The COVID-19 pandemic is spreading rapidly, with new updates flying in every

minute. In the Philippines, the enhanced community quarantine, done as a response to

lessen the spread of the COVID-19 pandemic has brought economic activity to a
standstill. The crisis has already transformed into an economic and labor market shock,
impacting not only supply such as the production of goods and services but also
demand. Consumers in many economies are unable or reluctant to purchase goods
and services. Given the current environment of uncertainty and fear, enterprises are
likely to delay investments, purchases of goods, and the hiring of workers. Although the
immediate priority of policymakers is to resolve the public health crisis, it is essential to
construct the right set of policies to pave the road to recovery and avert possible socio-
economic turmoil. As the situation evolves, many small business owners are unsure of
what steps to take to lessen the risk, protect employees, and support customers. SMEs
play a vital role in the Philippine economy, accounting for over 99% of all firms and
almost two-thirds of employment. In 2018, MSMEs generated over 5.7 million jobs. If SMEs
are unable to sustain their operations, their workers will not receive wages, or worse,
lose their jobs. This puts the livelihoods of millions of Filipinos at risk, and their households
could become highly vulnerable to hunger and poverty. As a consequence, this could
also slow down recovery and potentially trigger more socio-economic problems.
Tapping into emergency funds is what MSME owners are doing to cope with the
lockdown – no matter the size of the business.

The Philippine government is a stimulus package of approximately 200 billion

pesos ($3.93bn) to protect the citizens and businesses from the impact of the
coronavirus outbreak. The funds are expected to draw from non-budgetary sources.
The central bank announced its decision to reduce the interest rate on reverse
repurchase (RRP) facility by 25 basis points to 3.75% on 06 February 2020. The interest
rate on the overnight lending and deposit facilities was also cut to 4.25% and 3.25%,
respectively. To survive the COVID-19 crisis, the ILO recommended that SMEs need
better access to finance and working capital to help with their short-term cash flow. This
could come in the form of grants, affordable loans, or temporary tax exemptions. So far
the Duterte administration has set aside P1 billion for the Pondo sa Pagbabago at Pag-
Asenso (P3) microfinancing special loan package of the Small Business Corporation by
the DTI, as part of the P27.1-billion package vs coronavirus rolled out on March 16. It’s
the smallest amount among all other allotments on the list. MSMEs around the country
employ roughly 5.7 million workers, based on PSA data. About 3.8 million are employed
in MSMEs in Luzon alone. More than half (633,886) of all the MSMEs in the country are
located in the 8 regions in Luzon.

Here are some of my recommendations towards the crisis that business owners
are facing during this pandemic. Managing liquidity is the top priority for keeping
companies solvent, and liquidity analysis and planning will help that management. As
for Workforce People are a company’s greatest asset, and at this time, your people will
be worried about their jobs and their futures. Leadership will need to communicate
clearly and regularly what steps they are taking to secure their employees. Liquidity
concerns are causing many companies to consider worker furloughs, layoffs, or
terminations. Workforce modeling can help business assess their options, including the
effects of government programs and tax breaks, allowing them to use terminations as a
last resort. Keeping up with the changes may help the business survive. Tax is one form
of stimulus, and changes in tax rates and due dates can help companies conserve
cash and plan. Businesses need to check availability across the supply chain and
realistically assess demand given how much of the world economy is slowing, but they
also need to put a plan in place to reactivate orders once restrictions are lifted and
demand begins to grow. As of now, Businesses should follow protocols during COVID-19
pandemic.