Impact Assessment of State Assistance Program to Agri-based Micro, Small and Medium Enterprises in the Philippines

Abstract

The Philippine business economy is largely fuelled by micro, small and medium enterprises. In order to cope with the competition with large firms in the industry, the government has poured investments in form of technology upgrading in the last 15 years. The research aimed to assess the impact on productivity and profitability of state assistance to agri-based micro, small enterprises. Partial Budget Analysis was used in assessing the profitability of the proponent after the intervention. The study showed an average increase in enterprises' production volume, sales level, and generated employment by 157.9%, 51.65%, and 191.82%, respectively. Further, the assistance generated a positive increase in income. However, the defective equipment, failure to meet the repayment schedule, and non-compliance to documentary requirements were among the major problems encountered by the proponent during program implementation. Nonetheless, the state assistance was able to spur innovations among the enterprises. Market potential, market knowledge, financial capability to repay the loan as well as the entrepreneur’s resiliency were some of the observed success factors of MSMEs. With its positive firm-level impact, the state assistance program has generally been able to improve its proponent’s competitiveness and thus worthy for continuous implementation.