Opening a Business in the Philippines? Here’s What you Need to know to Get Started

MANILA, PHILIPPINES - In the Philippines, micro, small, and medium enterprises (MSMEs) comprise 99.58% of all businesses in the country and employ 64.67% of the entire workforce and are the driving force of the economy. These businesses, which include small community stores or sari-sari stores, water refilling stations, laundry stations, and many others, not only contribute to the country's GDP but also provide essential services to the local communities.

Such is the outsized importance of MSMEs that the United Nations (UN) designated every June 27 as International MSME Day to raise awareness on their immense contributions to the UN Sustainable Development Goals (SDGs). These enterprises play a pivotal role in driving local and national economies while also supporting the livelihoods of the working poor, women, youth, and vulnerable groups.

It’s no surprise that many Filipinos want to open their own small businesses. A recent survey by Philippine research firm OCTA Research showed that 81% of adult Filipinos want to be entrepreneurs. This desire to start their own businesses reflects the recognition of the opportunities and potential that MSMEs offer, not only in terms of economic growth but also in empowering individuals and communities.

If you’re one of the Filipinos who want to try their hand at starting their own businesses, here are some tips that can help you get started.

Starting an MSME in the Philippines

The first step of every aspiring entrepreneur is deciding what kind of business to open and where to open it if you plan on having a physical storefront. It’s essential to conduct thorough research whether there’s a market for your product or service, enough foot traffic and if the location is appropriate for it.

Aspiring entrepreneurs can also explore a hybrid phygital (a portmanteau of physical and digital) setup including offering online payments or e-commerce options to widen reach and market.

Second, once you’ve decided on the business and where to open it, get your necessary documentation and permits. In the Philippines, businesses are required to register with the Department of Trade and Industry (DTI), if they’re a sole proprietorship, or with the Securities and Exchange Commission (SEC) if it’s a partnership or a corporation.

Businesses also need to get a Mayor's permit or municipal license from the city or municipality where the establishment is located. They also need to register with the Bureau of Internal Revenue (BIR) to ensure proper taxation. If they plan on employing other people to help run the business, registrations with other government agencies such as the Department of Labor and Employment (DOLE) and Social Security System (SSS) are also required.

This may seem like a lot of steps but these registrations and permits ensure that you’re able and willing to run your business properly and legally by following applicable laws and regulations. For a full list of registration and permit requirements, DTI has compiled a list here.

Beyond securing the location and required permits, an important step when it comes to running a business is to protect your business from any unwanted incidents including injuries, burglaries, and accidents. Consider getting small business insurance like NegosyoCare. Created by regional insurtech Igloo in partnership with Malayan Insurance and GCash, NegosyoCare is an insurance product specifically designed to protect MSMEs.

“MSMEs are the backbone of the economy, but they often run on tight budgets and have limited access to financing. This puts them at risk when unexpected events come knocking and disrupt their operations. That's why having small business insurance, like NegosyoCare, is so important. It offers affordable and accessible coverage, giving these businesses the protection they need without breaking the bank,” said Mario Berta, Igloo Philippines Country Manager.

Available via GCash’s GInsure marketplace, NegosyoCare premiums begin at P160 for one-month coverage and up to P525 for one-year coverage. It provides coverage for accidental deaths, total permanent disability due to accident, and disablement or dismemberment due to accident for up to P50,000. Benefits also include medical reimbursement for accidents for up to P5,000, fire cash assistance for P10,000, and coverage for burglary and housebreaking for P10,000.

These tips only scratch the surface of what it takes to run a business in the Philippines, but by taking these steps, aspiring entrepreneurs can set themselves up for success and remember: protect your small business with NegosyoCare, available at the GCash GInsure Marketplace.

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About Igloo:

Igloo is the first full-stack insurtech firm to emerge from Singapore. It has offices in Singapore, Indonesia,  Thailand,  The  Philippines,  Vietnam  and  Malaysia  and  tech  centres in China and India.  With a mission of making insurance accessible for all, the firm leverages big data, real-time risk assessment, and end-to-end automated claims management to create B2B2C insurance solutions for platform companies and insurance companies. Igloo’s insurance solutions enable companies  to  eliminate  their  exposure  to operational  risk,  create  new  revenue  streams,  and optimise  and  enhance  existing  products  and  services.  Igloo  has  partnered  with  over  55  well-known   brand   names   across   the   markets   in   various   verticals,   including   insurance, telecommunications, e-commerce, hospitality, health tech and financial services.

For more information, please visit https://www.iglooinsure.com/.

