The prolonged community quarantine imposed by the government to contain the spread of Covid-19 has adversely affected micro, small and medium enterprises (MSMEs) in the Philippines. According to the Philippine Statistics Authority, some 4.6 million Filipinos were out of work as of July, severely dampening household consumption. The increase in transportation costs because of the quarantines has raised MSMEs’ overall business expenses. Low revenues and high expenses have put extreme pressure on their cashflow.
Add to these is the low adoption of technology, such as using social media and other online channels for business communication, which makes it difficult for MSMEs to adapt to the digital way of doing business. Supplier and customer payment transactions continue to be in cash, which increase the risk of coronavirus transmission.