44% of MSMEs were operational during pandemic

Trade Secretary Ramon Lopez said at a Senate hearing that less than half of all micro, small and medium enterprises (MSMEs) in the Philippines are fully operational due to the effects of COVID-19 lockdown protocols.

Sec. Lopez reported that 44% of 33,145 MSMEs throughout the country were able to operate fully as of June 2021. Majority or 46% have partial operations while the remaining 10% closed permanently.

The June data also showed that 53.8 percent of the MSMEs reported a decline in sales, he added.

The DTI chief explained that some of those who stopped operating chose to try other ventures, particularly new businesses that can potentially be profitable during the pandemic.

“They look for other sources of income and therefore they have to operate another business. They pivot, they change their business model and register a new one,” he said.

Some industries are struggling more compared to other sectors because of restrictions imposed on them, such as tourism, recreation, entertainment, live performances and amusement parks, added Lopez.

Meanwhile, government allowed full operations for manufacturing, export industry, business-process outsourcing and essential services sector.

Lopez also shared the impact of the pandemic-induced lockdown protocols on other industries:

The footwear industry saw its sales drop by 80%, indicating that the non-essential sector was unable to operate during the pandemic.

“At the start of the lockdown, practically all stopped operations. Only those who serviced the footwear requirements of the military reopened soon after the lockdown,” Lopez said.

Lopez said the aerospace industry will need two to four years before it can see pre-pandemic output levels again.

Citing figures from the Shipbuilding Association of the Philippines, Lopez said the 118 local shipyards employing 30,000 workers were affected by the pandemic.

Lopez also said airlines suffered massive losses amid travel restrictions.