2022 Hybrid National Food Fair Successfully Generates P65-M Revenues for MSMEs

The recently-concluded five-day 2022 Hybrid National Food Fair was a huge success, generating a total of Php65.49-million in revenues for the 252 participating exhibitors. Of this amount, Php43.42-million were cash or retail sales, Php10.5-million were booked orders, and another Php11.57-million are under negotiation. The event was able to attract 25,455 visitors to the physical fair.

The top performers for the event were:

EXHIBITOR	PRODUCTS	REGION
1. Bahaghari Global Food, Inc.	Snack food	4B
2.  Joyful Garden Farm Organic Farmers’ Association, Inc.	Fresh and processed fruits and vegetables	3
3. Penn’s Gourmet, Inc.	Fresh & processed marine products	8
4. Edelyn’s Homemade Nuts	Snack food	3
5. Magallaya Mt. Specialty Coffee	Philippine coffee	CAR
6. Lola Puring’s Food Products	Snack food	3
7. Binuhat Arts & Crafts Trading	Packaging and labeling	CARAGA
8. Khan’s Food Products	Beverages	CARAGA
9. Sally’s Authentic Bicol Express	Cooked food	NCR
10. Ayana’s Siling Kinamayo	Condiments	11

Billed as the biggest domestic trade event since the onset of the pandemic, the 2022 Hybrid National Food Fair brought together MSMEs from the country’s 17 regions to showcase their wares for Metro Manila consumers and also provided B2B business matching opportunities for institutional buyers. For this year's event, 76 new MSME exhibitors were able to comply with the requirements which qualified them to participate in the fair.

Recognizing the growing importance of e-commerce, at least 70 MSMEs also sold their products through permanent online stores on the Lazada e-commerce platform’s simultaneous virtual event, accessed through http://tinyurl.com/nationalfoodfaironlazada.

A digital catalog, SISIDLAN, served as a business matching tool by showcasing more than 270 food entrepreneurs and their products in full color with direct access to their digital stores, social media links, and contact information. Through SISIDLAN, buyers and consumers can directly contact all participating HNFF exhibitors for negotiations and order bookings. It is available for download on this link: https://bit.ly/SISIDLAN.

As the premier domestic trade show for food entrepreneurs, the 2022 HNFF included special settings to elevate the food fair experience. Show highlights included a Negosyo Center One-Stop-Shop; Digital Partners Lounge; Fresh Produce Pavilion; KAPEtirya Philippine Coffee Pavilion; PINASarap! Innovative Food Gallery; Tara, Kain Tayo! Tablescape and Bar Special Setting; and #FlexPHridays Photo Wall Corner. A special setting by the Design Center of the Philippines focused on “FOODTURES: Key Directions in Functional Food,” while the DTI-Comprehensive Agrarian Reform Program had a Negosyo Agraryo special setting.

During the fair, the daily program of activities delivered a total of 28 business talks, 9 cooking demos, 4 wine-mixing shows, and 4 video presentations. The workshops were open to the public and were also livestreamed on BDTP’s Facebook page.

The physical component of the 2022 Hybrid National Food Fair was held from June 1-5 at the Megatrade Halls of SM Megamall in Mandaluyong City. The online component on the Lazada e-commerce platform was extended until June 8 as part of Lazada’s 6.6 mid-year Mega Sale.

The 2022 Hybrid National Food Fair was organized by the DTI-Bureau of Domestic Trade Promotion (BDTP) in cooperation with the DTI-Regional Operations Group. For more information about this and other programs of the DTI-BDTP, please follow their social media accounts on Facebook (DTI.BDTP), Instagram (dti.bdtp), and Twitter (@DTI_BDTP). You may also email BDTP Director Marievic M. Bonoan at bdtp@dti.gov.ph.

Collaboration: A Key in Creating Sustainable Agri-Enterprises

Limited market information and market access are two major obstacles to increased smallholder farmers’ income. According to studies, farmers in grassroot communities often lack access to profitable, value-added markets. In the absence of critical supporting functions, such as infrastructure and service provision – farmers struggle to transform their traditional subsistence farms into a feasible commercially oriented production. Buyers, on the other hand, such as wholesalers, find it difficult to get the quantity and quality of produce that they need for processing on a timely basis. Because of this challenge, SM Foundation collaborated with various government agencies, and engaged various SM business units such as the SM Development Corp. (SMDC), SM Supermalls and SM Markets to ensure that local farmers under the Kabalikat Sa Kabuhayan (KSK) program have venues where they can sell their produce amid the COVID-19 pandemic.

From training KSK participants in practicing sustainable farming technologies via technology transfer and product development, SMFI, together with various SM business units used the power of collaboration to create farm-market linkage - which intends to create a powerful driver of rural poverty reduction.

Team social good

The Good Guys Market is a weekend market set up in SMDC properties to connect small-scale farmers directly with consumers—condo residents. This initiative links around 26,000 small-scale farmers directly with consumers.

