Small firms face 'instant' death, uncertainty as COVID-19 slaps economy

Jessica Fenol, ABS-CBN News

Posted at Aug 03 2020 08:17 AM | Updated as of Aug 03 2020 09:45 AM

San Juan City businesses remain closed during the Coronavirus Quarantine. Jonathan Cellona, ABS-CBN News/File

MANILA - Events caterer Arabella Bautista is losing at least P80,000 a month since the COVID-19 pandemic lockdown started, excluding what she could have earned from her specialty cakes. 

The economy has gradually reopened after restrictions were eased on June 1. However, small businesses are still struggling to survive due to the impact of the global pandemic. 

Events and any form of social gatherings were prohibited during the lockdown imposed in March. Metro Manila, Cavite, Laguna, Rizal and Bulacan were put under modified enhanced community quarantine until Aug. 18 after cases surged. 

"Napakalaking kawalan sa akin ito. But it is also hard para sa mga partners ko at sa mga taong nagwo-work para sa akin," 41-year old mother of 3 told ABS-CBN News.

(This is a big loss for me. But its also hard for those working for me)

To weather the pandemic, Bautista, like most entrepreneurs, turned to online selling. She sells cakes and food to nearby areas.

Reflecting the plight of many, the first quarter economic growth contracted by 0.2 percent, the first time since 1998, due to the impact of COVID-19 and resulting lockdowns. 

Second quarter gross domestic product (GDP) could be worse, officials said, as it would cover majority of the lockdowns imposed to stem the spread of the disease. 

The economic growth for the "most difficult" quarter will be reported on Thursday, Aug. 6. 

In a virtual briefing BSP Gov. Benjamin Diokno told reporters that a single digit contraction in the second quarter "is nice," 10 to 15 [percent] is tolerable, while anything higher than 20 "could be problematic." 

Asked whether or not the country has entered into recession, Diokno said: "Let's just wait [for the numbers].

An economy is in recession if it sees two straight quarters of GDP contraction.

Diokno said economic growth in the third quarter could be "less negative or slightly positive" followed by a strong recovery in 2021.

"The most difficult quarter is the second quarter and we’ve passed that. I think we’re now on the rebound stage...I’ve seen the recovery is like a Nike swoosh," Diokno said. 

Acting Socioeconomic Planning Secretary Karl Chua said easing the restrictions in June reopened at least 75 percent of the economy.

NO ONE IS SAFE 

The computer shop business has been on a decline but the pandemic made it instant, young entrepreneur Keith Varias said.

At 29 years old, former Bangko Sentral ng Pilipinas and Citi 2017 Youth Entrepreneur of the Year awardee Keith Varias and his growing community-based IT business was also put to a halt by the pandemic.

The former Jollibee crew was lauded by top financial institutions for his ability to expand and grow his business at a young age.

His computer shops were forced to close when the lockdown started. Estimated losses could be at P71,000 per month, excluding rent in locations he does not own, the entrepreneur said.

"It's extremely hard. This is the only income source I have. Taking it away just like that put me in a very difficult position. Especially we're not prepared. I am very aggressive in reinvesting and I didn't save for times like these," Varias told ABS-CBN News.

"Computer shop business is already going on a down slope. But I thought it would take about 5 to 8 years before it really happens. Pandemic made it instant," Varias said.

For small businessmen like himself, the economy "is dying if not already dead."

Some 30 percent of businesses in the Philippines have closed permanently or temporarily since the COVID-19 pandemic hit, the Department of Trade and Industry said in July. 

Unemployment ballooned 17.7 percent equivalent to 7.3 million jobless Filipinos. 

Despite the setback, the entrepreneurs said they remain optimistic that one day they could still go back to normal.

"I'm sure naman na babalik ang lahat sa dati. Nakakalungot lang kasi lahat ng bagay na walang kasiguraduhan. We don't know kailan magbabalik lahat sa normal at kung ngayong new normal, paano kaya kami makakabalik sa business," Bautista said.

(I'm sure everything will be back to what it used to be. It's just sad that there is no certainty. We don't know when we're going back to normal, and if we can return in the new normal)

"Just hold on. The goal this year is just to survive. Profit is not the priority at times like this. We should focus on innovating and thinking for solutions to problems that we solve for the new normal," Varias said.