The contribution of micro-, small and medium enterprises (MSMEs) to our economy cannot be gainsaid. In the 2014-2015 Global Competitiveness Report of the World Economic Forum, we ranked 52 out of the 144 countries surveyed. Although we are behind our ASEAN neighbors Singapore (2), Malaysia (20), Thailand (31), and Indonesia (34), the study took note that the Philippines’ “gain of 33 places since 2010 is the largest” among all the 144 countries surveyed. It said that the main strengths of our “leapfrog” in the rankings lie in a sound macroeconomic environment, the size and sophistication of the market, and increasing efficiency and conduciveness of the finance sector to business activities. The Philippines has now been called a “breakout nation,” and is poised to be the new global economic miracle.
Based on statistics from the Department of Trade and Industry (DTI), there are around 780,000 business enterprises operating in the Philippines, with 96% or approximately 777,000 classified as MSMEs. Only around 3,000 are operating as large companies. Out of those 777,000 MSMEs, 92% or around 710,000 are categorized as micro-enterprises. A majority of the MSMEs are engaged in wholesale and retail (386,000); followed by manufacturing (112,000); hotels & restaurants (97,000); real estate & renting activities (47,000); and other community, social and personal services (44,000). In terms of employment, MSMEs generated more than 3.5 million jobs versus the two million jobs generated by large companies. Moreover, 25% of the country’s export revenues are attributable to MSMEs, with around 60% of the country’s exporters classified as MSMEs.
The government continues to create an environment conducive to the establishment and operation of MSMEs, what with the two primary laws that govern and regulate the promotion of MSMEs -- Republic Act No. 6977 or the Magna Carta for Small Enterprises (which was amended by Republic Act No. 8289), and Republic Act No. 9178 or the Barangay Micro Business Enterprises Act of 2002.
RA 9178 redefined the classification of business enterprises registered and operating in the Philippines as follows: (a) micro-enterprise, where capitalization does not exceed P3 million; (b) small enterprise, with a capitalization that exceeds P3 million but not more P15 million; (c) medium enterprise, with a capitalization that is more than P15 million but does not exceed P100 million; and (d) large enterprise, where capitalization is more than P100 million.
The law also encourages the promotion of micro-enterprises by extending fiscal and non-fiscal incentives (e.g., income tax exemption, exemption from the coverage of the minimum wage law, priority to a special window setup, technology transfer, production and management training, and marketing assistance programs).
RA 6977 mandates the government to help MSMEs by creating a conducive business environment, improving access to financing, providing adequate business support, providing training on entrepreneurship and worker skills, providing effective linkages between MSMEs and large companies, and strengthening government-private sector partnership. To oversee the programs for MSMEs, the MSME Development Council was created. The council developed the MSMED Plan 2011-2016, which serves as the blueprint for all projects geared toward the development of the MSMEs.
As a majority of the MSMEs are involved in wholesale/retail and service-oriented industries, effective branding/marketing strategies are essential. Data derived from the Intellectual Property Office of the Philippines (IPO) reveals a steady increase in the number of trademark applications filed by local owners -- from 7,048 in 2005 to 10,572 in 2011. In terms of our competitiveness ranking in the report, we ranked well in intellectual property protection at 87, as opposed to Thailand’s 101 and Vietnam’s 123.
The success story of Jollibee is a clear testament that the development of a sound brand strategy plays a crucial role in one’s business. Unfortunately, not all Filipino entrepreneurs possess this knowledge, or even how to pick the appropriate trademark for one’s goods and services. Not many local businessmen know that a trademark registration issued by the IPO is different from a business name registration issued by the DTI and from a corporate name registration issued by the SEC. More importantly, not many local entrepreneurs are aware that in the hierarchy of property rights, trademark protection is placed on a higher tier than the protection extended to a corporate name registration and business name registration.
With respect to choosing the correct brand, one must consider the brand or “look” that will come to carry not only the goods or services but the whole business as well. Factors such as availability for use in commerce, availability for registration, and inherent registrability of the chosen brand must be taken into account. One should conduct a trademark availability search using, among others, the publicly available searching tools of the IPO. Also, hiring the services of an intellectual property lawyer may be useful in order to secure a more informed opinion regarding a chosen brand or logo. These costs entailed during the initial business development stages may prove to be justified if, in the long run, litigation for trademark infringement, unfair competition, trademark opposition/cancellation cases are avoided, which are definitely more expensive and cumbersome.
Choosing the “right” brand is only half of the promise of success; how to market or make “notorious” one’s chosen brand is another matter. The traditional way of securing trademark registration from the IPO may not suffice to accommodate the marketing strategies available nowadays. With the prevalence of online and mobile communications, “going online” and “going mobile” are the way to go. In the report, the Philippines ranks better with most of its ASEAN neighbors in terms of degree of customer orientation (25) and availability of latest technologies (58). Coming up with a catchy Web site address (or domain name) and securing domain name registration are now business necessities. Moreover, apart from a regular trademark registration from the IPO and domain name registration secured from the domain name registry, one can also seek further registration of the same trademark as an Internet domain name also from the IPO. This type of IPO registration follows the same procedure as that of a regular trademark application filed with the IPO, only that the process is faster.