Together with SM Supermalls, SMFI launched the Green Lane initiative. Led by the wives of the KSK farmers, the social enterprise offers a wide variety of quality yet affordable indoor and landscape plants which cater to every enthusiast’s preference. In addition, the team also launched the KSK Farmers’ Market Day to provide farmers with market exposure in select SM Malls nationwide.

Meanwhile, SMFI also partnered with SM Markets in creating market for onion farmers. Through the partnership, SMFI was able to establish specialized onion pop-up booths creating a stable market for small scale onion farmers.

Millions of smallholder farmers are seeking ways to improve the productivity of their farms and to improve their market performance. Modern farming technologies, paired with market linkage, such as the SM KSK, plays a vital role in improving the livelihood of small-scale farmers and their families.

SM Foundation’s Kabalikat Sa Kabuhayan (KSK) is SMFI’s Social Good program on sustainable agriculture that intends to uplift the lives of Filipinos in grassroot communities through sustainable agriculture via technology transfer, product development and farm-market linkage. To date, the program has trained more than 28,500 farmers from more than 900 cities/municipalities nationwide.

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Shopee Provides MSMEs with All-Around Marketing Support to Grow their Online Business

MANILA, NOVEMBER 11, 2021 - As society becomes more digitalized, e-commerce plays a significant role in helping groom and grow entrepreneurs who can meet the needs of consumers. More people in the region are coming online, and this number is expected to reach around 380 million by 2026. In order to help brands and MSMEs establish and strengthen their online presence, Shopee, the leading e-commerce platform in Southeast Asia and Taiwan, focuses on developing a strong support ecosystem that makes it simple for them to launch and grow their online business. 

This includes enhanced marketing tools, knowledge sharing and upskilling, as well as sustained guidance from Shopee, to help business owners tap into various markets, increase their monthly average sales, and achieve notable e-commerce growth as a whole. 

Shopee Seller Education 

Shopee provides the necessary support and seminars to equip aspiring entrepreneurs with the e-commerce knowledge they need to succeed. Just this year, Shopee launched its first Shopee University Summit where industry leaders, successful online sellers, and top brands shared their expertise to help sellers understand the basics of e-commerce and how they can maximize the potential of e-commerce and succeed in growing their business online. The second summit also proved to be a success with 35,000 online viewers. During the summit, participants learned about developing the correct business branding, product photography skills, and leveraging Shopee tools and social media platforms to promote their businesses.  

Shopee sellers can also access Shopee’s Seller Education Hub (https://seller.shopee.ph/edu/home) where they can take helpful e-commerce courses, participate in informative webinars, and read articles about shop management, product listings, operation improvements, and other business matters. 

All-Around Support from Relationship Managers

In addition to marketing tools readily available for use within the app, Shopee also provides MSMEs with constant guidance on how they can improve and grow their business through highly-trained relationship managers (RMs). To fully support a seller’s growth, RMs push for excellent service and tend to the seller’s inquiries, and sometimes going out of their way to cater to the seller’s e-commerce needs.

Kriszel of M A R E Clothing said that their relationship manager helped them greatly, even encouraging them to join big campaigns to grow their business more. “Our relationship manager was very helpful all throughout our Shopee journey. During big campaigns, we were given ample exposure on in-app features like Shopee Feed. Last 10.10, we earned more than 2,000 followers thanks to Shopee’s feature Feed Freebies. We are very grateful for the guidance we received and it is a big factor in our shop’s success.”

Campaigns that Meet Consumer Demand

In addition, Shopee also supports its sellers through big campaigns as local MSMEs stand to benefit from the increased traffic to supercharge their business growth and scale their online presence. Throughout the region, sellers who participated at the recent 9.9 Super Shopping Day recorded 8X more orders compared to an average day, and this coming  11.11 - 12.12 Big Christmas Sale, Shopee continues to provide sellers with marketing tools to further drive sales. The 11.11 - 12.12 Big Christmas Sale is happening until December 12, 2021, and serves as an opportunity for sellers to provide consumers with promos that include ₱1 deals, free shipping with no minimum spend, and 10% off daily vouchers. 

Digital Payment Options with ShopeePay

As digital payments become more integrated into the daily lives of consumers, ShopeePay serves as a multi-functional tool for all their payment needs while providing rewards and safe transactions. Through Shopee’s year-end campaigns like the 11.11-12.12 Big Christmas Sale, ShopeePay will continue to drive greater adoption of digital payments amongst shoppers and merchants, bringing ShopeePay users greater convenience and value while helping businesses access more opportunities in the digital economy.

