MSMEs expect 50% decline in sales

188
Infographic vector created by freepik - www.freepik.com

By: Manila Bulletin

Micro, small and medium enterprises (MSMEs) expect as much as 50 percent decline in sales and revenues this year due to the COVID-19 enhanced community quarantine (ECQ) as they asked government to provide additional working capital and allow all with online capabilities to resume operations during the lockdown.

Roberto Claudio, past president of Philippine Retailers Association and current vice chairman, in a presentation before the webinar on “Helping MSMEs Survive the Pandemic” organized by the Management Association of the Philippines urged government to help save MSMEs, which account for 99.5 percent of total businesses in the country, employ 5.7 million jobs and contribute 35.7 percent to the economy.

As working capital are depleted and cash flow are turning negative, Claudio said MSMEs need to continue paying for their obligations like salaries, utilities, suppliers, landlords, taxes among others.

“We have to save the MSMEs from collapse due to the prolonged lockdown. We have no sales and revenues for almost 3 months now and reopening to general community quarantine (GCQ) is still unsure,” said Claudio, who owns the country’s leading sports goods and apparel store chain Toby’s.

To save MSMEs during this lockdown, Claudio has proposed to the Department of Trade and Industry and the Inter-Agency Task Force on Emerging Diseases to allow all businesses, essential and non-essential, with online capabilities to resume online operation.

“Online transactions are compliant with all health protocols. We need the cash flow at least pay our people and prevent mass layoffs. Online can help,” he urged.

Based on his estimates, allowing all retailers with online capabilities to resume operations would save 2 million jobs.

Of the registered one million MSME establishments registered with the DTI, Claudio estimated that around 200,000 have existing online capabilities and another 200,000 can easily introduce online services. “If each of these employs just 5 workers that means 2 million workers employed,” he said.

Once the ECQ is lifted, Claudio also urged the government to provide more financial aid to propel MSMEs.

“We need the government to provide more financial assistance to the micro & small businesses as banks are wary of lending to this group. Banks must also to offer favorable and liberal terms to the medium category,” he noted.

This is because even if the quarantine is lifted, Claudio said customers will not be comfortable going back to stores/mall so the “rest of the year will continue to be bad.”

 

Read full story HERE.