Inclusive procurement for women empowerment

The struggles faced by micro, small and medium enterprises (MSMEs) to bid and participate in government procurement opportunities are quite different from large enterprises, and the struggle is even more apparent for women micro, small and medium enterprises (WMSMEs).

Recent studies show the potential of MSMEs to transform our economy and promote social equity, especially when women entrepreneurs are able to participate.

This was the topic of a recent talk during the 2024 Procurement Summit on Oct. 21, organized by the Government Procurement Policy Board -Technical Support Office, with the theme “Leveraging Local MSMEs for Inclusive and Sustainable Procurement”.

Current state of WMSMEs

The impact of women entrepreneurs in the economy cannot be denied as they drive economic growth and contribute to achieving different sustainable development goals. Based on the 2018 data of Statista, a global data and business intelligence platform, on the leading industries in the MSME sector, around 88 percent of entrepreneurs in the Philippines engaged in retail or wholesale were women; and at least 40 percent were engaged in arts and culture, materials or manufacturing, food processing and agriculture. The government has the capacity to leverage its significant market reach to influence and shape how businesses create and process products and services to the public. It can, in turn, influence public demand and create opportunities for women, including consumer awareness, to achieve sustainable and inclusive procurement practices. This also means that our country can employ equitable and inclusive procurement policies to promote significant socioeconomic change for women and their businesses.

Recommendations for the private and public sectors

By including WMSMEs in government procurement, the government is assured that economic benefits are widely and justly distributed because research shows that women often invest a high proportion of their income to their family and community compared with their male counterparts, which leads to transformative improvement of the family’s well-being and enhancement of community development.

For the private sector

1. Set targets/goals on the percentage of total purchases to be sourced from WMSMEs. By actively seeking out and engaging with women entrepreneurs, companies will diversify their supply chains and will help break some deeply systemic barriers that hinder women from participating in procurement.

2. Establish partnerships with organizations that support women entrepreneurs to identify suppliers and for ease of connections with WMSMEs.

3. Integrate gender-responsive criteria in supplier selection and accreditation. When evaluating potential suppliers, companies can include criteria that assess the supplier’s commitment to gender-responsive policies to promote gender diversity in the workforce and any other initiatives that will promote women empowerment within their business. Integrating this criteria into the supplier selection process not only encourages suppliers to adopt more inclusive practices but also helps provide a competitive advantage to those who prioritize gender responsiveness.

4. Adopt inclusive and gender-responsive procurement policies. Implementing supplier diversity is an effective strategy that explicitly seeks inclusion of women-owned and women-led businesses in the supply chain. Through this approach, we can strategically promote gender equality within the business by supporting potential women suppliers.

For the public sector

1. Strictly implement the provisions of Republic Act No. 9501, or the Magna Carta for MSMEs, which mandates government agencies to allocate 20 percent of all their procurement opportunities for goods and services to MSMEs. Though no specific targets have been set for WMSMEs that comprise about 56 percent of MSMEs, they will nonetheless benefit. Preferably, a specific target is set for WMSMEs.

2. Incorporate gender-responsive criteria in bidding evaluation. As many WMSMEs are often small, they face challenges in competing with large companies for government contracts. To enable WMSMEs to participate, among the criteria that could be incorporated in the evaluation of bids from larger companies should be a commitment to source a percentage of their own purchases from WMSMEs, and the presence of policies that promote gender equality in their organizations. This approach could help level the playing field for smaller businesses and is aligned with the Magna Carta, enabling government spending to contribute to the economic empowerment of women. To further encourage WMSMEs to participate in public procurement, the government can provide support and resources to organize all women consortia, where WMSMEs can pool their resources and share their expertise.

3. Utilize the gender and development (GAD) budget of all government agencies and instrumentalities for procurement from WMSMEs. Based on the approved national budget of P5.768 trillion, even if only 1 percent of the 5-percent GAD budget of approximately P57.68 billion is used for purchases from WMSMEs, can you imagine the impact that this will create to the woman, her family and her community?

4. Link government incentives to gender-responsive procurement practices. Government agencies, such as the Department of Trade and Industry, which is responsible for MSME development, could include in their evaluation criteria for the grant of incentives a commitment to source from WMSMEs or to implement gender diversity initiatives. Government can thus encourage businesses to give priority to gender equality in their operations, amplifying the impact of government mechanisms.

‘When she bids, we benefit’

Taking a collective action to build a more equitable, inclusive society can transform our economy where women have equal opportunities to reach their full potential. The private and public sectors must work together to empower women so we can achieve inclusive procurement practices.

When she bids, we benefit; ensuring participation of WMSMEs in procurement is not just a matter of economic necessity­—it is a moral imperative. Gender-responsive procurement will not only benefit WMSMEs but also contribute to a more diverse and resilient economy, leading to greater social and economic prosperity for all.

