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Shared Services Facilities (SSF): Preliminary assessment 1 Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas www.pids.gov.ph PIDS-PASCN Study Team: Dr. Erlinda M. Medalla, Ms. Fatima Del Prado, Ms. Melalyn C. Mantaring and Ms. Aika B. Maddawin

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Shared Services Facilities (SSF): Preliminary assessment

1

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

www.pids.gov.ph

PIDS-PASCN Study Team:Dr. Erlinda M. Medalla, Ms. Fatima Del Prado, Ms. Melalyn C. Mantaring and Ms. Aika B. Maddawin

Outline of Presentation

1. Overview: SME and SME development, and SSF

2. The Shared Services Facility/ies (SSF)◦ Process flow and components

3. Current status of SSF

4. Case study: results and findings/issues

5. Recommendations/Conclusion

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Philippine M/SME Sector (as of 2012): 99.6% of total

establishments; Wholesale & retail: 50%

Hotels & Restaurants: 15%

Employment: 65%Micro: 47% wholesale & retail

SMEs: 22% mfg, 23% wholesale & retail

Value added: 35.7%Micro: 35% wholesale & retail

SMEs: 19% mfg, 20% wholesale & retail

3

Role and Importance of SMEs

Poverty reduction, means to inclusive growth; but more than a poverty reduction tool

Role in creating a stable economy◦ Arising from flexibility and capacity to more easily absorb labor (skilled and unskilled)◦ Improvement in the capabilities and productivity of SMEs can have tremendous effect on the

country’s economic and industrial base

Dynamic source of growth & innovation◦ essential for creating a competitive and efficient market◦ Infusion of new blood

SME development has become an increasingly important development agenda —with globalization, regional integrated economy and production sharing and network

Dual impact on SMEs: (a) risks and challenges; (b) new and better opportunities

Major barriers and constraints

Productivity and Efficiency◦ Access to technology

◦ Lack of skills

Access to Finance◦ Financial literacy

Access to Markets◦ Product development and design

◦ Networking

5

6

7

SMEs

in t

he

Phili

pp

ines

Government Policies & ProgramsAddressing Access to Finance Microfinance Programs

People’s Credit and Finance Corporation (PCFC) Access of Small Entrepreneurs to Sound Lending Opportunities (ASENSO) ProgramRural Micro Enterprise Promotion Programme (RuMEPP)Mandatory Allocation of Credit Resources to MSMSEs (RA 9501)o8% for micro & small enterprises; 2% for medium enterprises

Addressing Access to MarketProduct Development & Design Services—Product designs; Technology upgrading workshops; Design & technical information; Design library; Conduct of design competitionExport Pathways Program-Regional Interactive Platform for Philippine Exports (RIPPLES)National Industry Cluster Capacity Enhancement Project (NICCEP)Manila F.A.M.E; IFEX Philippines; National & Regional Trade Fairs;Seminars; Trade facilitation; Advisory/consultancyOne Town One Product (OTOP) Stores- Tindahang Pinoy; Buyer-Seller Matching; Domestic/Foreign Trade Facilitation;

8

SMEs

in t

he

Phili

pp

ines

Government Policies & Programs

Addressing Productivity and EfficiencyTechnology Upgrading: Department of Science & Technology (DOST)

Small Enterprise Technology Upgrading (SET-UP)

Technology Business Incubator Program

Shared Service Facilities (SSF)

SME Roving Academy

Technology Information for Commercialization (TECHNICOM)

Addressing Overall Business EnvironmentMagna Carta for Micro, Small and Medium Enterprises (RA No. 6977 as amended by RA No. 8289 and RA No. 9501)

Barangay Micro Business Enterprises (BMBEs) Act of 2002 (RA No. 9178)

Go Negosyo Act (RA 10644)

Shared Services Facility/ies

SSF Projects aim to improve the quality and productivity of MSMEs by addressing the gaps and bottlenecks in the value chain of priority industry clusters through the provision of processing machines and equipment for the common use of MSMEs.

