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Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ? www.pids.gov.ph 1 Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas Marife Ballesteros and Sonny Domingo Research Fellows

Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ? 1

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Page 1: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

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Building Philippine SMEs Resilience to Natural Disaster

Why do we care ?What is SME resilience ?What it means for Philippine SMEs ?

www.pids.gov.ph

Philippine Institute for Development StudiesSurian sa mga Pag-aaral Pangkaunlaran ng Pilipinas

Marife Ballesteros and Sonny DomingoResearch Fellows

Page 2: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Resilience

is “the ability to resist, absorb, and recover from the effects of a hazard in a timely and efficient manner”

UN International Strategy for Disaster Reduction

Page 3: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Why SME Resilience to Natural Disaster Matters APEC member countries collectively are prone to intense natural

disasters Disasters are bad for business; SMEs are mainly affected with high

probability of failures SMEs are the engines of growth and employment in many parts of

Asia

SMEs failures can disrupt the entire supply chain. SME resilience means a resilient supply chain

Page 4: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

*Raw Material *Parts *Manufacture *Dealer *Market

*Consumer*Customer

SUPPLY CHAIN

OrganizationOrganization Organization

OrganizationOrg Org

Org OrgOrg Org

Org

Org

*Railroad *Shipping *Truck

Communication infrastructure/Information technology

Page 5: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Elements of Supply Chain Resilience

• The effort of one individual/organization is not enough. Relationship and cooperation became important strategies for the organization for survival

• Building climate proof infrastructure• Continuous availability of IT systems and data• Foster both planned and adaptive resilience capabilities • “People” side of business is important. Resilient supply chain

begins with resilient citizens and employees

Page 6: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Developments in Philippine DRRMWell developed policy framework and action plans for DRRM

₋ Philippine DRRM Act of 2010 ; National NRRDM Plan₋ Climate Change Act of 2009 ; National CC Action Plan₋ People’s Survival Fund of 2011

Provision of Policy Framework for SME promotion and development

₋ Magna carta for SME₋ Barangay Micro Business Enterprises Act₋ MSME Development Action Plan (2011-2016)

Page 7: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Developments in Philippine DRRM …….. (2) Area BCM (on pilot stage in CALA and Metro Manila area)

₋ Framework for the direction of action of an industrial agglomerated area

₋ By the Local authority / central government authority/ management organization of Industrial Estates

Albay Public Safety and emergency Management Office (APSECO)₋ local initiative of Area BCP₋ Cover households and local businesses₋ Encourage local businesses to develop contingency/continuity plan₋ Applies vulnerability and hazard maps to land use zoning

Page 8: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Developments in the Philippine DRRM…..(3)Project Noah

₋ public private sector partnership targeted to flood prone areas₋ Corporate Network for Disaster Risk (CNDR) as government

partner₋ Capacity building of local government and community and

development of barangay level DRM Action Plan₋ Have been operationalized in 8 barangays, 3 cities, 1 province

Page 9: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Gaps in DRRM for Philippine SMEs Lack of translation of national policy into local and sectoral plans

₋ MSMED not referenced to DRRM The DRRM plans operationalized primarily for search, rescue, evacuation , relief

operations ₋ Restoration of economic activities handled only in the medium to long term as part of

the rehabilitation efforts Absence of strategic programs to operationalize action plans for SMEs

₋ No small business development centers to address disruption and needs ₋ Absence or insufficient recovery funds for farm based and urban based small industries

(loan and grant)₋ Protection of workers

Area BCM limited to pilot areas and to few committed LGUs Need to develop/improve effective partnerships with key stakeholders for DRRM

Page 10: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Recommendations Build key transport hubs that take into consideration extreme weather

events Developed strategic communications systems Setting up of pre disaster agreements • Dysfunction of public sector is expected• effective networks or partnerships between national and local; public

and private• Adopt flexible regulations (e.g. labor, import/exports)

Support development of financial security instruments at the national level (e.g. catastrophic insurance) and organization level (e.g. micro insurance, business disaster fund)

Page 11: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Recommendations …….. (2) Help build organization resilience •Revised Magna Carta for SMEs and BMBEs and MSME Development Plan to incorporate DRRM for SME •Scale up Area BCPs and practice disaster adaptability among SMEs

Incorporate in labor policies executive management commitment to employees welfare in the event of disasters

•A concern of both business and government

Page 12: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

Recommendations …….. (3) Regional cooperation for supply chain resilience• Continue to build partnerships with other multinational

organizations inside and outside the APEC region₋ Information sharing₋ Promote regional resiliency assessment programs ₋ Application of local and international learnings

• Undertake dialogues, capacity building activities and cross collaboration in resource and technology sharing e.g. hazard mapping, IT infrastructure

Page 13: Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ?  1

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Philippine Institute for Development Studies

Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas

Service through policy research

WEBSITE: www.pids.gov.ph

FACEBOOK: facebook.com/PIDS.PH

TWITTER: twitter.com/PIDS_PH

EMAIL: [email protected]

[ Thank you ]