As of yesterday, the BFAR has not gotten the EU’s green light on a standard certification form that will be used by the fishing fleets, the processors and the exporters.

Early this week, Indonesia has notified the EU it is not prepared to meet the January 1, 2010 deadline. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Use ICT in managing risk in lending to SME sector, banks told

An international small and medium-sized enterprises (SMEs) policy expert is urging banks to utilize information communications technology (ICT) as a means to effectively manage their risk in lending to SMEs.

This advice was given by Dr. Chris Hall, chief executive officer of Comnami and Pacific Economic Cooperation Council SME Network Leader, in a videoconference during an SME financing workshop organized by the Asian Institute and Management.

Hall said he sees more people starting an SME as an option for work to survive the global economic downturn, and not because of choice of opportunity.

These “necessity” entrepreneurs, he said, are less likely to have appropriate management skills and attitude to help them succeed in their ventures.

Hill noted they would thus find it hard getting finance especially from risk-averse lenders who might actually have the funds but are not as effective at mobilizing them.

He believed that increasing intangible assets of small and start up firms make SME lending unattractive to banks.

“Real growth of bank lending to SMEs has been negative, falling in many economies… but real growth bank lending to large firms has been positive, growing,” he noted.

With this, growth-oriented firms may not be able to avail of entrepreneurial opportunities arising from restructuring and bankruptcies because of lack of financing.

“This leads to a slower economic and social recovery than is potentially possible, or it shifts the recovery to locations with more conducive entrepreneurial environments,” he pointed out. “Micro lending and start up finance is a tiny proportion but important to growth and economic resilience.”

To increase bank loans for the SME sector, Hill pushed for an alternative ICT model which could encourage banks to extend financing even to SME customers that are deemed high credit risk.

Under this model, he said banks will provide their SME clients a diagnostic assessment which will determine the gaps in their management skills.

They require as a condition of the loan that the SME applicant undertake a specific training and maintain up-to-date information on unique website, he added.

“Banks provide funds conditional on SME with knowledge and education services using mobile technology to stay competitive,” he explained. “SMEs provide banks, via cellphone or computer, with information on a regular basis, is matched against data base, and advised on an exception process.”

Hill said the proposed ICT model could greatly benefit banks in administering the risk in lending to SME clients. It will also provide the sector of bank on-line learning platform.

However, this model requires a consortium approach to achieve. Banks, ICT suppliers, telecommunication companies and government have to work cooperatively, he added. -- Danielle Venz, PHILEXPORT News and Features <--back

3. BPO firms, property developers addressing office space demand

Industry players in the business process outsourcing (BPO) will work with property developers to address the sector’s demand for office spaces, a move seen to be crucial to lower rentals.

Oscar Sañez, Philippine Exporters Confederation, Inc. (PHILEXPORT) trustee for the information technology (IT) services sector, said the sector is establishing demand projections quarterly to determine the period when outsourcing firms could face a supply crunch or oversupply.

“In a situation where there is oversupply and not enough demand occurring, we could work with property developers to either defer their projects to the time that you can get optimal price or advance them if they can to meet some anticipated demand short-term,” he said.

Through managing supply and demand in the office property area, Sañez noted “we can properly prepare ourselves and do some corrective actions to meet them.”

He said the industry is keen to decongest Metro Manila, thus is looking at new areas for growth like Clark, Cagayan de Oro, Iloilo, Davao, Bacolod, Cavite and Laguna which are among the identified next wave cities.

“We are starting to build those office sizes in partnership with the property developers and managers and the Commission on Information and Communications Technology who are owners of the government program on the Super Regions Cyber Corridor,” Sañez added.

He said this effort will ease up the crunch in the usual sites and the industry starts seeing a decline in office rentals.

“In fact, we are starting to see that. So we end up in a situation where we only not benefit from the lower office rentals but we actually end up in more ideal office locations because these are more centrally located, better planned with more support facilities available to the workers,” he further said.

Sañez estimated the industry will need 750,000 workers by 2011 from the present around 380,000.

He said they remained optimistic they will hit the $12-billion revenue target by the end of the decade from 2008’s $6.1 billion.

“The only difference is that, we are delaying that (target) by a year. We are now seeing that $12-billion target is still achievable but we will hit it in 2011, and not 2010,” he bared.

Sañez reasoned that the $12-billion revenue goal was set by industry players before the global financial crisis happened.

“And there was a period of time this year starting fourth quarter of last year when there were stopped, delayed or deferred projects. So we have seen a slowdown in the growth,” he recalled.

“But we are still growing. We grew 26 percent last year and we are growing maybe 20 percent this year,” he added, noting the $12-billion target will enable the industry to contribute close to 10 percent to the country’s gross domestic product from only four percent three years ago. -- Danielle Venz, PHILEXPORT News and Features <--back

4. Software that helps firms meet operation requirements developed

An international software development and consulting company has developed in the Philippines a complete business software designed to help companies in various industries meet their operation requirements.

Impart Solutions, Inc. president Greg C. Martin III said his company is offering them the LAMP Enterprise (LAMP), a Software as a Service (SaaS)-driven Enterprise Resource Planning (ERP) solution, “the first of its kind available worldwide”.

With LAMP, clients will have access to financials, manufacturing, supply chain/logistics, sales and services, customer relationship management, human resource and payroll modules, he said.

Martin said the software follows the SaaS model that drives down costs normally assumed by the consumer.

“It’s cheaper to run, easier to use and makes companies more efficient. And it’s available in the internet so you can be anywhere in the planet and use it,” he said.

“With LAMP, your enterprise application is hosted and maintained in a secure data center, eliminating the need to invest in a large amount on personnel, hardware, infrastructure and maintenance of your applications,” he added.

Martin said there is also a team of professionals to handle queries, maintain the system and perform backups. -- Danielle Venz, PHILEXPORT News and Features <--back