Martin Yu, Director at Shopee Philippines, said, “To grow in e-commerce, brands and businesses need to be committed to their journey and here at Shopee, we ensure that we are here to guide and support them all throughout. This is why we designed our ecosystem to be end to end: onboarding, training, and scaling their business to meet the demands of their customers. The needs of our stakeholders are ever-changing, and this is why we need to keep evolving.”

For more information about Shopee 11.11-12.12 Big Christmas Sale, visit https://shopee.ph/m/christmas-sale. 

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About Shopee

Shopee is the leading e-commerce platform in Southeast Asia & Taiwan. Shopee connects shoppers, brands, and sellers across Asia and other fast-growing markets, empowering anyone to buy and sell anywhere and at any time. 

 

Shopee offers an easy, secure, and engaging experience that is enjoyed by millions of people daily. It offers a wide product assortment, supported by integrated payments and logistics, as well as popular entertainment features tailored for each market. Shopee is also a key contributor to the region’s digital economy with a firm commitment to helping brands and entrepreneurs succeed in e-commerce.

 

Shopee is a part of Sea Limited (NYSE:SE), a leading global consumer internet company. In addition to Shopee, Sea’s other core businesses include its digital entertainment arm, Garena, and digital financial services arm, SeaMoney. Sea’s mission is to better the lives of consumers and small businesses with technology.

Bill to Institutionalize P3 Program Filed in Senate

Senator Aquilino “Koko” Pimentel III filed on September 19, 2018 a Senate Bill that will institutionalize the Pondo sa Pagbabago at Pag-asenso (P3) Program to further strengthen the landmark micro loan program of President Rodrigo Duterte that will provide relief to micro enterprises through alternative source of financing.

The Senate Bill No. 2017 or “An Act Providing a Socialized Microfinancing Program for Micro Enterprises Thereby Promoting Entrepreneurship” aims to address financing concerns of micro enterprises throughout the country and help them sustain their businesses.

Trade Secretary Ramon M. Lopez welcomed the news, saying it will further ensure funds are made available for micro enterprises to veer them away from onerous loans, particularly the “5-6” money-lending system.

“This is another milestone as we continue our drive to empower our MSMEs and alleviate poverty. Through this bill, we will be able to assist more entrepreneurs to have easy access to P3 loans that come in one-form, one-day processing, and don’t require any collateral, especially those in the countryside,” said Sec. Lopez.

On the other hand, Small Business Corporation (SB Corp) President and CEO Ma. Luna E. Cacanando said the filing of the Senate Bill will strengthen the Corporation’s mandate and will greatly contribute to the development of micro enterprises, which comprises the bulk of the micro, small and medium enterprise (MSME) sector.

Micro enterprises account for 90% out of the 99.6% from the MSME sector.

As the financing arm of the Department of Trade and Industry (DTI), SB Corp is tapped as the lead implementing agency of the P3 Program and is tasked to handle the fund delivery through direct lending to micro enterprises, wholesale lending to conduits that on-lend to micro enterprises.

Likewise, the House of Representatives in June 2018 also adopted a bill that will establish P3 Program as an affordable and easy access alternative source of financing for micro enterprises.

Under House Bill No. 7446 or the "Pondo sa Pagbabago at Pag-asenso" or "P3 Act," the House of Representatives seeks the creation of the “Pondo sa Pagbabago and Pag-asenso” or the P3 Fund, which will be made available for beneficiaries such as market vendors, agri-businessmen and members of cooperatives, industry associations, and cooperators.

As of September 9, 2018, the P3 Program has assisted over 50,000 micro enterprises throughout the country with a total of P1.5 billion of released loans.

Under the P3 Program, a micro enterprise can borrow between P5,000 up to P200,000 depending on its business need and repayment capacity with no collateral requirement.  Interest rate and service fees, all in, do not exceed 2.5% monthly.

The P3 Program serves as an alternative to the P30 billion “5-6” money lending industry that charges 20% nominal interest rate to MSMEs.

“We thank Sen. Koko Pimentel for sponsoring this bill in the Senate and being our partner in strengthening the MSME sector,” said Sec. Lopez.

DTI CHIEF TO LONDON OFWS: USE REMITTANCES TO START BUSINESSES

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez encouraged overseas Filipino workers (OFWs) and their relatives to use remittances to start their own businesses back home to take advantage of the fast growing economy under the Duterte administration. This was conducted at the sidelines of the Philippine government’s trade and investment roadshow in London on Sept 21 – 26. Secretary Lopez, Philippine Franchise Association (PFA) president Richard Sanz, and PFA Director Chris Lim pitched franchising as a viable business model during the Kapihan sa Pasuguan in London last September 22. The event was organized by DTI and the Department of Foreign Affairs Philippine Embassy headed by Ambassador to the United Kingdom Antonio Lagdameo.