SSF Project specifically seeks to:

• enhance the competitiveness of the priority industry clusters through the use of quality and productivity enhancing machinery & equipment

•develop priority and market-driven industries in support of the NICCEP

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The provision of SSF shall:

• enable small businesses and community-based enterprises to increase productivity

• accelerate MSME competitiveness

• encourage the graduation of MSMEs to the next level tapping a better and market share and be integrated in the global supply chain

• take into account convergence where government resources are pooled and integrated

• address the gaps and bottlenecks in the value chain of priority industry clusters

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Shared Service Facilities (1/4): Process flow and components

11

• DTI Provincial Offices (the Proponents):

• Identify & select eligible 'Cooperator'

• Prepare and endorse project/technical proposal with TOR and Manual of Operations to the RTWG based on the ff criteria:

• SSF Projects must address mfg or processing gap; and increase cluster productivity

• Interested Cooperator must:

• provide counterpart support, i.e.facility or working capital

Identification of Eligible Projects

Shared Service Facilities (2/4): Process flow and components

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• The Regional Technical Working Group (for projects costing >PhP 1M) & National Technical Working Group (project costs PhP 1M-PhP 2.5M) evaluate & approve SSF project proposals following criteria

• RWTG/NTWG issues recommendation to DTI-Regional Office to commence the procurement process of approved proposals

• RWTG convey all purchased equipment to the Cooperator thru a 'Deed of Assignment'

Project Evaluation

& Approval

Shared Service Facilities (3/4): Process flow and components

13

• DTI Regional Offices procure all the SSF equipment/machineries in accordance with RA 9184 guidelines;

• Concerned DTI Provincial Director shall supervise the receipt & inspection of purchased equipment

• DTI Provincial Office and/or authorized DTI Representative shall turn over the purchased equipment to the SSF Cooperator

• Signing of Memorandum of Agreement between the DTI Representative and the SSF Cooperator

Procurement & Awarding

Shared Service Facilities (4/4): Process flow and components

14

• DTI Provincial Offices shall:

• monitor & evaluate the progress of SSF in terms of its physical accomplishments and finances

• provide additional expertise or technical support when needed and pull out the equipment if the Cooperator fails to comply with the terms and conditions stipulated in the Manual of Operations

• submit regular accomplishment report to the RO

• DTI Regional Office will oversee SSF implementation; consolidate and evaluate the submitted accomplishment reports

Project Monitoring

Broad Quantitative assessment of SSF

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SSF as a tool for SME development

A. Addressing constraints: Inherent size disadvantage1. With direct negative impact on productivity (Q/K, Q/L)

2. Related to access to technology (and equipment)

3. Related to financial constraint

◦ Highlights the special role of SSF in the DTI SME development strategy

◦ Case studies

16

SSF as a tool for SME development

B. Addressing national objectives: employment generation and inclusion/equity

Intended beneficiaries: lower income group

Benefits from SSF:◦Increased value-added accruing to beneficiaries

Question: Are benefits worth the costs?

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Assessment tools

Overall picture

1. Utilization rate

2. Implicit subsidy to labor

3. Value-added vs. cost of SSF

Case Studies

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SSF: Current status & preliminary figures (1/3)

19

Target Fund Allocation # of SSFs Project Cost # of SSFs Project Cost # of SSFs Project Cost Project Cost # of SSFs Project CostCAR 76 74,472,000.00 51 24,929,949.00 5 11,427,600.00 56 36,357,549.00 38,114,451.00 73.68% 48.82%

Region I 38 42,528,000.00 50 23,227,557.00 - - 50 23,227,557.00 19,300,443.00 131.58% 54.62%

Region II 114 31,442,000.00 111 25,405,953.90 6 6,036,046.10 117 31,442,000.00 - 102.63% 100.00%

