Multi-Sectoral Group Comes Together to Help Entrepreneurs Weather Pandemic-Caused Recession
The considerable resources of the Association of the Filipino Franchisers Inc. (AFFI), the Department of Trade and Industry (DTI), Go Negosyo, SM Foundation, Security Bank, and Union Bank are being brought to bear in efforts to jumpstart a languid economy stalled by the effects of the three-month long coronavirus lockdown.
The multi-sectoral group is raising awareness on the plight of millions of Micro Enterprises and Small and Mid-Sized Enterprises – collectively, the MSMEs – in the hopes of coaxing the buying public into increased patronage.
The group has thrown together a campaign called BUYANIHAN; a creative juxtaposition of the word buy and the local idiom bayanihan, referring to a spirit of communal unity and cooperation, as an economic lifeline.
Though deadly and extensive, the pandemic is not isolated on the health-front.
When the enhanced community quarantine (ECQ) was invoked throughout Luzon, establishments providing basic necessities and services were deemed essential and were allowed to remain open, albeit on a skeleton force.
Much of those belonging to the MSMEs, however, were not listed. They were hit hardest due to the closure of malls and retail establishments. As were micro enterprises like barbershops and salons, massage parlors and spas, and the neighborhood street peddlers.
“These businesses have lost a significant amount of income due to the challenges of the ECQ,” said DTI Secretary Ramon Lopez, explaining BUYANIHAN’s rationale. “We need to ensure their survival.”
DTI revealed that of the 1.42 million registered businesses, an overwhelming 99.6% belong to MSMEs, with the majority, 88.5%, classified as micro enterprises.
They generate 63.19% of the country’s total employment figures.
“MSMEs are the backbone of our economy. This virus has brought a devastating blow to the physical and financial health of our nation. And we must work together to save both,” continued Lopez.
Prior to the ECQ, economists projected rosy targets of 6.5% to 7.5% GDP growth for the Philippines this year.
On March 19, around when the lockdown commenced, those numbers were lowered to a pragmatic 4.3% to a dismal minus (-)3.9%.
Pessimism is reasonable, in light of the wholesale impact on declining transport, tourism, exports, remittances, and reduced consumption; historically, the main driver of the Philippine economy.
Even Facebook last May said that one in three small businesses that have shut down don’t expect to reopen again.
When you consider that most MSMEs are located at the National Capital Region, Region IV‑A (CALABARZON), and Region III (Central Luzon) – regions in the main island from which 73% of the country’s GDP comes from and where the lockdown was rigorously enforced – then the true weight of the ECQ becomes clear.
This is because MSMEs rely on cash flow for daily operations: salaries to be paid, employee benefits to be fulfilled, rent, loans, supplier accountabilities, and credit card bills are still due. Although the quarantine levels have now lightened, during the ECQ they have had zero cash flow.
Perhaps more than any entity aware of the hit that MSMEs are experiencing is the SM Group, the Philippines’ largest mall operator and consequently it’s biggest retail space lessor.
Its SM Foundation has been generous in providing funds, medical supplies, and protective equipment. Its SM Supermalls have waived rentals from March 16 to April 14.
“We share our tenant-partners’ concerns at the unfortunate situation and will waive rental charges for those affected and unable to operate during this period,” said SM Supermalls President Steven Tan. “This support forms part of our commitment to fight the effects of the outbreak.”
That alone benefits 19,153 SM mall tenants nationwide whose doors are now slowly but surely reopening for business.
Security Bank, one of the country’s leading universal banks and cited by Asiamoney as the “Best Bank for SMEs” in 2017 and 2019, eased its process for facilitating business loans for MSMEs in need of liquidity and lowered percentage in its Ecommerce payment gateway.
“The COVID-19 pandemic has brought the world unprecedented disruption, but with each of us doing our part, we will overcome this challenge and get better,” said Security Bank President and CEO Sanjiv Vohra.
Meanwhile, Union Bank, ranked by the BankQuality Consumer Survey on Retail Banks as
the second most helpful bank in Asia-Pacific during the coronavirus crisis – the only Philippine bank in the top 20 list – eased up account openings by shifting it online and providing checking accounts with affordable depository requirements, enabling MSMEs to further legitimize their businesses.
So there is hope.
Easing of quarantine restrictions is a good first step. Provided the population behaves in ways that stem the infectious tide, then the wheels of commerce can start turning again.
And as these economic engines came to a screeching halt, it will take no more than a concerted effort to jolt it back from inertia. A bayanihan movement, if you will.
Or, a BUYANIHAN.
“MSMEstook a direct hit, incurred big losses,” said AFFI President Jorge Noel Wieneke. “It’s back to zero for many, or back to the starting line. They are now in the ‘ICU’ and they need a blood transfusion. We can fix this with a BUYANIHAN spirit.”
It is a simple, doable solution. Consumers just need to start consuming again. Start buying again.
But for now, buy local to support our MSMEs.