July 10, 2026 l The Manila Times
Imagine a Filipino entrepreneur who has spent years perfecting a line of processed food products. Sales are brisk and inquiries begin arriving from buyers in Japan and Europe. It appears to be the breakthrough every entrepreneur dreams of.
Until reality sets in.
Prospective buyers ask whether the factory complies with the Hazard Analysis and Critical Control Points (HACCP) food safety system. They request internationally recognized laboratory test results, documented production processes, traceability records, and certifications demonstrating compliance with global standards.
The products themselves may be excellent. The market may be waiting. Yet without the required certifications and quality systems, the export opportunity disappears.
This scenario is repeated more often than many realize. In today’s global economy, competitiveness depends on whether firms possess the management systems, technical capabilities, and internationally recognized standards that give customers confidence.
A recent World Bank report offers a compelling explanation. It identifies four major constraints to small and medium enterprises’ (SMEs) growth: inadequate managerial and technical skills; weak quality infrastructure; limited market intelligence and business connections; and insufficient long-term finance.
This column focuses on the first three — the building blocks of competitiveness.
The first challenge is management capability. Filipino entrepreneurs possess courage, resilience, and an uncanny ability to spot market opportunities. But growing a small business into a nationally or globally competitive enterprise requires an entirely different set of skills.
Expansion demands stronger financial management, strategic planning, technology adoption, digital transformation, quality assurance, and human resource development.
Many Filipino firms overestimate their technological capabilities, reducing their motivation to modernize. Apparently, managers with overseas education or prior experience in large corporations are significantly more likely to adopt advanced technologies than those without such exposure.
This is an important policy lesson. Greater investments in executive education, mentoring, digital capability building, and partnerships among universities, industry associations, and successful corporations may generate even greater long-term returns. Technology, after all, does not transform firms by itself. Competent managers do.
Suppliers that have successfully entered the supply chains of multinational firms in the electronics and automotive sectors in the Philippines did not succeed because they borrowed more money. They succeeded because they consistently met demanding standards in quality, delivery, documentation, and continuous improvement. Capital followed competence — not the other way around.
The second challenge is quality infrastructure, an issue that rarely captures headlines but profoundly influences exports. The opening example of HACCP illustrates a broader reality. A food manufacturer seeking to export must demonstrate, through documented systems and independently verified certifications, that every stage of production consistently meets internationally accepted food safety standards.
The same principle applies across industries. Furniture exporters, electronics suppliers, and semiconductor firms are expected to meet exacting quality management systems and rigorous certification standards. Competitiveness today is built on compliance, consistency, and credibility.
Unfortunately, Philippine firms continue to lag behind many of their regional competitors. Many exporters are compelled to send products to laboratories in Singapore or Europe because domestic testing and certification facilities remain limited or lack international recognition.
To be fair, there are government initiatives such as the Department of Trade and Industry’s Shared Service Facilities Program, which enables SMEs to access equipment that individual firms cannot afford.
The next frontier is to expand internationally accredited testing laboratories, calibration services, and certification facilities. Expressways and airports move products, but it is quality infrastructure that will allow those products to be accepted when they arrive.
The third challenge is perhaps the least appreciated: information.
Many SMEs simply do not know what multinational corporations or export markets require from prospective suppliers. At the same time, many large companies remain unaware of capable domestic suppliers while sourcing from long-established foreign vendors.
Countries such as Vietnam have integrated more successfully into global value chains. Their governments have deliberately cultivated supplier development programs that introduce domestic firms to multinational manufacturers while helping them satisfy exacting standards.
The Philippines has similar opportunities. The furniture manufacturers in Cebu, food exporters in Mindanao, garment producers in Central Luzon, and technology startups across Metro Manila all have the potential to move higher up the value chain. What may be lacking are stronger management, better information, closer industry linkages, and easier access to internationally recognized standards.
Taken together, these three constraints — skills, quality, and information — form a virtuous cycle. Better managers adopt better technologies. Better technologies produce better products. Better products earn internationally recognized certifications.
Those certifications open larger markets, which in turn justify further investments in innovation and productivity.
Thus, the fundamental policy question is: “How do we help SMEs become enterprises worthy of investment?”
There is an old saying in banking that credit does not solve a bad business; it accelerates a good one. The same principle applies to national competitiveness. Finance does not create competitiveness. It amplifies competitiveness that already exists.
This is where government, the private sector, academe, and business organizations must work together. Universities can strengthen entrepreneurial and management education. Industry associations can mentor smaller enterprises and facilitate supplier development.
Government agencies can invest in testing laboratories, certification systems, and digital platforms that provide the required connection.
Only after firms have built these foundations does financing become truly transformative. That is where the conversation turns in the second part of this series.
***The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX. For comments, email benel_dba@yahoo.com. Photo is from Pinterest.