Opportunities for success among local MSMEs are limitless, provided that the foundation of sound business tools are laid early on. Selecting the right trademark to identify one’s business, goods and services is one of the factors toward attaining sustainability of any commercial undertaking. This promise of success to Filipino entrepreneurs is bright, especially to those who realize the importance of sound branding.
John Paul M. Gaba is a partner of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices.
jmgaba@accralaw.com
The government continues to create an environment conducive to the establishment and operation of MSMEs, what with the two primary laws that govern and regulate the promotion of MSMEs -- Republic Act No. 6977 or the Magna Carta for Small Enterprises (which was amended by Republic Act No. 8289), and Republic Act No. 9178 or the Barangay Micro Business Enterprises Act of 2002.
RA 9178 redefined the classification of business enterprises registered and operating in the Philippines as follows: (a) micro-enterprise, where capitalization does not exceed P3 million; (b) small enterprise, with a capitalization that exceeds P3 million but not more P15 million; (c) medium enterprise, with a capitalization that is more than P15 million but does not exceed P100 million; and (d) large enterprise, where capitalization is more than P100 million.
The law also encourages the promotion of micro-enterprises by extending fiscal and non-fiscal incentives (e.g., income tax exemption, exemption from the coverage of the minimum wage law, priority to a special window setup, technology transfer, production and management training, and marketing assistance programs).
RA 6977 mandates the government to help MSMEs by creating a conducive business environment, improving access to financing, providing adequate business support, providing training on entrepreneurship and worker skills, providing effective linkages between MSMEs and large companies, and strengthening government-private sector partnership. To oversee the programs for MSMEs, the MSME Development Council was created. The council developed the MSMED Plan 2011-2016, which serves as the blueprint for all projects geared toward the development of the MSMEs.
As a majority of the MSMEs are involved in wholesale/retail and service-oriented industries, effective branding/marketing strategies are essential. Data derived from the Intellectual Property Office of the Philippines (IPO) reveals a steady increase in the number of trademark applications filed by local owners -- from 7,048 in 2005 to 10,572 in 2011. In terms of our competitiveness ranking in the report, we ranked well in intellectual property protection at 87, as opposed to Thailand’s 101 and Vietnam’s 123.
The success story of Jollibee is a clear testament that the development of a sound brand strategy plays a crucial role in one’s business. Unfortunately, not all Filipino entrepreneurs possess this knowledge, or even how to pick the appropriate trademark for one’s goods and services. Not many local businessmen know that a trademark registration issued by the IPO is different from a business name registration issued by the DTI and from a corporate name registration issued by the SEC. More importantly, not many local entrepreneurs are aware that in the hierarchy of property rights, trademark protection is placed on a higher tier than the protection extended to a corporate name registration and business name registration.
With respect to choosing the correct brand, one must consider the brand or “look” that will come to carry not only the goods or services but the whole business as well. Factors such as availability for use in commerce, availability for registration, and inherent registrability of the chosen brand must be taken into account. One should conduct a trademark availability search using, among others, the publicly available searching tools of the IPO. Also, hiring the services of an intellectual property lawyer may be useful in order to secure a more informed opinion regarding a chosen brand or logo. These costs entailed during the initial business development stages may prove to be justified if, in the long run, litigation for trademark infringement, unfair competition, trademark opposition/cancellation cases are avoided, which are definitely more expensive and cumbersome.
Choosing the “right” brand is only half of the promise of success; how to market or make “notorious” one’s chosen brand is another matter. The traditional way of securing trademark registration from the IPO may not suffice to accommodate the marketing strategies available nowadays. With the prevalence of online and mobile communications, “going online” and “going mobile” are the way to go. In the report, the Philippines ranks better with most of its ASEAN neighbors in terms of degree of customer orientation (25) and availability of latest technologies (58). Coming up with a catchy Web site address (or domain name) and securing domain name registration are now business necessities. Moreover, apart from a regular trademark registration from the IPO and domain name registration secured from the domain name registry, one can also seek further registration of the same trademark as an Internet domain name also from the IPO. This type of IPO registration follows the same procedure as that of a regular trademark application filed with the IPO, only that the process is faster.
Opportunities for success among local MSMEs are limitless, provided that the foundation of sound business tools are laid early on. Selecting the right trademark to identify one’s business, goods and services is one of the factors toward attaining sustainability of any commercial undertaking. This promise of success to Filipino entrepreneurs is bright, especially to those who realize the importance of sound branding.
John Paul M. Gaba is a partner of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices.
jmgaba@accralaw.com
source: Businessworld
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