MSMEs feeling the COVID-19 pinch

Late shipments, cancelled export and import orders as well as loss of buyers and suppliers, lack of capital are just few of the concerns raised by Micro small and medium enterprises (MSMEs) as the coronavirus (COVID-19) pandemic continues to destabilize global trade and economy.

In a survey conducted by Philexport, majority or 70 percent of MSME-exporters expressed apprehensions on the effect of their respective businesses, given the difficulties they are experiencing as the effect of global pandemic.

Thus, the MSMEs are calling the government for intervention, primarily financial assistance and tax breaks to offset their losses and enable business continuity.

The MSME exporters polled shared that they trade with China and other severely affected countries including the US, Japan, and Singapore, and are thus experiencing business disruptions with the outbreak of COVID-19.

Thirty-six respondents representing 13 sectors made the appeal in a survey conducted this month among members by the export sector on the impact of the coronavirus outbreak on business operations.

Other issues raised include newfound difficulties in getting loans (financing squeeze), cancelled loans, cancelled trade fairs, travel difficulties, liquidity and excess manpower, and delays in remittance.

Slowdown in market demand is the biggest problem identified by the respondents, followed by higher costs of raw materials and intermediate goods and increase in logistics cost.

Three respondents said they have incurred losses of $35,000, $50,000, and $500,000, respectively, due to the impact of the COVID-19 crisis.

With border shutdowns and travel restrictions due to the novel coronavirus, majority of those surveyed said they are currently turning to the domestic market to temper their losses, and are urging the government to strengthen the local market to allow enterprises to continue operating.