MSMEs seek financial assistance as business greatly affected during the pandemic

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A crew of a drive-thru cafe wearing full personal protection equipment handling change to the customer 
Photo by THEPHILBIZNEWS

By Alithea De Jesus

With the recent easing up quarantine measures to contain the spread of coronavirus, more micro, small and medium enterprises (MSMEs) are now operating fully or partially but the majority of them in need of financing assistance within the next three months, according to a recently conducted survey.

The Department of Trade and Industry (DTI) conducted a second survey from July 19 to August 7 through a dedicated webpage within its website. There were 2,171 respondent MSMEs showing more of them resumed operations for the period after June 17.

However, the number of MSME respondents that experienced both a decline in sales and in workforce size also increased as the majority of them restart operations, survey results show.

The government placed Metro Manila and several provinces under a general community quarantine (GCQ) from June 1 to Aug. 2.

It reverted these areas to modified enhanced community quarantine (MECQ) from Aug. 3 to 18 amid calls from various medical associations for more stringent quarantine status to arrest the continuous rise in coronavirus disease.

The survey found that the majority of the respondents from the wholesale, manufacturing, accommodation, and other service sectors experienced about 50-percent decline in sales and workforce; while for those under repair service and finance sectors by more than 75-percent decline in sales from March 16 to June 17.

By effect on the workforce, the repair industry also underwent more than 75-percent decline.

The enhanced community quarantine (ECQ) was imposed over Luzon on March 17 to April 30, and extended until May 15 in Metro Manila and other high-risk provinces.

After June 17, the majority of those under the wholesale, manufacturing, other services, and finance industry sectors indicated that the size of their workforce remained the same; while for accommodation and repair industry sectors recorded about 50-percent decline.

To cope with these challenges, 67.5 percent of MSME respondents are in need of financing assistance within the next three months.

Apart from financing, other assistance they need includes marketing, compliance with government regulations, technology upgrading, and skills/management training.

Considering the survey findings and the respondents’ inputs to other ways the government can help them, it recommended the need to intensify financing aid programs, as some of them rely on this for recovery and continuation of operations. settlement of dues and payables, additional capital, and product development.

The survey said maximizing online marketing platforms is also imperative to expand “buy local” and related campaigns so MSMEs can take advantage of the growth in online shopping during the pandemic.

It also underscored the importance of expanding the seminars offered to include business management amid the new normal, online business opportunities, and digital marketing.

Meanwhile, 82.9 percent of the respondents are micro-enterprises by asset size, while 84.1 percent by employee size.  Some 33.5 percent are under the manufacturing sector.

Existing clients of the DTI, including those of its attached agencies and other development partners, with records under the Client Profile and Monitoring System (CPMS), Knowledge Connect, and those in the databases of Kapatid Mentor ME (KMME), MSME Summit, RapidPass, and DTI regional offices, among others, were invited to participate in the survey.

The three regions with the most number of respondents are National Capital Region (421 or 19.4 percent), Region 3 (292 or 13.5 percent), and Region 9 (245 or 11.3 percent).

The DTI conducted the first impact assessment of coronavirus on the MSME sector in June with 2,940 respondents.

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