By THEPHILBIZNEWS STAFF
As the incident of COVID19 rises in the Philippines, many businesses from MSME are affected and appealed to the government to step in due to unabated financial losses.
Hence, the MSMEs are requesting financial assistance and tax breaks to offset their losses and enable business continuity as the coronavirus (COVID-19) pandemic continues to destabilize global trade and economy.
In a survey conducted this month among members by the Philippine Exporters Confederation, Inc. (PHILEXPORT) on the impact of the coronavirus outbreak on business operations, out of thirty-six respondents representing 13 sectors made the appeal.
More than 70% of the MSME exporters polled shared that they trade with China and other severely affected countries including the US, Japan, and Singapore, and are thus experiencing business disruptions with the outbreak of COVID-19.
A large number of respondents have reported late shipments, cancelled export and import orders as well as the loss of buyers and suppliers as the virus continues to spread across the world and travel restrictions are imposed.
Other issues raised include newfound difficulties in getting loans (financing squeeze), cancelled loans, cancelled trade fairs, travel difficulties, liquidity and excess manpower, and delays in remittance.
A slowdown in market demand is the biggest problem identified by the respondents, followed by higher costs of raw materials and intermediate goods and an increase in logistics cost. Three respondents said they have incurred losses of $35,000, $50,000, and $500,000, respectively, due to the impact of the COVID-19 crisis.
With border shutdowns and travel restrictions due to the novel coronavirus, majority of those surveyed said they are currently turning to the domestic market to temper their losses, and are urging the government to strengthen the local market to allow enterprises to continue operating.
Notably, the most recommended intervention is financial assistance. The respondents are asking for financial support for affected companies including a refund for cancelled trade exhibits, tax breaks, and loan assistance, among others.
Other recommendations are for the administration to strengthen e-commerce, subsidize highly appreciated local and international shows, expedite release of shipments at the ports, and look for other buyers aside from China.
In addition, the respondents are requesting a review of the implementation of the red lane/x-ray requirement for exports. “The implementation was too sudden without consulting affected parties, causing us to pay for unnecessary fees,” commented one respondent.
The 36 survey respondents came from shipping and logistics; chemicals; electronics; food; footwear; leather and travel goods; furniture; garments and textiles; holiday decors, gifts and premiums; housewares; IT products and services; metals; and resource-based sectors.
Small enterprises dominated at 41.7% of total respondents.