It has been more than two months since the quarantine was implemented and the effects of COVID-19

on businesses in the Philippines are drastically being felt. With several establishments forced to close
down, the Philippine economy could be on its way to the verge of collapse if the pandemic isn’t
contained.

Since the implementation of the Enhanced Community Quarantine (ECQ), companies are trying to keep
up with the new set of demands and protocols. Here are some insights into the impact of COVID-19 on
businesses in the Philippines.

New Normal Established

People social distancing

We often hear words like “social distancing” and the “new normal” these days as we live through the
pandemic. The pandemic has been crippling both Filipino families and businesses alike.

Impact On The Economy

There is no doubt that the economy as a whole is now on the brink of a recession. Several business
industries have taken a much slower pace due to the global pandemic affecting the flow of supply and
demand in the country. According to Rappler, the National Economic and Development Authority
(NEDA) has estimated that the Philippines’ gross domestic product (GDP) may be as low as -0.6% this
year.

It is estimated that the Philippines may lose between P276.3 billion and P2.5 trillion based on how long
the pandemic will ensue. The pause in construction due to COVID-19 may postpone future economical
endeavors.

Barriers On Trade

Trade couriers

To keep our economy breathing, the Philippines imposed no restrictions on imports and exports within
the country. An article by Pharmaceutical Technology stated that according to the Philippine Statistics
Authority (PSA), China is the country’s top trading partner, making up 18.8% of its total trade. This is
together with Korea and Japan in terms of imports.

The coronavirus may result in a more subdued trading economy in the Philippines for the year 2020. As
for healthcare supplies and equipment, the Philippine government ordered that they will not be
subjected to taxes and fees. This greatly benefits the great influx of COVID-19 patients in need.

Monetary Struggles of Small and Start-Up Businesses

Big conglomerates may survive the current economic crash, but micro, small, and medium enterprises
(MSMEs) in the Philippines are taking the hardest hit financially. According to the latest List of
Establishments from the Philippine Statistics Authority (PSA), there are 998,342 MSMEs in the country,
which takes up 99.52% of all local businesses as of 2018. However, lessening of employees are needed
to keep up with their financial demands.

According to an article by CNN Philippines, the government has already allotted a P120-billion credit
guarantee program and P51-billion wage subsidy programs for micro-businesses. This is through the
Department of Finance together with the Department of Trade and Industry’s low-interest lending
program for small businesses. Forcing the government and supermarkets to create new rules to prevent
further shortages.

Some businesses ramped up their production, with the government promising incentives to companies
producing essential goods through commonly imposed taxes. Other businesses are using online means
to deliver products to their consumers and other unorthodox methods for them to survive the negative
economic effects of the pandemic.

These issues may continue to persist if we don’t combat the virus sooner. Until the pandemic is
resolved, the Philippine economy may take devastating damage as days go by.

Key Takeaway

The sudden socio-economic threat imposed by COVID-19 is a crisis currently endured by countries
across the globe. With the effect of COVID-19 on businesses in the Philippines, it is truly a challenging
time for all.

https://sciencepark.com.ph/blog/covid-businesses-philippines/