“They are not just the backbone of the economy, they are the economy,” Asialin.k Finance president & CEO Samuel Cariño said, describing the micro, small, and medium enterprises (MSMEs) during a panel discussion in the recent 2025 Midyear Business Economics Briefing by the University of Asia & the Pacific’s Business Economics Club. Cariño was seconded by other financing leaders in the panel, including Global Cebuana president & CEO Nicole Lugtu-Ugarte and AFC SME president & CEO Bernadette Recto.
In the Philippines, the MSME sector is made up predominantly of the middle class, hence helping entrepreneurs start or expand directly helps the middle class. Through new businesses, employment improves, production increases, and networking becomes stronger. The sense of community glued by relationships is driven by the MSMEs triggering more and more economic activities. We’ve seen this unfold again after the height of the community quarantines due to the COVID-19 pandemic, where small shops re-opened gradually increasing mobility not just of products and services but of money as well.
MSMEs use loan and financing products to bridge short term financial needs, be it for salaries of their employees or for sales that will be paid by their customers at a later time. They also need money when expanding, for additional inventory, more vehicular units for transportation and logistics, and to open new branches. “Hindi masama’ng mangutang, nasa tamang pag-gamit lang ‘yan,” Cariño pointed out. Lower interest rates usually are accessible through collateral loan products where car, truck, or real estate ownership is mortgaged in exchange for immediate cash but without having to surrender the units to the lender—the borrower gets to keep it and continue using it for the business.
Another segment which mostly comprises the middle class is the overseas Filipino workers (OFWs). “More than 70 percent of OFW families belong to the middle class,” said Lugtu-Ugarte. They send money back to their families in the Philippines (remittances reached 38 billion USD in 2024), which are used for consumption, education, and opening up or expanding businesses. Lugtu-Ugarte then shared that 17 percent of their customers use their loans for business capital. She also shared stories of OFWs who, from being their customers, became their loan partners, and have helped their neighbors by opening up businesses—a testament to how empowering OFWs help not just families but their communities as well.
The real estate industry is heavily influenced by the middle class and MSMEs. They have the disposable income to purchase real estate which they personally use for their growing families or for their businesses, including rentals. Recto shared that they cater to a lot of OFWs investing in properties for family and business use. This signals the desire of Filipinos outside of the country to invest back home and plan for retirement ahead. “We aim to help the real estate industry in upgrading previously underdeveloped areas; there is high demand for mixed-use developments or live-work-play spaces,” said Recto.
All three financing leaders committed to continuously support the expansion of the Filipino middle class and MSMEs.
