Part 1 of 2
IN this commentary, we discuss the findings and policy recommendations arising from a survey of 97,000 low-income households in microenterprises conducted in May 2020, who are clients of the microfinance institution ASA Philippines. Our aim is to shed light on the conditions faced by these low-income households and how they are coping with the situation. To summarize the results briefly: the survey gives evidence that households in microenterprises, as represented by clients of ASA Philippines, especially those in the lowest income category, were severely affected by the enhance community quarantine (ECQ) and likely are still suffering from the economic fallout from Covid-19. Given the lack of state support, the pandemic has likely contributed to increased poverty and inequality in the country.
Methodology
The sample size of 97,000 corresponds to a little more than 5 percent of ASA Philippines’s total 1.9 million clients in the country. Given the difficulties of conducting a survey during the ECQ, the sampling method was convenience sampling and was limited to those who were willing and available to respond to the survey during the lockdown. There was no probability sampling undertaken, so the percentages reported here pertain only to the survey respondents rather than as estimates for the population of all microenterprises in the country.
Profile of household respondents
The survey respondents were spread across all the 17 regions of the country, and varied in size by region from 2,034 respondents in ARMM to 9,881 respondents in Region 4A. Majority of the households surveyed (54 percent) had a monthly income of P10,000 and below pre-ECQ. Another 32 percent had monthly income from P10,001 to P20,000 pre-ECQ. All respondents were females, reflecting the target client base of the microfinance institution. By age group, 57 percent were 31-50 years of age, 20 percent were 51-60 years of age, 19 percent were 18-30 years of age, and 7 percent were 61 years old or older.
Impact on households in microenterprises
Earnings level. The respondent households reported their monthly income pre-ECQ and during the ECQ only in terms of the income range where they belong, which is in increments of P10,000 (starting from P10,000 and below) up to P100,000, and a highest category of P100,000 and above. Of the total households, 35 percent reported moving to a lower income category during the ECQ and only 3 percent reported moving to a higher income category. But note that 54 percent of the households were in the lowest income category already pre-ECQ, so it is not possible for them to move to a lower income category. If the sample is limited to households who were at least in the second income level pre-ECQ, then 76 percent reported moving to a lower income category during the ECQ.
Provision of basic needs. Close to half of all households (47 percent) reported they were not able to provide enough for their families’ basic needs (food, water, medicine, etc.) during the ECQ. Only 39 percent said they were able to provide the same as before, and 14 percent said they were able to provide more than enough.
Eating less and having no food. Close to a third of all sample households (31 percent) reported at least one member experiencing eating less than they wanted during the ECQ because they lacked food. Among those who experienced eating less than they wanted because of lack of food during the ECQ, 26 percent experienced it twice, and another 26 percent experienced it at least three times.
About 12 percent of all sample households reported experiencing having absolutely no food to eat in the house during the ECQ. Among those who reported experiencing having absolutely no food to eat in the house during the ECQ, 43 percent experienced it at least twice.
[1] This is a condensed version of Ducanes, G., L. Lanzona, and P. Tuaño. 2020. The Impact of Covid-19 and the ECQ on Low-income Households in Microenterprises: Analysis of the ASA Philippines Client Survey. Ateneo de Manila University Department of Economics and Ateneo Center for Economic Research and Development Policy Brief No. 2020-23. https://ateneo.edu/sites/default/files/downloadable-files/Policy%20Brief%202020-23.pdf
[1] Associate Professor, Ateneo de Manila University Department of Economics. E-mail: gducanes@ateneo.edu
[1] Professor, Ateneo de Manila University Department of Economics. E-mail: llanzona@ateneo.edu
[1] Associate Professor and Department Chair, Ateneo de Manila University Department of Economics. E-mail: ptuano@ateneo.edu
To be concluded next week