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Productivity and Market Access: Why SMEs Struggle to Scale

Small and medium-sized enterprises make up 99% of registered businesses in the Philippines and employ over 60% of workers. Yet their productivity remains low, and most never break into export markets or supply chains.


The World Bank (2025) calls this the “productivity trap.” SMEs generate less value than counterparts abroad and remain excluded from global opportunities. Meanwhile, BusinessWorld (2025) identified a staggering $206 billion funding gap that prevents SMEs from modernizing and expanding.




The Everyday Roadblocks


  1. Complex regulations. Permits and certifications drain time and money.

  2. Costly certifications. Export markets demand testing and standards SMEs can’t afford.

  3. Financing limits. Without collateral or records, SMEs can’t access loans (BusinessWorld, 2025).

  4. Low productivity systems. Manual processes limit capacity and quality.

  5. Market barriers. Without associations or linkages, SMEs miss opportunities (Francisco & Canare, 2017).




The Missed Opportunity


Breaking out of this trap allows SMEs to:


  • Enter export markets with higher margins.

  • Partner with multinationals that demand compliance.

  • Attract investors seeking credible, scalable enterprises.

  • Create better jobs and retain talent.




The Way Forward


  1. Simplify compliance. Keep permits and records organized.

  2. Build smarter systems. Small process improvements can cut waste and boost capacity.

  3. Join networks. Association membership statistically increases geographic reach, partnerships, and export propensity (Francisco & Canare, 2017).




Where Ampersand Fits In


  • Purpose & Impact: Compliance navigator tools for certifications and permits.

  • Brand & Creative: Investor- and buyer-ready storytelling.

  • Culture & Capability: Training leaders to meet higher productivity standards.

  • Commons & Campaigns: Coalitions to share certification costs and advocate for reforms.




The Big Picture


The productivity trap isn’t inevitable. With better systems, financing, and networks, SMEs can scale, join value chains, and unlock growth.




References

  • World Bank (2025). Boosting Private Sector Growth and Job Creation in the Philippines.

  • BusinessWorld (2025). Funding Gap for Philippine SMEs.

  • Francisco, J.P. & Canare, T. (2017). The Challenges to SME Market Access in the Philippines and the Role of Business Associations. AIM Policy Center.

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