M to 199
LARGE > P100M > 200
Source : RA 9501, Magna Carta for Micro, Small and Medium Industries

23. PHILIPPINE SMEs MSME 99.6% LARGE 0.4%
99.6% : TOTAL FIRMS
62% : EMPLOYMENT
35.7% :VALUE-ADDED
MICRO %
MSME 99.6%
Ph ENTERPRISES
(820,255)
SMALL 8.6%
I will revisit very briefly with you a profile of Philippine MSMEs.
In our country, MSMEs dominate the business sector in terms of
number of establishments. MSMEs comprise around 99.6% of total firms in the Philippines; 62% of employment and 35.7% of value added.
As you can see in this slide, the bulk of enterprises in the Philippines is under the micro level.
Often dubbed as the backbone of the economy or the linchpin of economic development, the MSME sector is critical for investment and economic growth, job creation, local taxation, productivity enhancement, and technological innovation. SMEs are also a growing source of export revenues in the Philippines. The sector serves as supplier and subcontractor to large enterprises and forms a strategic component of the export value chain. MSMEs provide a support system not only for parts but also for logistics services. This can improve and strengthen domestic linkages and enhance the efficiency and competitiveness of large enterprises. The MSME sector also plays a vital role in the economy being the entry point for entrepreneurs to build new businesses some of which will grow into large businesses that will create wealth and employment.
LARGE 0.4%
MEDIUM 0.4%
Source: 2011 List of Establishments, NSO

24. PHILIPPINE SME GEOGRAPHICAL DISTRIBUTION ( NSO, 2009 )

25. PHILIPPINE SME DISTRIBUTION BY INDUSTRY SECTOR ( NSO, 2009)

27. UNIDO 3C STRATEGIC APPROACH FOR SME DEVELOPMENT

28. MSME DEVELOPMENT PLAN 2011-2016 RESULTS FRAMEWORK
40% VALUE ADD CONTRIBUTION
ADDITIONAL 2 MILLION EMPLOYMENT
Business Environment
(BE)
Access to Finance
(A2F)
Access to Market
(A2M)
Productivity & Efficiency
(P&E) 28

30. Philippine MSME Development Plan ( 2011-2016)

31. Philippine MSME Development Plan ( 2011-2016)

32. Philippine MSME Development Plan ( 2011-2016)

33. Philippine MSME Development Plan ( 2011-2016)

34. Philippine MSME Development Plan ( 2011-2016)

35. Philippine MSME Development Plan ( 2011-2016)

36. Philippine MSME Development Plan ( 2011-2016)

37. PH GOVT SME GAME PLAN – FLAGSHIP PROGRAMS
GO MEGOSYO CENTERS , CLUSTERING SME ROVING ACADEMY &SHARED SERVICE FACILITIES (DTI)
SET UP/ MPEX / CAMPI ( DOST )
Clean PRODUCTION TECHNOLOGY ( DOST)
GREEN WORKPLACE PRODUCTIVITY ( DOLE)
INCLUSIVE FINANCE/ CSF (BSP)

38. PH GOVT SME GAME PLAN – FLAGSHIP PROGRAMS
BUSINESS LICENSING STREAMLINING ( LGU , NCC)
TRADE FACILITATION FOR SMES (CUSTOMS)
PHILIPPINE DIGITAL STRATEGY – SMARTER SMES – ( DOST)
K-12 IMPLEMENTATION ( DEP ED, CHED, TESDA )

39. SOME ENABLING LEGISLATIVE ACTIONS
GO NEGOSYO ACT
- Republic Act ( 15 July 2014) NEGOSYO CENTERS & CAPABILITY BUILDING for SMES
FOOD SAFETY ACT
-Republic Act ( 23 August ) FOOD SAFETY and NQI SUPPORT for the FOOD SECTOR
Foreign Ships Co-loading Act/ Cabotage Law – Republic Act ( 21 July 2015)
Philippine Competition Law
–Republic Act ( 21 July 2015 )

40. SME CSR ISSUES AND CHALLENGES

47. BARRIERS TO CSRS IN SMES
PERSONAL CHARACTERISTICS OF OWNERS OF MSMES
Mindset of owners
Lack of time
Lack of specialized knowledge
ORGANIZATIONAL CHARACTERISTICS
“informal “ and owner-centric
Heterogeneous is size, resources , management style and personal relationships

48. = + EIGHT RIGHTS OF SCM Upstream Downstream SUPPLY SIDE DEMAND SIDE
Supplier
Manufacturer
Distributor
Retailer
Customer
Upstream
Downstream
SUPPLY SIDE
DEMAND SIDE
The right
Product
Higher
Customer Value
Time
Customer
Quantity
Supplier
Price = +

49. What It Takes an SME to Support a Global Retailer-
What It Takes an SME to Support a Global Retailer
8 June 2015
Atlanta, Georgia
William S. Lorenzana Jr.
VP Corporate Supply Chain

50. JFC is a global QSR organization composed of
11 brands with a system wide sales of US$ 2.7 billion in 2014 and a network of over 3,000 stores across South East Asia, China, the Middle East & the U.S.A

51. 85 119 409 2,317 72 We are in the QSR Business Q-uick S-ervice
R-estaurant
With global presence of over 3,000 stores worldwide, plus 146 JV stores.

