Presidential Directive for Continuous Review
- On February 14, 1995, President Fidel V. Ramos directed the SMED Council to continuously review and update the SME definitions.
- The objective was to enhance responsiveness to global competitiveness.
Need for Updating SME Definitions
- The prior SME definitions used for credit allocation became outdated since the last revision in 1992.
- Price increases since 1992 necessitated redefinition to maintain relevance.
Redefined Categories of Enterprises Based on Total Assets
- SME classifications are based on total assets, inclusive of loans but excluding land on which office, plant, and equipment are situated.
- Micro Enterprise: P150,000 and below.
- Cottage Enterprise: above P150,000 to P1,500,000.
- Small Enterprise: above P1,500,000 to P15,000,000.
- Medium Enterprise: above P15,000,000 to P60,000,000.
Generic Definition of Small Enterprises
- All enterprises with total assets of P15,000,000 and below fall under the generic category of small enterprises.
Application to Various Business Forms
- Definitions apply regardless of business structure, including single proprietorships, cooperatives, partnerships, or corporations.
Exclusions in Asset Valuation
- Land where the business's office, plant, and equipment are located is excluded from total asset calculations.
Effective Date and Approval
- The redefinition was approved on April 20, 1995, by the SMED Council Secretariat Head, Ma. Fina C. Yonzon.