Source: Inquirer

PHL’s economic freedom improves

The Philippines’ ranking jumped nine spots in a global index on economic freedom due to higher scores in trade freedom and property rights, according to the Canada-based think tank Fraser Institute.

The country placed 59th out of 165 economies in the conservative think tank’s Economic Freedom of the World index which uses 2022 data. Its ranking improved from 68th place in the previous index which used 2021 data.

This was the Philippines’ highest placement since it ranked 57th in 2016.

The country received a score of 7.01 out of 10, a tad higher than the revised 6.93 in 2021. Its latest score was higher than the global average of 6.56.

Among Asia-Pacific jurisdictions, the Philippines lagged behind Hong Kong (8.58), Singapore (8.55), New Zealand (8.39), Australia (7.98), Japan (7.90), Taiwan (7.71), Malaysia (7.56), and South Korea (7.52).

However, the Philippines was ahead of Brunei Darussalam (6.99), Indonesia (6.96), Thailand (6.94), Mongolia (6.86), Cambodia (6.85), Vietnam (6.23), China (6.14), Papua New Guinea (6.02), Fiji (5.99), Laos (5.86), Timor-Leste (5.77), and Myanmar (4.54).

The Philippines had its highest score in the sound money category with 9.04, ranking 11th out of the 164 other countries. But it was down from 9.51 in 2021.

The country — yet again — performed worst in legal system and property rights with a score of 4.51, slightly higher than 2021’s 4.49.

The Philippine score in size of government declined to 7.83 from 7.91 in 2021. Among subcategories, it scored 8.83 in government investment and 6.91 in government consumption.

“The lesson from this is clear: a small fiscal size of government is insufficient to ensure prosperity,” Fraser Institute said. “The other areas of economic freedom — the rule of law and property rights, sound money, trade openness, and limited regulations — are also required.”

Manila’s score in the freedom to trade internationally category rose to 7.14 from 6.53 in 2021.

Its score in regulation slipped to 6.51 from 6.62 in 2021. Among sub-categories, the Philippines had its lowest score at 4.59 in business regulation and the highest score at 8.27 in credit market.

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said fiscal consolidation remains a key problem for the government’s economic policy.

It leads to “too much intervention in the markets,” he said in a Facebook Messenger chat.

Finance Secretary Ralph G. Recto in September said the Marcos government was on track with its medium-term fiscal consolidation program even as its debt remained at a record high due to pandemic-related loans.

“There is limited participation from the private sector as much of the economic growth is due to government spending,” Mr. Lanzona said. “Instead of the government spending directly, they should create the environment that allows greater public sector participation.”

Hong Kong topped the economic freedom index, followed by Singapore, Switzerland, New Zealand, the United States, Denmark, Ireland, Canada, Australia, and Luxembourg.

At the bottom of the list was Venezuela, followed by Zimbabwe, Sudan, Syria, Algeria, Myanmar, Argentina, Iran, Libya and Yemen.

The think tank said Ukraine (-0.94) and Moldova (-0.63) — the two nations that have either been invaded (Ukraine) or threatened militarily — saw the largest declines in ratings between 2021 and 2022.

The rating for Russia was also down (-0.30). “It may be obvious to point out, but war is very bad for economic freedom,” the think tank said.

Another important development in the index was the declining condition of Hong Kong, whose rating fell “precipitously” to 8.58 in 2022 from 9.05 in 2018.

“This is nearly half a standard deviation decline in just four years,” it said. “Thus, we continue to sound the alarm bell about signs of declining economic — and other — freedoms in Hong Kong.”

Sonny A. Africa, executive director of IBON Foundation, said the conservative index’s metrics “come from a narrow prioritization” of market freedoms and property rights, which “don’t align with a broader and more inclusive understanding of economic well-being and development.”

“This is why the so-called economic freedom scores are so inconsistent with the economic realities faced by the majority of Filipinos who remain poor and marginalized,” he said via Messenger chat.

Mr. Africa said the government’s fiscal consolidation was “evident in the distribution of the country’s declining score in size of government.”

“The relatively high score in government investment reflects the persistent emphasis on corporate-friendly infrastructure and pork barrel hard projects, while the lower government consumption reflects insufficient social services and safety nets,” he said.

“The increase in the score in the freedom to trade internationally category merely reflects continued liberalization that has worked so much against domestic agricultural and industrial development for decades,” he added.

Mr. Africa said the country’s nine-notch improvement in the index was “inconsistent” with important social indicators on a trajectory of decline.

The number of self-rated poor Filipino families has increased to 16.3 million or 59% of total families in September, while the number of households without savings rose to 19.2 million or 71% of total households in the third quarter, Mr. Africa explained, citing data from the Social Weather Stations and the central bank.

