How the COVID-19 Pandemic Affects SMEs in the Philippines
In this article, we will look at how the COVID-19 pandemic is affecting SMEs in the Philippines. The article will also examine how this pandemic will affect tourism and remittances. The impact of the pandemic is not limited to SMEs.
Impact of COVID-19 pandemic on SMEs in the Philippines
The COVID-19 pandemic has significantly affected the world economy, but its effects on SMEs in the Philippines have been even more devastating. The prolonged community quarantine imposed to contain the virus has negatively affected MSMEs. The report highlights how the epidemic has affected SMEs and outlines coping mechanisms they adopted to adapt to the crisis. It also makes recommendations for policymakers and financial service providers.
The research team surveyed 133 randomly selected business owners in Candelaria, Quezon. The questionnaire asked them a variety of questions, including their size and industry. In addition, the respondents answered questions regarding the effect of the pandemic on their operations.
Many MSME companies were disrupted by the disease, with many businesses closing or delaying operations. They cited staff health and supply chain disruption as the main reasons for closure. This also affected the number of active jobs. There were reports of job losses in retail, arts and entertainment, personal services, culinary, and hospitality firms. It is also important to note that the virus has caused many new cases of pneumonia and other severe illness.
While most business owners expect a loss, they have different platforms to help them break through the losing end. The local government must also intervene in the situation to keep SMEs running. This is vital to their sustainability.
Impact of COVID-19 on tourism
The recent outbreak of COVID-19 has adversely affected the Philippine tourism industry. Involuntary quarantine, travel restrictions, and social distancing have undermined optimistic forecasts for arrivals and economic activity. However, the crisis presents an opportunity for the Philippine tourism industry to pivot. This paper utilizes value-chain theory and stakeholder theory to examine how to address this problem. These theories suggest that a coordinated approach by the tourism industry, government, and stakeholders will help the country regain its former tourism growth.
The tourism industry has been a major contributor to the Philippine economy. It accounted for almost a quarter of GDP in 2018 and contributed almost thirteen percent to the GDP last year. However, as international travel restrictions remained in place through 2020, tourism is expected to grow only slightly this year. However, the industry is expected to resume normalcy in six to twelve months.
While it is difficult to pinpoint the exact effects of COVID-19 on tourism, the researchers suggest that it is likely to influence tourism. The study recommends that a significant initiative be undertaken with specific proposals for improving the industry. This will help the country attract more tourists and increase its GDP.
The COVID-19 crisis has severely affected the tourism sector in the Philippines. The virus has slowed travel, shut down international airports, and affected hotels and mass gatherings. Additionally, the government has imposed quarantine requirements for foreign nationals who have just come from China. As a result, the number of Chinese tourists visiting the Philippines has been reduced by approximately three-four million.
Impact of COVID-19 on remittances
Remittances are money that migrant workers send home to their families in the country where they are working. They represent the private savings of foreign workers and are an important component of the GDP of many developing countries. During tough economic times, OFWs tend to send more money home. The COVID-19 pandemic has resulted in many OFWs being laid off or not being able to find work. This has resulted in a drop in remittances to the Philippines.
In April 2020, World Bank analysts predicted that remittances to the region will fall by a total of 20%, and in the first quarter, they fell by 17 percent. This negative impact on remittances was partially offset by the positive growth in remittances from Asia and the United States. Meanwhile, the Middle East and Europe, which are typically more affected by COVID-19, had a decline of more than 3 percent.
Remittances are an important source of financial assistance for the Filipino diaspora, and millions of households depend on these funds to meet their basic needs. However, the data may not accurately represent the true number of remittances. These remittances must be sent through formal channels, like correspondent banks or money courier offices, in order to be recorded in official data.
COVID-19 is still a risk for remittances. It has been proven that the virus can spread from poorer to richer countries. This means that there must be adequate vaccines in the ‘Global South’ to prevent this from happening. Vaccination rollout must also be more efficient, especially in developing countries.
