Philippine SME Participation in ASEAN and East Asian Regional Economic Integration.

This study aims to examine the extent and nature of Philippine SME participation in ASEAN economic integration. Based on a survey of 205 establishments, the results indicate that out of 205 firms, 41 percent are FTA users, of which 48 (or 40 percent) are SMEs while 33 (44 percent) are large enterprises. The survey shows that although most firms are aware of the AEC (ASEAN Economic Community), they still have limited knowledge about the more specific impact of AEC on their business operations. About 62 percent of SMEs are unaware of how the AEC would affect their business operations. Regarding the perceived effects of FTAs on SMEs, 53 percent of the respondents indicated that they do not know, have no opinion or have no response. The major reason cited by firms for not using FTAs is they do not know how to use them. The regression analysis on the determinants of FTA use shows that the coefficients on firm size, age, exporting, foreign ownership, engaging in innovation, membership in industry association, and awareness of the AEC are all positive and significant. In terms of government support and assistance, the survey results indicate that only a small proportion of the respondent firms are being reached by existing government programmes. The results reaffirm the need for more substantial awareness programmes especially on how to use FTAs and how firms can take advantage of the opportunities arising from AEC integration and other FTAs. [ABSTRACT FROM AUTHOR]