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Cagayan de Oro, Northern Mindanao—The Philippine Board of Investments (BOI) through its Domestic Investments Promotion Service - Cagayan De Oro Extension Office, in partnership with the Department of Trade & Industry (DTI)-Northern Mindanao Regional Office, recently conducted a Procurement Matching Activity, successfully linking micro, small, and medium enterprises (MSMEs) as suppliers for the procurement requirements of big businesses in the region.

Part of the annual Northern Mindanao Regional Kahimunan Trade Fair held on August 23, 2018, the activity served as a strategic platform to directly link MSME producers and farmers with institutional buyers. The activity effectively facilitated meetings between 75 MSME suppliers with 10 company buyers and yielded an initial Php4 million in closed deals. More sales and sealed deals are upcoming with supply agreements currently under negotiation.

The Bolo Farm will initially be supplying Anakciano Inc., a poultry backward integrator, 250 metric tons of corn for the feed mill division of the company. RJ Sun Tropical Herbs and Fruits, a processor of fruit concentrates from Southern Bukidnon will be delivering Guyabano puree to VIP hotel. Chefs at Limketkai Luxe Hotel, N Hotel and VIP Hotel will be busy in the months to come for taste tests of new, locally made products. On the other hand, Judicar Cakes, Eat Fat Nai Food Products and Mr. James Lugatog, all MSEs were happy to close deals with YSU Marketing for the supply of their packaging materials at wholesale prices.

The participating MSMEs from the five provinces of the region—Misamis Oriental, Bukidnon, Camiguin, Lanao del Norte, and Misamis Occidental—are local suppliers or producers of processed food, fresh fruits and vegetables, beverages, spices, and condiments. The institutional buyers meanwhile are AnakCiano Inc., Limektkai Luxe Hotel, N Hotel, VIP Hotel, Vjandep Ventures Inc., Bigby’s Corp., Amley Food Corp., Street by Agila Innovations Inc., and YSU Marketing Corp..

BOI Cagayan De Oro Extension Office identified the companies who can be potential institutional buyers. It also coordinated with the DTI Northern Mindanao for the MSME suppliers of the procurement requirements listed by the companies.

Trade Undersecretary for Industry Development and BOI Managing Head Ceferino Rodolfo said the Procurement Matching Activity complements the agency’s initiative to further promote Inclusive Business (IB) which fosters income and business opportunities for the poor or low income earners of society by integrating them into the supply chain of medium or large companies.

“By engaging low-income communities as partners, customers, suppliers or employees in value chains of big businesses, IBs can transform communities into new markets and new sources of entrepreneurial talent. IBs go beyond philanthropy and invest in addressing the problems of the poor because it makes good business sense,” said Undersecretary Rodolfo.

Further to the government’s thrust to alleviate poverty through an inclusive growth approach that pushes for more IB models and social enterprises to sustainably link small community enterprises into the value chain of big businesses, the BOI has taken IB under its wing through the 2017-2019 Investment Priorities Plan (IPP) to encourage more businesses to develop IB models.

Under the General Policies and Specific Guidelines of the 2017-2019 IPP, IB Projects in the agribusiness and tourism sectors may qualify for investment incentives such as pioneer status and eligibility for income tax holiday of five years, subject to the provisions of Executive Order No. 226 or the Omnibus Investments Code.

A qualified agribusiness and tourism project may opt to undertake IB models by submitting a duly notarized IB plan in the required BOI format upon application for registration which includes targets and timetable based on specific qualifications and conditions.

BOI created an IB-Program Management Office (IB-PMO) responsible for evaluating investment projects applying for registration with potential IB models.

Photos show local suppliers presenting their product offerings to institutional buyers during the Procurement Matching Activity. (Left photo courtesy of www.pia.gov.ph).

Ms. Jinky Bolo, a participating farmer supplier from Bukidnon said, “I am very thankful as the event linked us directly with the buyers of our farm produce. Little did I know that the elimination of middlemen could benefit us few hundred thousand more in total in just one cropping. For this, I am grateful for the government interventions”.

Mr. Jerome Del La Fuente, general manager of Limketkai Luxe Corporation, a BOI registered firm and one of the institutional buyers in the activity meanwhile said, “These types of programs should be done regularly so we won’t have difficulty in the sourcing of our hotel needs especially during peak season.” “Hopefully, we can really get more of this [procurement matching] not only in Cagayan de Oro, but also in the major cities—meaning we can go to Davao, we can compete with the Davao growers, we can also sell in Cebu, and eventually conquer Manila,” he added.

“Four food processing companies, three big hotels, a feed mill operator and a packaging distributor, all homegrown businesses, engaged farmers, producers and processors in a day of product presentation and negotiation. They were pleasantly surprised to discover new products, bulk suppliers and professional farmers,” said BOI Cagayan de Oro Extension Office Chief Lourdes Ellen Kionisala.

“On the other hand, MSMEs got firsthand knowledge on specific product requirements and experience on bulk price trading. For most of them, it was exhilarating to talk to more than one company purchaser in a day – something that requires a whole lot of courage and effort specially for those coming from the provinces. An added bonus for MSEs was the presence of an IT startup company who afforded them an avenue to market their products thru a locally designed, user friendly application at very reasonable cost,” she said.

“Lots of learning and yet more work to be done as micro and small enterprises are challenged to follow thru the documented agreements in this initial meeting. DTI-10 Negosyo Center counsellors are prepared to assist their MSMEs reach bigger markets, an effort the BOI is only too willing to support. For after all, everybody wins when we do inclusive business,” she added. ♦

Date of Release: 14 September 2018

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