Region III 110 115,304,000.00 68 37,679,131.72 5 3,674,405.44 73 41,353,537.16 73,950,462.84 66.36% 35.86%

Region IVA 100 70,548,000.00 86 56,378,879.52 7 3,442,940.00 93 59,821,819.52 10,726,180.48 93.00% 84.80%

Region IVB 15 15,296,000.00 6 3,502,000.00 - - 6 3,502,000.00 11,794,000.00 40.00% 22.89%

Region V 45 49,374,000.00 48 16,740,093.98 8 2,537,707.00 56 19,277,800.98 30,096,199.02 124.44% 39.04%

Region VI 32 19,040,000.00 26 4,953,115.01 - - 26 4,953,115.01 14,086,884.99 81.25% 26.01%

Region VII 41 29,584,000.00 68 15,112,008.30 11 10,283,916.50 79 25,395,924.80 4,188,075.20 192.68% 85.84%

Region VIII 26 26,640,000.00 65 1,334,700.00 6 6,660,000.00 71 7,994,700.00 18,645,300.00 273.08% 30.01%

Region IX 67 27,120,000.00 30 13,891,832.60 13 13,235,428.00 43 27,127,260.60 - 64.18% 100.03%

Region X 77 45,744,000.00 54 21,359,198.44 20 14,951,536.50 74 36,310,734.94 9,433,265.06 96.10% 79.38%

Region XI 31 34,480,000.00 42 12,171,062.48 14 11,828,346.77 56 23,999,409.25 10,480,590.75 180.65% 69.60%

Region XII 40 31,360,000.00 38 17,990,760.00 - - 38 17,990,760.00 13,369,240.00 95.00% 57.37%

Caraga 42 34,448,000.00 23 14,126,787.00 - 1,040,000.00 23 15,166,787.00 19,281,213.00 54.76% 44.03%

NCR 8 52,620,000.00 2 1,461,000.00 - - 2 1,461,000.00 51,159,000.00 25.00% 2.78%

Total 862 700,000,000.00 768 290,264,028.95 95 85,117,926.31 863 375,381,955.26 324,625,305.34 100.12% 53.63%

Total (D=B+C)

Balance for

Continuing

Fund (E=A-D)

% of SSF

Established/Fund

Utilization

Region

2013 GAA (A)

STATUS OF 2013 SSF FUND UTILIZATION

Established (B) Obligated ( C )

• Fund utilization: 53.63%

SSF: Current status & preliminary figures (2/3)

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• Implicit Subsidy per worker: PhP 28 to PhP 1,165 per month per worker (assuming an average eco life of min. 3 yrs)

MSMEs Assisted (5)

Other

beneficiaries (5) Total (6) (7=3/4) (8=7/3) (9=8/12)

