Connect with us

Hi, what are you looking for?


Liquidity woes hound MSMEs amid pandemic

ABOUT 40% of surveyed Philippine businesses have up to five months of liquidity left due to the impact of lockdown restrictions, a study conducted by the Management Association of the Philippines (MAP) and the University of Asia and the Pacific (UA&P) showed.

UA&P School of Economics Vice Dean Peter Lee U in an online event held by MAP on Monday presented the COVID-19 (coronavirus disease 2019) Outbreak and Impact on Business Establishments study, which collected online survey responses from 33 representatives across various sectors and conducted online interviews with representatives from 10 firms.

The study in September and October covered the food manufacturing, accommodation and food services, construction, wholesale and retail trade, and transport sectors, of which more than 60% were micro-, small-, and medium-sized enterprises (MSMEs).

Among the respondents, 40.7% said they had up to five months of financial liquidity left to continue operations. Broken down, 21.9% said they had less than three months of liquidity, while 18.8% said they had three to five months left.

In contrast, 31.3% said they had a year or more financial liquidity left.

Asked to select three business areas that were affected the most by the pandemic, respondents identified the financial, transport and production areas as top concerns.

The financial area figured most often among companies’ top three areas, but sales and production were more often cited as the number one concern, Mr. Lee U said.

The survey found that the drop in headcount varied for each sector, with travel and recreation as well as hotel and accommodation sectors seeing the biggest reductions at 67% and 48% respectively.

The construction sector’s average headcount reduction was 47%. Nonfood manufacturing had a 39% drop, while the food counterpart only had a 14% decline.

The hotel, restaurant, and art sectors experienced more than 50% decline in sales, which resulted in salary declines of 31-50% for the majority of the businesses. But the salaries of many fell by more than half.

“The decline in sales here is also an explanation for the reduction in employment and headcount,” Mr. Lee U said.

“As jobs are lost, therefore, for many households, incomes then are also lost. This later on aggravated or was expected to aggravate further the dropping demand and sales. And so it becomes a vicious cycle.”

In construction and food manufacturing, sales dropped by 10-50%. Salaries also slipped by 31-50%.

Firms reported some challenges, including mobility restrictions leading to canceled projects and lower customer orders.

Most companies saw raw materials costs increased by 25-50% due to the added costs of transporting goods during the lockdown, Mr. Lee U said.

The firms said they needed direct financing through loans, tax incentives, subsidies for utilities and added health safety costs, and access to newer financing models like crowdfunding and peer-to-peer lending.

The businesses were also seeking consistent safety rules and government assistance in moving goods. — Jenina P. Ibañez

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



Preliminary results of Philippine Statistics Authority’s latest Labor Force Survey showed there were around 3.764 million unemployed Filipinos in June, inching up from 3.730...


THE PHILIPPINE economy’s recovery will depend on how quickly business confidence is restored, which will in turn boost private sector investments, Moody’s Investors Service...


INVESTMENT PLEDGES approved by the Philippine Economic Zone Authority (PEZA) climbed by 8.5% in the first half after coming off a low base last...


CHINA LIANHE Credit Rating Co. maintained its “AAA” credit rating for the Philippines with a “stable” outlook, as it expects economic recovery to begin...


AYALA Land, Inc. (ALI) on Tuesday said it generated P3.3 billion in the second quarter, over 16 times the P426-million income it logged year...


SOLAIRE Resort & Casino operator Bloomberry Resorts Corp. finished the quarter with a “respectable” performance after trimming its consolidated net loss to P1.2 billion,...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...


US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...


THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!