COVID-19 brings down business, employment
COVID-19 brought untold miseries for Philippine business
MANILA – The ongoing COVID-19 pandemic brought significant temporary and permanent impact on different companies in the Philippines, notable along micros, small and medium enterprises.
In an online survey entitled “Impacts of COVID-19 on firms in Philippines,” conducted by the World Bank in collaboration with the Department of Finance and the National Economic and Development Authority with the results of which were released today at 6:00 A.M., revealed 40 percent of the respondent firms reported temporary suspension of their operations with 20 percent by government mandate and 20 percent voluntarily. It was found 15 percent of the surveyed firms reported to have closed permanently which indicates COVID-19 community quarantine measures had brief and lasting impact on their operations.
While the Duterte government began easing the community quarantine last June, companies disclosed a deep reduction in sales revenue. It was found out sales revenuer have gone down by 64 percent on average between April and July 2020 with 89 percent of surveyed firms reporting a continue reduction in sales, in addition to what has been described as “already significant loss of 69 percent experience in march 2020” compared to February 2020 with 75 percent of firms reporting reduction in sales.
It was also found one of two companies reported reduction in payments to employees as close to half or 48 percent of companies reported a reduction in the number of workers, while the rest maintained the level of employment and one percent reporting new employment.
About two thirds of the companies utilized digital solutions for sales, marketing and payment methods to adopt to the new normal as a sizable number also invested in digital solutions (23 percent) or repackaged their product mix (40 percent).
However, it was also discovered a high degree of uncertainty and general pessimism about their operations in the next three months and will likely limit additional investment and employment thereby restraining the firm’s growth. Business activities are expected to remain subdued.
Asked what the government should do to help, they said cash transfers, subsidized interest rates, deferral of loan, rent or utility payments and tax exemptions or reductions will be in order.
The participants included micro (59.3%), small (19.2), medium (12.8%) and large (8.7%) from across the country. (Melo M. Acuña)