CAR 51 24,929,949 806 77 6 83 30,930.46 10,310.15 859 8,400

Region I 50 23,227,557 1,381 1,899 - 1,899 16,819.38 5,606.46 467 7,590

Region II 111 25,405,954 2,013 366 492 858 12,620.94 4,206.98 351 7,650

Region III 68 37,679,132 2,650 348 4,037 4,385 14,218.54 4,739.51 395 10,080

Region IVA 86 56,378,880 4,285 1,572 42,762 44,334 13,157.26 4,385.75 365 10,875

Region IVB 6 3,502,000 1,804 81 1,514 1,595 1,941.24 647.08 54 8,250

Region V 48 16,740,094 399 60 2,473 2,533 41,955.12 13,985.04 1,165 7,800

Region VI 26 4,953,115 3,277 7 45 52 1,511.48 503.83 42 8,610

Region VII 68 15,112,008 3,163 32 342 374 4,777.75 1,592.58 133 10,200

Region VIII 65 1,334,700 1,318 397 - 397 1,012.67 337.56 28 7,800

Region IX 30 13,891,833 455 256 200 456 30,531.50 10,177.17 848 8,400

Region X 54 21,359,198 2,323 1,118 3,574 4,692 9,194.66 3,064.89 255 9,180

Region XI 42 12,171,062 3,061 322 104 426 3,976.17 1,325.39 110 9,360

Region XII 38 17,990,760 876 99 663 762 20,537.40 6,845.80 570 8,100

Caraga 23 14,126,787 429 - 63 63 32,929.57 10,976.52 915 8,040

NCR 2 1,461,000 100 - 2 2 14,610.00 4,870.00 406 13,980

Total 768 290,264,029 28,340 6,634 56,277 62,911 10,242 3,414 285 9,020

Region (1)

SUMMARY OF ESTABLISHED SSF PROJECTS PER REGION

No. of SSF (2) Proj Cost (3)

Bottomlines

No. of Jobs

Generated (4)

Beneficiaries

Monthly

Wage (9)

Implicit subsidy per worker

Total Annual Monthly

SSF: Current status & preliminary figures (3/3)

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• Benefit-cost ratio: 1.5 to 15.9 ; mostly positive except for Region VII

REGION PROVINCE TOWN INDUSTRY CLUSTER PROJECT COST

PROJECT

COST/3

BEFORE SSF

(annualized)

AFTER SSF

(annualized)

(Assumption 1)

Production cost

= 88% of Sales w/o SSF with SSF

(1) (2) (3) (4) (5) (6) (7) (8) (9) (WoSSF = 7-9) (WSSF = 8-9)

TOTAL 24,977,589.76 8,325,863.25 205,977,052.00 282,555,360.00 181,259,805.76 24,717,246.24 101,295,554.24 9.197641814

CAR 4 provinces 11 Processed Food; Organic Fertilizer; Gifts & Decors; Veg. Noodles; Coffee3,005,412.00 1,001,804.00 2,887,512.00 4,410,000.00 2,541,010.56 346,501 1,868,989 1.519746378

Region I 1 province 2 Milkfish; Dairy 1,368,210.00 456,070.00 870,000.00 2,760,000.00 765,600.00 104,400 1,994,400 4.144100686

Region II 5 provinces 42 Processed Food;Dairy; Bamboo; Handicrafts; Meat processing; Furniture/furnishings; Gifts, Decors6,814,790.28 2,271,596.76 147,431,480.00 192,651,000.00 129,739,702.40 17,691,778 62,911,298 19.9064908

Region IVA 4 provinces 6 Coffee; Gifts, Decors; Processed food; Handicrafts1,890,200.00 630,066.67 14,727,440.00 18,037,600.00 12,960,147.20 1,767,293 5,077,453 5.253666279

Region V 2 provinces 4 Abaca; Handicrafts; Coconut/coir 2,547,450.00 849,150.00 3,858,000.00 5,730,000.00 3,395,040.00 462,960 2,334,960 2.204557499

Region VII 2 provinces 4 Meat processing; Processed food; Handicrafts1,103,899.00 367,966.33 10,562,880.00 5,636,040.00 9,295,334.40 1,267,546 -3,659,294 -13.38937711

Region IX 1 province 3 Abaca; Processed food; Gifts, Decors 941,500.00 313,833.33 5,916,000.00 10,716,000.00 5,206,080.00 709,920 5,509,920 15.29474243

Region X 1 province 3 Processed food; Coco coir; Gifts, Decors 619,380.00 206,460.00 1,252,140.00 2,693,280.00 1,101,883.20 150,257 1,591,397 6.980238303

Region XI 4 provinces 7 Organic fertilizer; Coco coir; Cacao 1,854,395.48 618,131.83 4,222,800.00 14,095,440.00 3,716,064.00 506,736 10,379,376 15.97173867

Region XII 5 provinces 11 Handicrafts; Processed food; Ceramics, porcelain; Bamboo;4,832,353.00 1,610,784.33 14,248,800.00 25,826,000.00 12,538,944.00 1,709,856 13,287,056 7.18730606

