The current lockdown being implemented by the Philippine government has to succeed because a second one would cause bigger problems for micro, small and medium enterprises (MSMEs), according to Secretary Joey Concepcion, presidential adviser for entrepreneurship.
Concepcion in a radio interview with DZBB on March 26 said that while MSMEs are being given temporary relief from financial obligations, they are not getting funding from banks.
The initial Metro Manila community quarantine started March 15, and was followed by the Luzon-wide enhanced community quarantine, which started March 17 and is scheduled to expire on April 13.
“Karamihan ng mga MSMEs are not being asked to pay but… they are not getting additional funding from mga bangko-mga MFIs [microfinance institutions], yung mga rural banks, yung mga thrift banks,” Concepcion said in a mix of English and Filipino.
He attributed this to “fear of survival.” “They [banks] want to be sure yung mga loan… people will not default so automatically yung problema ngayon is the supply of money and hopefully that will be addressed.”
Concepcion explained that banks are also getting hit by the health crisis. “Dapat alagaan din natin ang bangko because the moment the confidence starts to wane out baka may mag-collapse diyan na bangko so that’s what we don’t want to happen.”
“Yung mga bangko naman because of fear they are pulling back. They’re not lending and they’re doing selective lending so talagang matatamaan itong mga MSMEs.”
Concepcion said the one-month lockdown is like a “reset” and it has to succeed through people’s cooperation. “Because if it fails then the country cannot afford a second lockdown. We have to prevent a second lockdown from happening.”
He said that this Sunday (March 29) would mark the end of the two weeks of lockdown and many cases would be seen but “before the fourth week ends, siguro things should be stabilized.”
“If we continue with the lockdown, of course mas malaking problema para sa mga MSMEs natin kasi yung working capital nila ubos na in this first round, and yung funding galing sa mga bangko ay wala pa diyan kasi nahihirapan din ang bangko mga-lend kasi baka lumaki rin exposure nila.”
He stressed the need to sustain the economy. “This first lockdown is fine. We will survive it. But if we have a second lockdown that will be very challenging.”
The executive urged everyone to cooperate and stay home for the lockdown to work.
Concepcion also acknowledged the impact of the pandemic and the lockdowns across the world on MSMEs and exporters, but said the fall in overseas demand is something beyond anyone’s control as nearly all sectors are suffering from the impact of the virus contagion.
He stressed, however, the importance of the immediate resumption of manufacturing.
“Once we are over this lockdown, the most important thing is we have to go back to manufacturing. We have to run our plants because this is what will give the people jobs. We cannot lockdown again because then nobody will have jobs. The government cannot continue giving money, giving food because we will run out of that… we don’t have those resources.”
He continued: “The only way to get out of this is, eventually manufacturing has to come back.”
Finally, Concepcion mentioned the government’s role in the country’s recovery. The government must immediately come in to help the people who have lost their jobs, then provide the crucial stimulus package, he said.
“That stimulus package is going to be important to revive, to reenergize the business community. Itong maliit na negosyante yan ang pinakaimportante kasi dito they connect all the way down to the poor. The bulk of our MSMEs-99% are micro and small.”