Bill gives MSME more supply chain access

A BILL establishing a supply chain program to expand Philippine enterprise participation and help them scale the value chain was filed at the House of Representatives last month.

House Bill No. 6599 aims to support the growth of micro, small, and medium enterprises (MSMEs) by helping them scale the value chain through incentives offered to larger firms that integrate MSMEs into their supply chains.

“This program seeks to increase the number of MSMEs who can serve as suppliers to firms in priority industrial clusters,” Parañaque Rep. Brian Raymund S. Yamsuan, who authored the measure, said in the bill’s explanatory note.

He said the measure seeks to give MSMEs the chance to join the supply chains of larger domestic and international firms as smaller businesses have long struggled with access to markets, leaving them confined to low-value segments and short-term contracts that hinder growth.

A 2025 Bangko Sentral ng Pilipinas (BSP) survey showed that smaller businesses grappled with access to financing, ability to compete with other firms and labor retention.

The bill seeks to create a government fund to provide financing for MSMEs to help them scale, including grants to cover up to half the cost of acquiring new machinery, technology and personnel training to meet supply chain needs.

MSMEs must be tapped by larger businesses to qualify for the grants, which could also see big firms provide their own resources to help modernize the operations of smaller businesses.

“The endorsing ‘anchor firm’ shall contribute at least 25% of the total project cost, which may be in the form of cash or in-kind contributions such as technical supervision, training, equipment loans, or technology licensing,” the measure said.

The proposal seeks to incentivize large firms to integrate MSMEs into their supply chains and support technology transfer and skills development, offering a tax deduction equal to 150% of training and technology transfer costs for companies that have onboarded smaller businesses for at least two years.

The Trade department is mandated to develop a “digital matchmaking platform” that will allow large firms to identify small businesses capable of meeting their supply chain needs.

MSMEs account for 99.6% of all business establishments and generate 67% of the country’s total employment, BSP data showed. — Kenneth Christiane L. Basilio