DTI survey shows only 6% of small businesses have yet to reopen

About 6 percent of small businesses have yet to reopen after closing at the height of the quarantine period amid the outbreak of coronavirus disease 2019, according to a survey by the Department of Trade and Industry.

Trade Secretary Ramon Lopez said the agency conducted the survey among 2,000 micro, small and medium enterprises during three quarantine periods.

“It showed that 38 percent companies were closed and about 50 percent were partially operating during the height of the ECQ [enhanced community quarantine] last April to May. This went down to 11 percent in June to July, and to 6 percent in August to September as we were reopening the economy,” Lopez told members of the Philippine Franchise Association during the opening of Franchise Asia Philippines 2020 on Monday.

He said the country’s unemployment rate steadily decreased from the worst rate of 17.7 percent in April to 10 percent in July. The DTI expects the unemployment rate to revert the pre-COVID level of 5.1 percent before the end of the year.

Lopez assured participants that Philippine manufacturing was slowly getting back to where it used to be. He said the manufacturing index climbed back closer to the benchmark index of 50, reaching 49.7 in June from its record-low of 31.6 in April.

“The Philippines has always been posting 50 index. Above 50 suggests an increase in manufacturing activities and below 50 suggests a contraction. So we are about to surpass the 50 index. This reflected a recovery in our manufacturing indices as we eased down the community quarantine in several regions across the country. Furthermore, our output index has been climbing from 10.2 last April to 51.1 last June,” Lopez said.

“Meanwhile, our exports that declined by 49 percent in April, has now recovered to just -9 percent in July this year. We hope to recover to positive growth territory by yearend, in the same way that we have been posting positive growth rates in 2019, as well as in January and February before the lockdown this year. We are one of the few countries that have been posting positive growth last year and early this year prior to the pandemic,” he said.

Lopez assured franchises that the country would eventually rely less on determining a level of community quarantine and more on adopting specific measures such as a more granular lockdown; intensify trace, isolate, test and treat which means “to isolate the positives and allow those who are healthy to go back to work and restart the economy, which would bring back jobs and income opportunities.”

He said it was the only way to restore consumer confidence and allow the other age segments to go out and eventually, move back curfew to the point of eliminating it altogether.

“The Department of Trade and Industry has always believed in franchising as a tried and tested model for entrepreneurship, especially during periods of uncertainty. More importantly, franchisors serve as big brothers and sisters to our entrepreneurs, and they’ve been a big help in DTI’s MSME development programs like our mentorship initiatives,” he said.