ExecutiveChronicles | The Impact of Covid-19 on Small Businesses in the Philippines | The Covid-19 pandemic is continuing to affect small businesses around the world. In the Philippines, many small businesses struggle to stay afloat due to the decreased demand for their products and services. This blog post will discuss the impact of Covid-19 on small businesses in the Philippines, as well as provide advice for those affected by the pandemic.
As of January 2022, there are over 24 million small businesses in the Philippines. These businesses employ over 60% of the country’s workforce and contribute over 34% of the country’s GDP. The Covid-19 pandemic has had a significant impact on these businesses, with many struggling to survive.
However, despite the significant challenges small businesses face in the Philippines, there are also some silver linings. The pandemic has forced many companies to adapt and become more innovative to survive. Additionally, the government has introduced several initiatives to help small businesses during this difficult time. Below are some of the common challenges faced by small businesses in the country during the Covid-19 pandemic:
Decreased demand
One of the most common challenges small businesses face in the Philippines is a decrease in demand for their products and services. This is since many people are either working from home or are unemployed. As a result, they have less disposable income and are more likely to cut back on their spending. This has significantly impacted businesses that rely on consumer spending, such as retail businesses.
To survive, many businesses have been forced to find ways to reduce their costs. For example, some companies have started selling their products online instead of brick-and-mortar stores. Others have downsized their operations to reduce their overhead costs.
Hiring difficulties
Some companies weren’t prepared for the pandemic and had to lay off employees to stay afloat. As a result, many people are now unemployed and looking for work. This has made it difficult for small businesses to find qualified candidates for open positions.
To combat this, some businesses have turned to free online recruitment software. This software enables companies to post job openings and receive applications from candidates all over the country. Additionally, it allows businesses to conduct video interviews with candidates, which is especially helpful during the pandemic.
Supply chain disruptions
Another challenge faced by small businesses in the Philippines is supply chain disruptions. This is since the country is heavily reliant on imported goods. The Covid-19 pandemic has resulted in the closure of many businesses in China, where a significant amount of goods are sourced from. This has made it difficult for companies to obtain the materials they need to continue operations.
In order to mitigate this challenge, businesses have started sourcing their materials from other countries. Additionally, some businesses have started manufacturing their own products instead of importing them.
Poor tourism
Many Filipinos heavily rely on tourism to make a living. The Covid-19 pandemic has resulted in a significant decrease in tourism, as people are hesitant to travel. This has had a substantial impact on businesses that cater to tourists, such as hotels and restaurants.
Despite their efforts to remain open, many businesses have been forced to close their doors due to the decrease in demand. They have implemented several solutions such as discounts and promotions to attract customers. However, these efforts have not been enough to offset the decrease in tourism.
Some were forced to change their careers to make a living. For example, some hotel workers have become drivers for ride-hailing apps like Grab. In contrast, others have started selling food online.
Government initiatives
Despite the challenges small businesses face in the Philippines, the government has introduced several initiatives to help them during this difficult time. For example, the Department of Trade and Industry (DTI) has created a PHP 5 billion fund to help small businesses. Additionally, the government has created an online portal where companies can apply for loans and other financial assistance.
These initiatives have helped many businesses stay afloat during the pandemic. Its primary objective is to provide financial assistance to small businesses to continue operations. However, some businesses are still struggling and may not be able to survive in the long term.
The bottom line
While the whole world may have been caught off guard by the Covid-19 pandemic, small businesses in the Philippines have been hit particularly hard. But the spirit of entrepreneurship is alive and well in the Philippines, and many companies are finding ways to adapt and survive. With the right support from the government, these businesses can weather the storm and come out stronger on the other side. What do you think should be the next step for the government in order to help small businesses?
