F

MSMEs in the Philippines

Micro, small and medium enterprises (MSMEs) are
considered the backbone of many economies in the
world including the Philippines. Accounting for 99.5%
acts
of the total number of business establishments in the in
igures
country, the Department of Trade and Industry (DTI)
estimated that MSMEs contributed 35.7% of the
total value-added or gross domestic product in 2018.
MSMEs generated 5.7 million jobs or 63.2% of the total
employment in 2018. Collectively, MSMEs are those
Congressional Policy and Budget Research Department
with employee size of less than 200 and with asset size
House of Representatives
of below P100 million. June 2020 (No.19 )
Table 1
Classification of Enterprises
Number of
Size Asset Size Table 2
Employees
Micro 1-9 Up to P3,000,000 Number of Establishments by Sector, 2018
Small 10-99 P3,000,001 - P15,000,001 Sector Micro Small Medium Large Total
Medium 100-199 P15 m ≤ P100 m
Mining and Quarrying 492 302 21 35 850
Large 200 and above P100 m ≥ Electricity, Gas, Steam,
Source: National Statistics Office; Small and Medium Enterprise Development & Air Conditioning
Council Resolution No. 1, Series 2003 as cited in DTI’s 2018 Philippine MSME Supply 478 633 98 89 1,298
Statistics in Brief
Water Supply;
Sewerage, Waste
Total Number of Enterprises. Latest data from the Management and
Philippine Statistics Authority (PSA) showed that the Remediation Activities 677 711 49 29 1,466

total number of business establishments in the country Construction 2,304 1,715 226 262 4,507
Agriculture, Forestry,
reached 1,003,111 in 2018. Micro enterprises or those and Fishing 5,837 2,512 157 173 8,679
with less than 10 employees accounted for 88.4% Transport and Storage 7,264 3,511 231 194 11,200
of the total number of establishments, followed by Real Estate Activities 9,478 1,975 79 63 11,595
small enterprises with 10.6%. Both medium and large Arts, Entertainment, and
Recreation 13,755 1,563 34 41 15,393
enterprises accounted for about 0.5% each of the total Professional, Scientific
number of establishments. and Technical Activities 13,617 2,164 104 89 15,974
Education 9,105 8,312 391 271 18,079
Chart 1 Administrative and
Number of Establishments, 2018 Support Service
Activities 14,073 3,022 474 1,144 18,713
Human Health and
Social Work Activities 26,076 2,325 200 223 28,824
Information and
Medium , Communication 27,421 1,973 153 140 29,687
Small , 106,175, 4,895, 0.49% Financial and Insurance
10.58%
Activities 37,813 8,053 167 183 46,216
Other Service Activities 62,795 3,347 20 11 66,173
Micro , 887,272, Large , 4,769, Manufacturing 103,590 11,678 1,067 1,133 117,468
88.45% 0.48% Accommodation and
Food Service Activities 125,396 18,802 337 105 144,640
Wholesale and Retail
Trade; Repair of Motor
Vehicles & Motorcycles 427,101 33,577 1,087 584 462,349
Source: 2018 Update of the List of Establishments, PSA
Total 887,272 106,175 4,895 4,769 1,003,111
Sectoral Classification. The Wholesale and Retail Note:Enterprises were classified based on the 2009 Philippine Standard
Trade; Repair of Motor Vehicles and Motorcycles sector Industrial Classification
Source: 2018 Update of the List of Establishments, PSA
with 461,765 enterprises accounted for the bulk or
46.4% of the total MSMEs in 2018. This was followed
by Accommodation and Food Service Activities and Meanwhile, there were 4,769 large enterprises recorded
Manufacturing with 144,535 and 116,335 with a share in 2018 of which 1,144 are in the Administrative and
of 14.5% and 11.7% of total, respectively. These three Support Services or a 24.0% share of the total. This
industries jointly accounted for 72.4% of total MSMEs was followed by Manufacturing with 1,133 enterprises
in 2018. Based on DTI estimates, the Manufacturing or a 23.8% share. Wholesale and Retail Trade; Repair
sector contributed the largest share to the country’s of Motor Vehicles & Motorcycles followed a far third with
total value added at 6.9%. 584 enterprises or 12.2% share of the total.
 Table 3 Employment. MSMEs generated a total of 5.7 million
Number of Establishments by Region, 2018 jobs in 2018 which accounted for 63.2% of the total
Region Micro Small Medium Large Total employment in the country. Collectively, MSMEs
NCR 166,921 34,523 1,868 1,938 205,250 generated 71.7% or 2.4 million jobs higher compared to
CAR 18,783 1,587 47 49 20,466
the 3.3 million generated by large enterprises. Among
Ilocos Region 46,708 3,977 122 70 50,877
the MSMEs, micro enterprises accounted for the
Cagayan Valley 28,547 2,119 52 35 30,753
highest share of the total employment in 2018 at 28.9%
Central Luzon 104,875 10,754 444 385 116,458
or equivalent to 2.6 million jobs. Average employment
CALABARZON 133,640 13,778 778 811 149,007
size of a micro enterprise during the period was 2.94.
MIMAROPA 21,948 1,914 57 33 23,952
Small enterprises, meanwhile, accounted for 27.0% of
Bicol Region 37,111 3,215 118 70 40,514
Western Visayas 55,482 5,894 214 193 61,783
the total employment or equivalent to 2.4 million jobs.
Central Visayas 61,176 8,775 444 537 70,932
Eastern Visayas 28,324 2,355 70 40 30,789 By sector, the Wholesale and Retail Trade; Repair
Zamboanga of Motor Vehicles and Motorcycles created the
Peninsula 30,888 2,216 73 67 33,244
Northern Mindanao 33,040 4,079 155 138 37,412
highest number of jobs with 2.0 million or 35.7% of
Davao Region 52,449 5,758 252 226 58,685
the total MSMEs employment. Job creation in the
SOCCSKSARGEN 41,581 3,121 120 118 44,940 Accommodation and Food Service Activities and
CARAGA 18,069 1,687 67 50 19,873 Manufacturing sectors followed a far second and third
ARMM 7,730 423 14 9 8,176 with a share of 15.4% and 13.4%, respectively. On the
Philippines 887,272 106,175 4,895 4,769 1,003,111
other hand, large enterprises which account for only
Source: 2018 Update of the List of Establishments, PSA
0.5% of the total number of establishments generated
36.8% of the total employment. The Administrative and
Regional Distribution. Almost half of the MSMEs in Support Service Activities which includes the provision
2018 were located in three regions, namely NCR (20.4% of a range of day-to-day office administrative services
with 203,312 establishments), CALABARZON (14.8% such as financial planning, billing and record keeping
with 148,196) and Central Luzon (11.6% with 116,073). generated the highest number of jobs with 1.2 million
Other regions which hosted a significant number of or 34.7% of the total employment generated by large
MSMEs are Central and Western Visayas and Davao. enterprises.