52. SUPPLY DEMAND Suppliers Stores Marketing R&D Forecast/New Products
Orders
Deliveries
Translation
SUPPLY
Production Plans
Purchase Plans
Finished Goods
Assembled Orders
Planning
Warehousing
Outbound
Logistics
Manufacturing
Purchase Plans
Pricing/Contracts
Raw/Packaging Materials
Traded Items
Suppliers
Procurement

53. Demand Forecast Make or buy? Toll Mfg Traded Mfg Replenishment Plan
Opportunities for SMEs (# of SKUs):
Services: 200
Spare Parts: 1700
Finished Products: 800
Traded Items: 5500
Returnable Packaging: 10
Raw Materials: 1800
Total PH Suppliers: 1350
Demand
Forecast
Make or buy?
Toll
Mfg
Traded
Mfg
Purchase Plan
Production Plan
Replenishment Plan

54. INTEGRATION

55. The Farmer Entrepreneurship Program or FEP started in 2008 as a CSR program, aimed to help increase the income of farmers by linking them directly to Jollibee’s supply chain. We embarked on this program to partner with like-minded institutional partners, like the Catholic Relief Services, a US-based NGO, with a strong capability in agro-enterprise technology. We also turned to a government financing agency and its network of microfinance institutions. Together, the partnership provided the farmers with the critical inputs to lead to success -- agro-enterprise training and organizing, access to financing, and linkage to institutional markets. Our Supply Chain teams patiently trained the farmers on quality standards, receiving processes and other business transaction procedures, concerns that a regular suppliers (or SMEs) face daily.

56. Jollibee Foods Corporation opened its supply chain to include small farmers as producers. Jollibee Group Foundation also leverages the JFC network to encourage other institutional markets to be part of FEP.

57. Jeannie E. Javelosa
Co-Founder & Director, ECHOstore Sustainable Lifestyle
Trustee & President, ECHOsi Foundation
ECHO = Environment Community Hope Organization

58. Tri-Concept: An ECHOsystem
Green fair trade community-made products / Natural, fresh sustainable farm produce or community food

59. Retail + Licensing + Online E-commerce + Export

60. Platform for Sustainable Green Products

62. ECHOstore’s Second Brand
Why empower women?
Women-owned, operated, led
89% of suppliers are women micro-entreps or small businesses
90% of customers are women
GREAT WOMEN Brand
GREAT -Gender Responsive Economic
Action for the Transformation of Women
ASEAN products and supply chain for global markets

68. Universal Branding and Packaging
Creating a regional women’s brand and lifestyle and selected food products
Product Design Directions:
Creating products with a oneness of diversity of cultures in ASEAN
Business Direction:
Creating a regional
product-supply-fulfillment chain

69. = + EIGHT RIGHTS OF SCM Upstream Downstream SUPPLY SIDE DEMAND SIDE
Supplier
Manufacturer
Distributor
Retailer
Customer
Upstream
Downstream
SUPPLY SIDE
DEMAND SIDE
The right
Product
Higher
Customer Value
Time
Customer
Quantity
Supplier
Price = +

70. Mimaropa Ventures http://mimaropaventures.ph

77. Mimaropa Ventures http://mimaropaventures.ph

78. Shopinas www.shopinas.com

79. SUSTAINABILITY FLEXIBILITY COST COMPETITIVENESS UPGRADING & SCALE UP
RESILIENCE FOR SME CSR
FLEXIBILITY
OPERATIONAL EXCELLENCE
COST COMPETITIVENESS
UPGRADING & SCALE UP
SUSTAINABILITY

80. SME COMPELLING ACTIONS
COMPETITIVE MINDSET
CONFORMANCE to GLOBAL STANDARDS
COMPLIANCE to GLOBAL BEST PRACTICES
CONNECTIVITY TO MARKETS

81. SOME SPECIFIC IMPROVEMENT FOR CSRs in SMES
Promote and proliferate more social entrepreneurships
Strengthen the supply and value chains for SME in partnership with large companies
SMEs as suppliers and subcontractors
Expand and embed CSR knowledge and best practices in enterprise development in existing SME development programs
Develop and enhance HR tools and practices to improve CSR practices in SMEs

82. ALIGN WITH GLOBAL Social Accountability STANDARDS
Global Reporting Initiative ( GRI)
Social Accountability 8000
Ethical Trading Initiative ( ETI) Base Code
Accountability Standard 1000
OECD Guidelines for Multi-Nation Enterprises
ISO –Environmental System Standard
ISO 9001 – Quality Management System Standard
OSHAS –Occupational , Health, Safety Assessment System

83. Make the prevailing “silent social responsibility” of SMEs VISIBLE and FELT

84. INCLUSIVE GROWTH
EVERYONE BENEFITS.
EVERYONE CONTRIBUTES.

85. Thank you for listening and have great day .