27 March 2020

Published also in Business Mirror

Distressed micro, small and medium enterprise (MSME) exporters in the Philippines are appealing for government intervention, primarily 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. 

Thirty-six respondents representing 13 sectors made the appeal 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. 

More than 70 percent 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, canceled export and import orders, as well as 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), canceled loans, canceled trade fairs, travel difficulties, liquidity and excess manpower, and delays in remittance. 

Slowdown in market demand is the biggest problem identified by the respondents, followed by higher costs of raw materials and intermediate goods and 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.