SALES Pearson's Single Period BC method

BC1=(WSSF-

WoSSF)/(Proj

Cost/3)

Case studies: I. Luzon -- Efficient Production of Banana Chips Processing in the Porac Highlands

• Region/Province: Region IV; Bgy. Villa, Porac, Pampanga

• Industry cluster: Processed Food

• Cooperator/s: LGU of Porac

• Beneficiaries: Agrarian Reform Beneficiaries (ARBs) and upland farmers (IP communities)

II. Visayas -- Facility Support Project on Abaca Fibercraft in Aklan• Region/Province: Region VI; Kalibo Aklan

• Industry Cluster: Loom weaving/bamboo

• Cooperator/s: Handicraft of Aklan Multipurpose Cooperative (HAMPCO)

• Beneficiaries: 5 Cooperatives (4 MSMEs in Kalibo; 2 MSMEs in Makato; 1 MSME in Malinao; 4 MSMEs in Lezo; 2 MSMEs in Balete)

III. Mindanao – (1) Banana Powder Processing Expansion; (2) Acquisition Facilities forCoco-coir & Coco twine processing

• Region/Province: Region XI, Davao City

• Industry cluster/s: Banana (Processed food) and Coco-coir

• Cooperator/s: (1) Progressive Highland Multipurpose Coop; (2) Tungkalan Coco Farmers Cooperative

• Beneficiaries: (1) 840 PHMC members; 100 MSMEs; 300 indirect beneficiaries;

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CASE I-- Luzon: Region IV (Porac, Pampanga)

Project Title Efficient Production of Banana Chips Processing in the Porac Highlands

Industry Cluster Processed Food (PF)Beneficiaries farmer-Agrarian Reform Beneficiaries (ARBs) who are upland banana farmers and

processors (highlands of Barangay Diaz and Villa MariaCooperator(s) LGU of PoracProject Location Brgy. Villa Maria, Porac, Pampanga

Production Capacity before

SSF

60 packs of banana chips per day

Production Capacity after

SSF

500 packs/ day (June 2014); 1000 big pouches, 650 small pouches per day (Aug 2014);

150 canister, 275 big pouches and 280 pouches of cassava chips per day (Oct 2014)

Sales generated before SSF PhP 2,000/daySales generated after SSF PhP 12, 000/day (June 2014); PhP 30,000/day (Aug 2014); PhP 38,875/day (Oct 2014)

Date granted/ implementation April 29, 2014Markets (current:) LGU of Porac, local supermarkets/ pasalubong centers

Target: neighboring municipalities and provinces, supermarkets, groceries and

pasalubong centersEquipment’s/Tools provided Mechanical Slicer, Stainless Steel Deep-Fat Fryer, Digital Heavy Duty Electronic Platform

Scale, Vegetable cutter, electronic table platform scale, cooking vat, working table,

CASE 2

Visayas: Region VI (Kalibo, Aklan)

Project Title Facility Support Project on Abaca Fibercraft in Aklan

Industry Cluster Loom weaving

Beneficiaries 220 beneficiaries who are weavers, warpers, knotters, scrapers from the 5 coop-

members of different municipalities of Aklan:

-Kalibo (4 MSMEs); Makato (2 MSMEs); Lezo (4 MSMEs); Malinao (1

MSME);Balete (2 MSMEs)

Cooperator(s) Handicraft of Aklan Multipurpose Cooperative (HAMPCO)

Project Location Old Buswang, Kalibo Aklan

Production Capacity before SSF

Production Capacity after SSF

Sales generated before SSF

Sales generated after SSF

Date granted/ implementation December 18, 2013

Markets Domestic Buyers – Cebu, Manila, Pampanga, Boracay and Palawan

Foreign Buyers – Japan, US, Europe and Paris, France

Equipment’s/Tools provided 110 units of Handlooms

CASE 3

Mindanao, Region XI (Davao City)

