Majority of small businesses in the country ran out of funds during the pandemic, unable to continue their operations, data from the Bangko Sentral ng Pilipinas (BSP) showed.
In a speaking engagement on Friday, BSP Governor Benjamin Diokno said based on their survey most micro, small and medium enterprises (MSMEs) in the country lacked funds immediately after the outbreak of the virus in the country.
Diokno reported that micro enterprises were most affected, with only 14.8 percent indicating having enough savings, liquid assets and other contingency budget to maintain their businesses.
He said 37.8 percent of micro firms indicated that their cash or fund ran out after the first month of the lockdown while 43.8 percent have already no cash and savings upon the implementation of restrictions.
For small enterprises, 19 percent indicated having enough funding to continue their operations while 53.1 percent said their finances bottomed out after the first month of the lockdown and 23.2 percent said they immediately have no cash and savings after the lockdowns.
Meanwhile, medium enterprises had it slightly better as 28.7 percent of the respondents have enough to cover for their operations. However, 61.4 percent said cash ran out in a month after the lockdown while 3.9 percent said they already have no cash and savings after the implementation of restrictions.
The BSP has deployed a wide range of policies and regulatory and relief measures to support them. This includes the innovative measure to allow loans to MSMEs as alternative compliance with BSP’s reserve requirement.
As of the week of June 17, the banking system allocated an average of P183.9 billion loans for MSMEs as alternative compliance with the reserve requirements.
This level is significantly higher than the P8.7 billion average MSME loans that were reported for the week ending April 30 last year.