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If You are not at the Table, You are on the Menu: An Examination of Small and Medium-sized Enterprises’ Place in the Philippine State-Business Relations
Depante, Lianne Angelico C.
Tan, Alexander C.
Depante, Lianne Angelico C.
|Issue Date:||2021-04-01 11:27:37 (UTC+8)|
Small and Medium-sized Enterprises (SMEs) are the backbone of many economies. This is especially true in the Philippines’ case, where 99.52% of businesses fall under the category. Yet despite accounting for nearly all firms and employing the majority of the labor force, Philippine SMEs contribute a mere 35.7% to the GDP, performing among the worst in the region. As such, scholars have tried to illuminate this conundrum, with much of the studies underscoring economic and firm-based explanations. Such approaches, however, are limited as they overlook the broader political context in which SMEs operate in. To fill this lacuna, this work has combined interest-based and institutional approaches by using a modified theory of state-business relations as a framework in analyzing the Philippine SME sector. With literature review and key informant interviews as its data-gathering instruments, this thesis qualitatively examined the organization of the Philippine state and the SMEs and the nature of the relationship between the two. The findings of this study’s contemporary analysis of state-SMEs relations indicate that, on the government side, the state’s neoliberal orientation has hindered the agencies tasked to develop the SMEs from becoming effective development partners, whereas on the SMEs’ side, the sector is largely unorganized, limiting its potential to serve as a check-and-balance on the government’s ineffective policy implementation. Under these circumstances, the nature of interaction between the two has been beset by issues regarding credibility and transparency, perversely impacting the way SME policies are formulated and implemented. To understand the situation that led to this point, a historical analysis was conducted, particularly by investigating the critical junctures and events that contributed to the formation of the country’s lopsided industrial structure, the unorganized nature of SMEs, and the state’s neoliberal orientation. By and large, this work has demonstrated that, contrary to market fundamentalism, politics matters in development and the economy. It is in this light that the agenda of political empowerment of SMEs is recommended to be taken by scholars, policy-makers, and the SMEs themselves if we are to flip the table that hinders the tiny firms from becoming potent, productive forces in the economy.
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