Ease ECQ for MSMEs

April 23, 2020

They may not be big players, but they are bigger in number and employ more.

Therefore, their continued  “suspended animation”  or cessation of  production or service delivery impacts mightily on the overall economy.

And considering their relatively smaller  asset and capitalization base, they are prone to to be hit harder by any disruption or extended freeze in operations.  

Quite thankfully, a leader of the House of Representatives has recommended the relaxing of the Luzon-wide enhanced community quarantine in selected areas to allow micro, small, and medium enterprises to resume business activities in their respective localities.

House Committee on Micro, Small and Medium Enterprise Development chair Virgilio Lacson made the proposal through a committee report recommending measures to prevent the dramatic spread of the coronavirus disease while helping keep businesses afloat amid the downturn.

An MSME is defined as any business activity or enterprise engaged in industry, agri-business and/or services that has  an asset size (less land) of up to P100 million and an employment size of less than 200 employees.

Based on these categories, it is classified as micro, small or medium  regardless of the type of business ownership (i.e., single proprietorship, cooperative, partnershipor corporation).

As of 2010, there were a total of777,687business enterprises in the country. Of this figure, MSMEs represented 99.6 percent with 774,664 establishments while large enterprises represented 0.4percent with 3,023 establishments.

Micro enterprises comprised91.6percent (709,899) of the total number of MSMEs while small and medium enterprises accounted for 8percent (61,979) and 0.4percent (2,786), respectively.

Overall, 49.7percentof MSMEs are engaged in the wholesale/retail trade and repair services with 384,746business establishments while 14.4percent (111,366) and 12.5percent(96,989) are in the manufacturing and hotels/restaurants industries, respectively.

MSMEs in real estate, renting and business activities represent 6.1percent(47,569),and those involved in other community, social and personal service activities account for 5.7percent(44,209).

Other MSMEs (11.6 percent)  are engaged in health and social work (31,547);financial intermediation (26,350);education ( 13,930);transport storage and communications(9,010);agriculture, hunting and forestry (3,829);construction (2,292);electricity, gas, and water (1,307);fishing (1,126);and mining and quarrying (394).

In terms of employment generation, MSMEs provided a total of 3,532,935 jobs2in 2010 or 62.3 percent of the total jobs generated by all types of business establishments.

Lacson said the relaxed community quarantine should be strategically implemented up to the barangay level.

He, however, stressed the need to “restart the economy”, particularly starting with the small businesses that the barangay can monitor and impose necessary restrictions to combat the virus spread.

Lacson said the quarantine and travel rules in a particular area should depend on its proximity to the disease epicenter, or the National Capital Region, or any community with a reported outbreak.

“The closer to the epicenter, the stricter the implementation, but relaxed, if farther,” he said.

In the committee report’s recommendations, the local government units, in coordination with the Department of Health, must identify all suspected and probable Covid-19 cases and create a quarantine facility for each city or municipality to isolate said persons while awaiting test results.

Covid-19 positive patients that are discharged by the hospital but still need further isolation must be quarantined in the facility until it is safe to go back to their homes.

For community transport and logistic systems of LGUs, delivery drivers and their companions need to be immediately tested (through a rapid test twice a week) and bi-monthly use of polymerase chain reaction testing to assess and control the risk of movement of individuals.

Lacson said all transport or delivery systems used must be clean and disinfected.

The government launched its small business wage subsidy program covering 3.4 million emples in small businesses affected by the ECQ.

Meanwhile, the Philippine Chamber of Commerce and Industry  has urged the government to lay clear plans on the partial resumption of businesses and economic activities.

“There are many enterprises that are planning to lay off their employees. If they cannot hear a clear instruction that they can open by May, there are more that will close their businesses,” PCCI president Benedicto Yujuico said.

Yujuico said the government can adopt some of the actions and measures of other nations such as Spain and Germany, which gradually restart economic activities without jeopardizing the health of the population.

“We have to realize that we are not going to last very long. We have to plan how we can get back to business,” he added.

Yujuico said the government may also look into allowing businesses to operate at only half of its workforce.

The quarantine period in Luzon was extended until April 30.