Table 4
Employment in Enterprises by Sector, 2018
Employment Grouping Share to Total by Sector
MSMEs Total
Micro Small Medium Subtotal Large (MSMEs + Large) MSMEs Large
Mining and Quarrying 1,960 8,563 2,857 13,380 25,712 39,092 0.2 0.8
Water Supply; Sewerage, Waste
Management and Remediation Activities 3,132 19,655 6,762 29,549 11,324 40,873 0.5 0.3
Electricity, Gas, Steam, and Air
Conditioning Supply 2,137 18,172 14,291 34,600 33,415 68,015 0.6 1.0
Arts, Entertainment, and Recreation 36,653 30,085 4,508 71,246 33,884 105,130 1.2 1.0
Real Estate Activities 28,610 47,144 10,329 86,083 26,562 112,645 1.5 0.8
Professional, Scientific and Technical
Activities 42,903 53,443 14,549 110,895 67,200 178,095 1.9 2.0
Agriculture, Forestry, and Fishing 21,127 65,093 20,733 106,953 81,051 188,004 1.9 2.4
Other Service Activities 172,943 52,898 2,658 228,499 4,435 232,934 4.0 0.1
Information and Communication 55,846 52,521 21,099 129,466 103,789 233,255 2.3 3.1
Human Health and Social Work Activities 67,752 61,160 27,712 156,624 100,795 257,419 2.7 3.0
Transport and Storage 27,300 93,973 30,038 151,311 107,798 259,109 2.6 3.2
Construction 9,313 51,313 30,751 91,377 197,774 289,151 1.6 5.9
Education 39,566 210,069 52,335 301,970 110,331 412,301 5.3 3.3
Financial and Insurance Activities 146,126 147,264 22,836 316,226 164,126 480,352 5.5 4.9
Accommodation and Food Service
Activities 402,659 437,948 41,848 882,455 38,837 921,292 15.4 1.2
Administrative and Support Service
Activities 42,203 88,098 64,722 195,023 1,155,674 1,350,697 3.4 34.7
Manufacturing 311,605 310,348 145,878 767,831 841,950 1,609,781 13.4 25.3
Wholesale and Retail Trade; Repair of
Motor Vehicles and Motorcycles 1,198,386 697,364 145,024 2,040,774 224,144 2,264,918 35.7 6.7
Total 2,610,221 2,445,111 658,930 5,714,262 3,328,801 9,043,063 100.0 100.0
Share to Total By Type of Enterprise 28.9 27.0 7.3 63.2 36.8 100.0
Source: 2018 Update of the List of Establishments, PSA