Less than 50% of MSMEs maintain full operation in pandemic—DTI chief
ONLY less than half of the micro, small and medium enterprises (MSMEs) are fully operating amid the lockdown protocols due to the Covid-19 pandemic, the Department of Trade and Industry (DTI) reported on Wednesday.
Trade Secretary Ramon Lopez said at a Senate hearing that 44 percent of 33,145 MSMEs have maintained full operations as of June. Majority or 46 percent have partial operations while the remaining 10 percent decided to close shop.
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 the business owners who chose to fold up have shifted to other ventures already. Lopez said they opted to start a new one which can potentially thrive amid 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.
Lopez said certain industries are struggling more compared to other sectors because of the restrictions imposed on them. He cited tourism, recreation, entertainment, live performances and amusement parks as examples of these.
“These are not the businesses to be in, I would say, in times of pandemic because of many restrictions,” he said.
On the other hand, Lopez said the government has allowed full operations for manufacturing, export industry, business-process outsourcing and essential services sector.
The Covid-19 Inter-Agency Task Force (IATF) recently eased the restrictions for some of the establishments in the National Capital Region (NCR) plus after maintaining its general community quarantine (GCQ) status.
DTI’s latest advisory showed that the allowable on-site operational or venue and seating capacity was increased for certain activities. This protocol is in place until July 15.
For example, indoor dine-in services in NCR, Bulacan and Rizal are allowed at 40-percent capacity while IATF capped the limit in Laguna and Cavite at 20 percent. For outdoor dine-in services 50-percent capacity is allowed in the entire bubble.
Personal care services—including beauty salons, beauty parlors, barbershops and nail spas—are allowed at 50-percent capacity in NCR, Bulacan and Rizal. Laguna and Cavite are only allowed to operate at 30 percent in the same category.
Meanwhile, Lopez also reported on Wednesday that the government has issued 7,244 Safety Seals. Business establishments with Safety Seal Certifications are allowed to operate at an additional 10 percentage points on top of the prescribed on-site operational capacity.
THE trade official also shared the impact of the pandemic-induced lockdown protocols on other industries, as well.
The footwear industry saw its sales drop by 80 percent on an annual basis, he said, noting that the non-essential sector was not able to operate during the onset of 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 prepandemic output levels again.
Citing the Shipbuilding Association of the Philippines, Lopez said the 118 local shipyards employing 30,000 workers were affected by the pandemic, as well.
“Most ship repairers stopped operations because of series of delayed importations of materials and postponed ship equipment services” he added.
Lastly, Lopez noted that the air carriers also suffered losses amid travel restrictions.