While the Philippines was ahead of Indonesia, Thailand, Vietnam, Laos, and Myanmar in the index, it has “much worse food insecurity than all these,” he said.

Mr. Africa cited a United Nations Food and Agriculture Organization report indicating that the Philippines has 44.1% of its total population suffering moderate or severe food insecurity, “which is more than the food insecurity of Indonesia (4.9%), Thailand (7.2%), Vietnam (10.8%), Laos (36.3%), and Myanmar (32%).”

“The Fraser Institute’s index focuses narrowly on market-oriented indicators such as trade freedom, property rights, and business regulation which are presumed to improve the economy,” Mr. Africa said. “In practice, these measures favor a deregulated economy that benefits large corporations and wealthy individuals at the expense of broader social development outcomes.”

In the report, the Fraser Institute noted that high-income industrial economies generally rank quite high for legal system and property rights, sound money, and freedom to trade internationally.

Their ratings were lower, however, for the size of government and regulation.

Source: Business World

The Philippines' business environment needs improvements

The Philippines' business improvement has scope for improvements based on the results of the World Bank's inaugural Business Ready (B-Ready) report.

The country's scores across the three pillars and 10 topics covered by the report ranged as high as the first, or top, quintile and as low as the fifth.

Overall, the B-Ready report assesses a country's "business environment by focusing on the regulatory framework and the provision of related public services directed at firms and markets, as well as the efficiency with which firms can comply with regulations and access public services," the World Bank said.

The 10 topics, meanwhile, "correspond to various stages of the life cycle of a firm and its participation in the market while opening, operating (or expanding) and closing (or reorganizing) a business."

Economies in the top quintile "demonstrate the highest performance," the World Bank said, while those in the second "have above-average scores ... but also show potential for improvements."

Third quintile members, meanwhile, "exhibit a mix of strengths and weaknesses," those in the fourth "grapple with a challenging business environment," and the bottom quintile comprise economies that "face significant challenges."

The Anti-Red Tape Authority (ARTA) said it welcomed the Philippines' "inclusion in the top 40 percent." The report, however, did not present an overall ranking of the 50 economies studied.

The World Bank instead divided countries into five equal groupings, or quintiles, based on their scores in terms of the three pillars and topics.

The Philippines posted its highest score of 70.68, in a scale of zero to 100, in the regulatory framework pillar, enough to put it in the second quintile or 16th out of the 50 economies.

It was in the middle of the pack, or the third quintile, in the public services pillar with a score of 50.80 for 24th.

The country was 36th in terms of operational efficiency, scoring 57.95, which placed it in the fourth quintile.

"Economies of varying income levels can adopt strong regulatory frameworks," the World Bank said, noting that while high-income countries dominated this pillar (Hungary was 1st), it also included a lower-middle-income economy such as the Philippines.

As for public services, "high-income economies tend to provide higher quality public services to support businesses, but all income levels are represented across top quintiles," it added.

Estonia topped this category.

With regard to the third pillar, where Singapore came first, "economies across all income levels can facilitate operational efficiency for firms."

By topic, meanwhile, the Philippines was in the first quintile (6th) in terms of labor, in the second with regard to international trade (17th); and in the bottom fifth in terms of business entry (42nd).

It was in the third quintile for the remaining seven topics: business location (30th), utility services (23rd), financial services (29th), taxation (22nd), dispute resolution (21st), market competition (28th) and business insolvency (29th).

The ARTA said that the Philippines' 16th place in the regulatory framework pillar underscored progress in improving the country's business environment.

This, it added, showed the government's success in "establishing clear and effective rules and regulations that support business operations from startup to closure."

As for the public services and operational showings, the ARTA said that it acknowledged the "need for further improvement."

With regard to the topic results, it said that the Philippines posted a "strong performance" in the areas of labor, international trade and utility services.

"It highlights significant advancements made in improving labor conditions, digitalizing trade processes and providing transparent utility services, it added.

The key areas for improvement, meanwhile, were said to be business entry, business location, market competition and business insolvency.

"ARTA is confident that the country's ranking will continue to improve with the full implementation of the government's efforts that are designed to enhance the delivery of government services," the Office of the President-attached agency said.

"We recognize the need for a whole-of-nation approach that underscores the significance of coordinated and harmonized alignment of relevant service delivery from the government to the stakeholders."

The B-Ready report, it also said, "may not yet fully capture the impact of the government's recent initiatives, [but] we are optimistic about the continued improvements in the country's business environment moving forward."

The World Bank said that the B-Ready report was still being refined in terms of process and methodology. Next year will see coverage expand to 112 economies, while the 2026 list will grow to 184.

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Source: Manila Times