Project assistance completion report : small and medium enterprise development project, project no. 492-0359

The report focuses on Phase II of the project (1986-90). In Phase II, activities were continued in regions I, V, VI, and XII, discontinued in region II, and initiated in regions IV and XI. Activities included: (1) integrated support to targeted industries (food processing, metalworking, gifts, and housewares); (2) policy studies; and (3) support to People's Economic Councils (PECs) nationwide. The International Executive Service Corps component was canceled. Accomplishments in the three above areas were as follows. Targeted industry support was largely channeled through 218 SME sectoral associations (vs. a target of 30) and the Product Development and Design Center of the Philippines. Besides needs analyses, this component conducted 142 TA programs, 177 local study missions, and 843 skills training programs on such topics as food packaging, production techniques, machinery maintenance and use, and adaptation of traditional handicraft designs to modern markets. In addition, 12 small business institutes implemented management training activities and extended management services to associations in the targeted regions. Market development activities -- regional and island trade fairs, product display centers, domestic trade missions to bring regional producers to Manila, and production of promotional trade brochures -- were short of target numerically, but helped bridge the gap between producers and buyers. It is estimated that the four island fairs generated cash sales of over $2.5 million. Support for common service facilities included equipment to upgrade a food testing laboratory of the Department of Science and Technology and detailed needs analyses and feasibility studies for foundries, smithies, and heat treatment facilities; the latter are not yet operational, however. The studies component financed 3 activities (vs. a target of 20): (1) a comprehensive list of local raw manufacturing materials, including source, and potential supply; (2) identification of traditional craftspersons, together with a program to promote traditional crafts; and (3) a study on filth levels aimed at improving the production, sanitation, and safety of processed ethnic roof exports. Support to PECs reached 726 councils (vs. a target of 300) and included implementation of 300 training programs to help PECs interact with government agencies in improving the delivery of government services and furthering local economic development. The PEC component also funded 67 seminars aimed at stimulating investment outside Metro Manila, as well as 3 regional and 2 national PEC assemblies. A survey of assisted entities indicates that the project was effective in promoting SME development. For example, as a result of Phase II assistance to the SME associations, employment among responding SMEs rose from 500 to 1,200 and sales volume jumped from Pesos 92.5 M to Pesos 156 M. Similar increases were reported as a result of assistance to the PECs. The project teaches that a little assistance can go a long way in equipping people with skills, raising their consciousness for enterprise, and helping them to see the value of cooperativism.