Project Title Banana Powder Processing Expansion Acquisition Facilities for Coco Coir& Coco Twine Processing

Industry Cluster Banana (Feed – Grade Banana Powder) Coconut/ Coco Coir

Beneficiaries 840 members of the Cooperator, 100 MSMEs,

and 300 other beneficiaries

Cooperator(s) Progressive Highland Multi-Purpose Cooperative

(PHMPC)

Tungkalan Coco Farmers Cooperative (TCFC)

Project Location Sitio Baracayo, Dalianon Plantation, Toril District

and Davao City

Tungcalan, Toril, Davao City

Production Capacity before SSF 481, 140 kilograms/year

Production Capacity after SSF 1, 202, 850 kilograms/year ;

1,000 tons per year

Sales generated before SSF

Sales generated after SSF PhP 208,000 – PhP 520,000 / month

Date granted/ implementation January 21, 2014 May 28, 2013

Markets BEX Philippines and Tan Trader

Equipment’s/Tools provided Hammer Mill, Banana Chipping Machine (Plant-

Based), 10 units Banana Chipping Device –

Manual Type, Weighing Scale, Bagger,

1 Diesel Engine - 12 HP Engine, Kubota Brand 8-12 hrs with less

maintenance, 1 Bating& Decorticating Machine (2 in 1 type of

machine or a double purpose machine which saves power

consumption, 1 Coco Twining Machine-ceiling fan-type (the

bigger one) with installed hook at the center

CASE 2-- Visayas: Region VI (Kalibo, Aklan)Project Title Facility Support Project on Abaca Fibercraft in AklanIndustry Cluster Loom weavingBeneficiaries 220 beneficiaries who are weavers, warpers, knotters, scrapers from the 5 coop-members

of different municipalities of Aklan:

-Kalibo (4 MSMEs); Makato (2 MSMEs); Lezo (4 MSMEs); Malinao (1 MSME);Balete (2

MSMEs)Cooperator(s) Handicraft of Aklan Multipurpose Cooperative (HAMPCO)Project Location Old Buswang, Kalibo Aklan

Production Capacity before

SSF

Production Capacity after

SSF

Sales generated before SSF

Sales generated after SSF

Date granted/

implementationDecember 18, 2013

Markets Domestic Buyers – Cebu, Manila, Pampanga, Boracay and Palawan

Foreign Buyers – Japan, US, Europe and Paris, FranceEquipment’s/Tools provided 110 units of Handlooms

Banana and Cassava Chips Processing in Porac, Pampanga

The barangay captain of the Villa Maria, who is an Aeta and also an upland banana farmer, demonstrated the banana and cassava chips processing using the equipment (slicer) from the SSF program with his helpers who are also Aetas.

Banana and Cassava Chips Processing in Porac, Pampanga

The wife of the barangay captain also demonstrated the cassava chips processing. She fried the dried cassava for a minute to turn them into crunchy chips and then strained them immediately. After that, she seasoned the chips with cheese to add flavor and then put them into pack.

Loomweaving (Pag-haboe) in Kalibo, Aklan

The facility support project on Abaca Fibercraft Industry in Aklan has been conceptualized mainly to address the gap in the demand for a 40” wider-width handlooms for abaca and piña fabrics as well as woven products.

The cooperator for this project is the Handicraft of Aklan Multipurpose Cooperative (HAMPCO). HAMPCO covers five weaving centers in different areas in Aklan. They market the products to Manila, Cebu, Palawan, Boracay and Japan.

Weaving (Pag-haboe) in Kalibo, Aklan

The handloom of Aklan usually has two foot-operated treadles made of bamboo, twoharnesses made from the trunk of coconut tressand an extended overhead warp beam. Thewarp is wound around the warping beam ofloom and run through the heddles and batten(or beater) and the fastened to the cloth beam.The harnesses are frames that hold the heddles.

