The local economy will be bleak in the next three to six months because of the COVID-19 pandemic.
This is one of the findings of an online survey conducted by the Iloilo Economic Development Foundation, Inc. (ILEDF), in cooperation with the Iloilo City Government, Iloilo City business sector, and Global Shapers Iloilo.
More than 200 micro, small, medium, and large business owners responded. 34 percent of the respondents reported an asset size of Php3 million to Php15 million and 29 percent have an asset size of more than Php100 million.
What were the key findings of the survey?
While the general economy is deteriorating in the next 3 to 6 months as indicated by almost all of the respondents, 89.4% of the respondents believed that the Iloilo economy will be much stronger, although they perceived decreasing investments in the next 12 months.
Businesses perceived that sales and revenues and subsequent profits will significantly decrease in the next 3 months.
The critical concerns include declining consumer demand, cost of lease and rentals, wages, logistics and supply of raw materials and information, communication, and technology infrastructure.
Climate condition is also seen as a moderate concern for businesses. Other constraints in moderate levels include bank interest, compliance with workplace protocols and safety regulation imposed by the government.
The respondents proposed some measures to address their concerns.
-Avail of low interest rates on loans from banks and financial institutions (48.9 percent)
-Obtain tax discounts and credits (51.1 percent)
-Reduction of manpower (38.3 percent)
-78.7 percent of respondents also think that government should provide assistance in the form of market linkages and business continuity planning.
-Other measures are reduced work hours (78.7 percent), temporary lay-off (36.7%)
-More than 50 percent of the respondents believed that technology and digital platforms are important to connect suppliers, customers and financiers.
TAKEWAYS
The survey also indicated that no matter how long it takes for the economy to recover, “things are not going to look like they once did before COVID-19 pandemic.”
The general business and investment landscape will look different, as some businesses are adapting new measures to address constraints brought about by COVID-19 pandemic.
Businesses are also moving slowly to cut costs and labor force to weather the first throes of the pandemic.
With the government’s announcement of “reopening” the local economy, buoying up consumer confidence would take a multi-pronged government-private sector approach focusing on improving supply links, pumping financial assistance and grants will be critical to driving sales and revenue good enough to deal with a potential wave of COVID-19 cases.
While many businesses continue to cut costs, the general expectation of poor business conditions and decreasing expectations of investments in the next 3-6 months may signal a hint of decreased optimism about business activities in terms of the expected sales/revenues, profitability and capital expenditures.
Putting high importance on technology and digital platforms to connect to customers, suppliers and financiers will define the prospects of the expectation of a stronger economy in the next 12 months.
