How Economic Policies and Microeconomic Conditions Affect the Business Growth of SMEs in the Province of Marinduque

This study assessed the effects of economic policies and microeconomic conditions on the growth of Small and Medium Enterprises (SMEs) in the Province of Marinduque. Using a descriptive research design, both quantitative and qualitative data were collected through structured questionnaires and semi-structured interviews with SME owners and government officials. The study examined factors such as business size and type, years of operation, number of employees, revenue and profitability, access to financial resources, taxation and regulatory compliance, government support programs, trade policies, consumer demand, competition, raw material costs, and labor market conditions. Findings revealed that micro-enterprises dominate the sector, with most SMEs operating in service-related industries and generating annual revenues of PHP 500,000 to PHP 1 million. Access to finance remains a critical barrier, as 43.75% of respondents rely on personal savings rather than formal credit. Taxation policies showed the strongest correlation with SME growth (r = 0.412, p = 0.002), with many businesses viewing taxes and compliance costs as restrictive. Only 12.5% benefited from government support programs, indicating accessibility issues. Trade policies were found to have minimal effect, as most SMEs cater to local markets. Among microeconomic factors, consumer demand and purchasing power had the highest correlation with SME growth (r = 0.521, p = 0.001), with seasonal fluctuations and inflation significantly affecting revenues. Competition, raw material costs, and workforce challenges further constrained business growth. The study concludes that financial constraints, high taxation, bureaucratic regulations, weak access to government support, and fluctuating market conditions hamper SME growth in Marinduque. It recommends revising tax policies, simplifying compliance procedures, enhancing financial support programs, expanding market access, strengthening consumer purchasing power, encouraging innovation, stabilizing raw material costs, and improving workforce development. These interventions are essential to foster a more enabling environment for SMEs and ensure their long-term contribution to local economic development.