The weaving is usually done with the weaversitting on a bench and working the treadles withthe feet. When the warp opens the shuttlecontaining the bobbin with the fiber for theweft is thrown into the opening with the righthand. It is caught with the left hand.Simultaneously the beater (sueod) is pressedagainst the web or woven cloth. The process isrepeated, this time pressing the other treadlethrowing the shuttle left hand and catching itwith the right then pressing the beater again.

Warp ends are kept equally separated and inorder by reed. The reed is supported by thebeater which also presses each new pick of weftagainst the woven web.

Piña Fiber Product

The piña fibers are scrapped from the leaves of pineapple plant. The scrapping process is very labor intensive. These fibers are then knotted from end to end creating long threads which then weave to cloth. The major end use of Piña fibers are traditional Filipino Barong Tagalog and formal dress.

Focus Group Discussion in Davao City

The participants of the FGD conducted in Davao were the members of the Progressive Highland Multipurpose Cooperative (PHMPC) and Tungkalan Coco Farmers Cooperative (TCFC). Their products are banana powder for PHMPC and coco coir/twines for TCFC.

Banana Powder Processing in Toril, Davao City

The banana powder processing project in Toril, Davao City is feed grade banana made from the rejected banana Cavendish produced in their area.

The chipped bananas are sun-dried and then converted into powder using the chipping machine from the SSF program.

These feed-grade banana powder will be mixed with hog and poultry feeds such as BMEG.

Coco coir and Coco twine processing

The coir is extracted from the coconut husks that are usually thrown away. The coconut husks will be placed in the decorticating machine to produce coco fiber. The decorticated fiber is then twined into ropes.

Geonets – Product of Coco coir

These geonets are used to prevent erosions. It is usually installed in landslide-prone slopes along national highway.

Case study: results & findings

1. Information dissemination & identification of eligible projects No formal or systematic approach to disseminate info on SSF –

need to be well-targeted due to time and resource constraints; only those with equity, ready markets and SMEs with great potential are given support;

Rules-driven: most projects have indl costs of less than PhP1M or within the control or discretion of regional / provincial offices – to facilitate the approval and procurement of requested facilities We could be missing out on the more substantive and meaningful aspects of ‘value-

addition’

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Case study: results & findings2. Information dissemination & identification of eligible projects No formal or systematic approach to disseminate info on SSF – need

to be well-targeted due to time Proposal review and evaluation Minor adjustments observed: composition & members of Regional

Technical Wkg Group Most frequently cited problems: technical specification and

configuration of requested machineries

3. Procurement and implementation Long, complicated procurement process and requirements: Tax

clearance Lack of qualified and eligible suppliers

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Preliminary recommendations

1. Information dissemination, identification & selection of projects Make selection process more transparent, despite the sound

judgment shown by DTI personnel

Increase the threshold of individual project costs under the control of the Regional offices

2. Proposal evaluation and approval Decentralize the issuance and release of tax clearance to local

BIR offices

Develop a database of suppliers with technical information of all fabricated equipment and machineries

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Preliminary recommendations

3. Varying performance of SSF projects Some SSF Projects are more successful than others: need to

examine the factors contributing to the performance of SSF projects once reliable data becomes available

4. Other SME-oriented government programs and projects Better convergence and harmonization of all SME-oriented

programs and activities

SSF should be integrated with other govt plans: Industrial Roadmap, Regional Devt Plans; CCT

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Conclusion

Early indications suggest bright prospects and promising potentials.

The project as it is, costs very little and the impact on jobs, production capacities as well as the encouraging feedback from all concerned make for a valid argument that the project might be worth pursuing/continuing until such time that some credible measure of cost-effectiveness can be established. Additionally, the cost-effectiveness of the program would be all the more evident if recommendations to facilitate and speed-up the process are also heeded.

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

Service through policy research

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