“Ticking bomb”- SMEs in COVID19 peril

Amidst the viral menace that the world faces, small and medium enterprises (SMEs) looms as the most highly at risk economic sector.

“Ticking bomb” is how the situation is described by Andrew Masigan, an economist, entrepreneur and opinion columnist of the Philippine Star.

Facebook early on recognized this danger and recently launched a financial grants program amounting to 100 million dollars to be made accessible  to up to 30,000 small businesses  impacted by the outbreak worldwide.

SMEs are fighting for their lives, Masigan, who owns a restaurant group,   said.  “How can we sustain our supply chains amidst the quarantine and the curfew?” he asked.  He also expressed concern over employee compensaion , particularly of those unable to report for work.

With the closure order on all non-essential business establishments, most small entrepreneurs are hard pressed meeting rental and payroll obligations, with no sales to draw resources  from.

It did not help, he added,that government guidelines were unclear and confusing.

Although many small businesses intend to follow rules, “we are left confused with contradicting directives that come to us piecemeal.”

Government should have been ready with clear implementing guidelines before it announced the lockdown, Masigan further said. 

The lack of a single spokesman/authority compounded matters, he said, with multiple pronouncements from various sources, like the Department of Health (DOH), Department of Labor and Employment (DOLE), Department of Trade and Industry(DTI), Metropolitan Manila Development Authority (MMDA), etc. 

The Philstar columnist gave suggestions on how government can alleviate the plight of the sector.

Masigan proposed a mandatory reduction of business space rentals by 40 per cent, a freeze of  minimum wage increases for a year, bank amortization holidays for small business borrowers, and a review of DOLE’s P5,000-per-employee subsidy requirement.

Photo credit: wikimedia

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