Through the fire with pandemic, businessmen in Philippines brace for recession

Jessica Fenol and Joel Guinto, ABS-CBN News

Posted at May 06 2020 04:47 PM | Updated as of May 06 2020 09:19 PM

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Quezon City businesses remain closed during the Coronavirus Quarantine on April 29,2020. Jonathan Cellona, ABS-CBN News

MANILA -- Through fire, drought and a botched military putsch, Jojo Tan's convenience store franchise remained open for 14 years, until the COVID-19 pandemic struck, plunging his business and many others into a day-to-day existence.

Tan's 7-Eleven store along Timog Avenue in Quezon City now records 500 transactions from 1,900 before the lockdown. Sales are down 60 percent and the shop is open less than 24 hours only on weekdays.

Faced with past calamities, natural and man-made, Tan said he "took it head on with courage and used our experiences from the past to tackle and overcome each and every obstacle."

"Then COVID-19 happened. We were stunned, to say the least. We were not prepared for it," he said.

"We are coping one day at a time. It is very difficult but compared to others, we still feel fortunate and blessed to have food on the table... Challenges and hardships are a necessary evil in our lives," Tan told ABS-CBN News.

Tan's plight mirrors the damage wrought by the pandemic and the resulting lockdown on the economy. The Philippines will report on Thursday first quarter gross domestic product data, which likely grew below 6 to 6.5 percent, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno.

Economists polled by Bloomberg gave a median growth forecast of 2.9 percent. 

The January to March numbers will precede what economic managers and analysts predict will be a recession -- two successive quarters of contraction -- before a recovery in the fourth quarter.

The lockdown or enhanced community quarantine in Metro Manila and urban areas deemed high risk is scheduled to end after two extensions, after which the areas may be placed general quarantine with fewer restrictions.

DIGITAL SHIFT

Shawarma cart operator Angelo Miguel Tantoco said he ramped up his social media presence to attract online buyers as the ECQ kept his physical locations shut.

The 27-year-old also said he was looking at other business opportunities to augment his income.

"Difficult is an understatement of how challenging it is to be a businessman in the time of COVID-19," Tantoco told ABS-CBN News.

"Let's just say that what we're earning now is just enough to get us through and survive each day. Hence, no savings put aside. Just enough to feed us and pay the bills," he said.

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One of Tantoco's shawarma carts before the COVID-19 pandemic. Gridiron Shawarma X Sausage Facebook Page

Tan, the convenience store franchisee, said his store accepts orders via Facebook messenger for pickup from customers. Some patrons walk longs distances just to reach the shop because of the lack of public transport.

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Tan posts available products on his Facebook page. Jojo Tan

SMALL BUSINESS RESCUE

So-called MSMEs or micro, small and medium enterprises make up 99 percent of all businesses in the Philippines, one of Asia's fastest-growing economies until the pandemic.

The government has promised loan facilities for MSMEs. To free up money in the system and encourage lending, the BSP slashed 100 basis points off the benchmark interest rate and cut 200 basis points from banks' reserve ratio requirement.

Further policy easing is possible with inflation at benign levels, Diokno earlier said.

The government also ordered rental relief for MSMEs to keep them from cutting jobs.

Jam Melchor, a 35-year-old chef and caterer, said demand spiked with people required to stay at home. However, this was offset by logistics costs as raw materials pass through tighter checks.

"I am expecting na makapag-cope tayong lahat sa pandemic na ito kasi as long as walang vaccine or cure walang assurance kung kelan matatapos lahat ito," he said.

(I am expecting we can cope with this pandemic because as long as there is no vaccine or cure, there is no assurance as to when this will end.)

'WALANG IWANAN'

His losses mounting, and with uncertainty over what will happen when the lockdown is lifted, Tan said he made a pact with his employees to stick it out with each other.

Workers are free to rest or stay at home if they fear going out of their homes would put them at risk of catching the disease.

"Mahirap itong pinagdadaanan kasi sa buong buhay ko, ngayon lang ako nakaranas ng ganito sa Pilipinas. Pero, walang iwanan," he said.

(We are going through difficult times. My entire life, I never experienced anything like this in the Philippines. However, no one should be left behind.)

"We have to remain positive that we can survive this. I am still optimistic that this too shall pass and one day, we will look back on this and just be glad that it is over," he said.

Tantoco, the shawarma chain operator, said he hoped deliveries will earn enough to preserve jobs, which is a "huge challenge" at this time.

"We just somehow accepted the fact that now is definitely not the time to make good money," he said.