Businesses in the Philippines struggling to cope with COVID-19
As the COVID-19 pandemic continues to place an exerting economic toll on businesses around the world, many are struggling to stay afloat.
In the Philippines, a staggering 70.6% of micro, small and medium enterprises (MSMEs) have been forced to temporarily close, a paper published by the Asian Development Bank (ADB) has revealed.
After the Philippines, the worst affected countries in South-East Asia were Laos (61.1%), Indonesia (48.6%) and Thailand (41.1%). The majority of MSMEs in the Philippines (58.8%) also reported zero income, while 28% said revenues fell by over 30%.
66.2% of MSMEs in the Philippines have also laid off workers on a temporary basis, as compared to Laos (53.5%), Indonesia (51%) and Thailand (42.3%). This, comes despite the best efforts of the Philippines government to offer assistance to MSMEs in the country.
Last month, the state-owned Philippine Guarantee Corporation (Philguarantee) agreed to back loans of six banks worth 10.2 billion pesos (US$210 million) for MSMEs.
These will provide partial guarantee cover for MSME loans in the event that they cannot be paid back, and follows up on the 37.5 billion pesos (US$775 million) in credit guarantees that Philguarantee has already approved in the first half of 2020 for 22 accredited banks.
It would also appear that MSMEs in ASEAN are not finding remote working an effective arrangement, with the ADB paper highlighting that only 13%-21% of MSMEs in the Philippines, Laos, Indonesia and Thailand having implemented work-from-home (WFH) policies, instead turning to temporary layoffs to deal with the pandemic.