Microbusinesses keep the faith
The economic hardships caused by the COVID-19 pandemic are forcing many Filipinos to find creative ways to survive and put food on the table. With very little savings to convert into capital, many have turned to microbusinesses in hopes of tiding themselves and their families over in these lean times.
The findings of a recent global entrepreneurship survey by a US-based internet domain registrar showed that a third of the Filipinos surveyed—70 percent of them millennials aged 24-39 — decided to put up new microbusinesses in the midst of the economic difficulties spawned by the pandemic. And they brought a palpable sense of optimism to their ventures; nine out of 10 respondents said they expected their businesses to grow by a quarter in the coming three to five years, and four out of five were hopeful of recovering from the pandemic just within a year. “The Filipino’s ability to adapt in times of crisis is largely seen among these microbusiness owners,” said the GoDaddy 2020 Global Entrepreneurship Survey released on Aug. 12.
It was also microbusinesses that were overwhelmingly affected by the COVID-19 lockdowns, according to the report: “Filipino microbusinesses felt the brunt of the pandemic with 81 percent of Pinoys surveyed reporting a reduction in revenues. Respondents also had to deal with temporary closures brought by the various levels of quarantines imposed since March this year.”
Still, the Filipino sense of hospitality was not lost even with the economic crisis. One in three respondents indicated that they used their businesses to extend help to those in need. The survey noted that 70 percent believed it was important that their enterprises have a positive impact on their communities. This was the highest rating among all the 5,265 entrepreneurs and microbusiness owners surveyed in Australia, Canada, Germany, India, Mexico, Spain, Turkey, United Kingdom, and the United States.
With physical distancing and the lockdowns imposed to stem the spread of COVID-19, Filipino microentrepreneurs saw the power of the internet in pushing their businesses. Online marketing and selling — and digital payment mechanisms — proved to be the saving grace for microentrepreneurs during these difficult times. “The current situation has fast-tracked digitalization for a lot of business owners, and enabled them to continue to reach customers online,” said GoDaddy Asia marketing director Tina Shieh, as quoted in a Business Mirror report.
These findings should prod the government and the private sector to work even more closely together to provide a conducive operating environment for the millions of Filipino microentrepreneurs who have turned to selling everything, from homemade food stuff to backyard-produced products, to survive, and by doing so are valiantly keeping the country’s economic engine going.
For one, the cost of internet services needs to go down. If the third telco player that was recently awarded a franchise lives up to its commitments, its entry into the field dominated by the duopoly of Globe Telecom and PLDT Inc. will help spur this development. However, the pandemic has delayed the launch of the third telco firm’s services.
The government plans to speed up the building of cell towers by freezing the need to secure permits from local government units; cutting red tape and streamlining convoluted bureaucratic requirements will certainly help improve the services of existing telcos. Both Globe and PLDT have blamed the difficulty of obtaining dozens of permits from LGUs just to put up cell towers for their big backlog. More towers built would significantly improve cellular coverage across the country, and lend microentrepreneurs the technological boost to expand their online ventures. But the telcos can be of further help by providing concessions to microbusinesses in terms of lower-priced subscription plans.
Second, financial institutions need to assist microentrepreneurs in enabling efficient and affordable payment schemes. For example, digital transactions or online fund transfers are so far free of the usual fees from banks until the end of 2020, courtesy of the Bangko Sentral ng Pilipinas and the Bankers Association of the Philippines. However, banks will begin charging transaction fees by January 2021.
Finally, the government would do well to go easy for now on its plan to run after online businesses in its drive to generate taxes. While an old law issued by the previous administration was responsible for the requirement for all online sellers to register with the Bureau of Internal Revenue, the government can simply delay its implementation. Given the painful economic squeeze, small businesses that are keeping the faith by generating productivity and providing income should be spared the usual bureaucratic burdens that have discouraged even the bigger firms.
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