If there is anything the Occupy Wall Street movement last September 17 taught us, it is that the corrosive power of major banks and multinational corporations (read: the wealthiest 1 percent of America) over the democratic process has caused the greatest recession the world has experienced in generations.

The movement, which uses the slogan, “We are the 99,” highlights the men and women that represent the country’s multitude of small businesses. “The General Motors and the GEs may be very big in value to GDP (gross domestic product) but in terms of enterprises, they constitute less than one percent,” says Dr. Bernardo M. Villegas Ph.D., SVP of the University of Asia and the Pacific, at the recent launch of Western Union Business Solutions for small and medium enterprises (SMEs).

“What is meaningful here,” Villegas says, “is that these small businesses are telling these big guys that ‘we are the 99, and you are only 1.’ And you can say exactly the same thing here in the Philippines. The San Miguels, the Ayalas, the SMs—while they definitely represent an important value in our GDP, in terms of number they only constitute less than one percent. It’s the small and medium enterprises that make up more than 99 percent of all businesses in the Philippines.”


In his keynote address, Villegas further asserts that it is the SMEs that serve as the foundation of any economy, whether developed or developing. “In Japan, for example,” he says, “it’s not the Mitsubishis and Toyotas that are the foundation of the Japanese economy. It’s the thousands of small suppliers that precisely make these large corporations productive. Without these suppliers, the large corporations would not be able to contribute to the value of the economy.”

Villegas’ vision for the Philippines is the same. “It isn’t a reality yet because in the Philippines, small businesses are handicapped,” Villegas says. “It’s very difficult for them to borrow money, to get serviced financially; and what’s worse,” he says, “is that it’s the SMEs in the countryside who are even more handicapped. SMEs are the backbone of our economy. They provide two-thirds of all jobs in the country. They provide the fabric of all communities, yet the odds are often stacked against them.”

It is exactly this dilemma that Western Union seeks to address when it diversified into business-to-business payments in the Philippines. On top of enabling individual consumers to enjoy the company’s fast, reliable and convenient money transfer services, Western Union Business Solutions now provides cross-border and foreign exchange solutions for SMEs in the Philippines, enabling them to efficiently pay for imported goods and services in more than 140 currencies, to over 200 countries and territories 24/7.

“The Philippines is the biggest remittance market in my portfolio and therefore the most important,” says Patricia Riingen, SVP Western Union – Pacific and Indochina. “In the past 20 years, we’ve launched many innovations here in the Philippines and the introduction of businesses as customers for the first time is yet another significant milestone,” she adds.

Potential to go international

With Western Union Business Solutions, local businesses can make faster payments, reducing inventory costs and increasing its ability to respond to market changes through faster delivery of products. “The way international commerce is done by small businesses here in the Philippines will be changed,” Riingen supplies.

Petnet, Inc., a company that already offers Western Union international and domestic consumer money transfer services, is the first Western Union agent globally to offer Western Union Business Solutions. “We’ve been offering Western Union transfers for consumers since 1998 and we started out as a small business, too,” shares Lorenzo Ocampo, president and CEO of Petnet. “Cashflow and responding quickly to market needs have always been critical for SMEs’ success, which is testimony to our growth,” he adds.

Ocampo asserts that the speed of Western Union’s service, compoun-ded by its global reach, implies a new meaning for SMEs in the country to support their growth locally.

Villegas agrees and further adds that this is also an invitation to emerging Filipino SMEs to already think of how they can go regional. “Don’t think of the Philippines as your only market because by 2015, the ASEAN will be a completely free market. Anything you can do in the Philippines,” Villegas says, “you can replicate in Vietnam, Cambodia, Indonesia, etc.

Your market is the whole AFTA, the ASEAN Free Trade Area. Right now, the Philippines is very far from the per capita income of Singapore, Malaysia, Thailand and Indonesia—we are second to the last. If we don’t take advantage of these opportunities, especially now that we have a new government, Vietnam will bury us soon.”

One ammunition the Philippines has under its belt is the fact that it isn’t as export-dependent as other ASEAN countries. “We have a 25 to 34 percent export rate, and if you take a look at how Singapore depends on export at 211 percent, that’s very low,” says Villegas.

“Countries that are overly export-dependent are going to be in trouble in the next five years as traditional markets are slowing down,” he says, adding as a last piece of advice to the SMEs present at the launch to “find your way into these sunrise industries—agribusiness, mining, telecommunications, auto-mobile, consumer durables, IT-enabled services, BPOs, healthcare, medical tourism, construction and real estate, and the four Fs (food, fashion, furniture and fun)—because these are the industries that will grow at 12 to 15 percent a year.”

SMEs interested in using Western Union Business Solutions may register with Petnet by calling (2) 817-8868.



This article was published in the December 12, 2011 issue of the Manila Bulletin