Restoring consumer confidence critical, says Concepcion

Published March 30, 2020, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Bringing back consumer confidence is the other critical issue that businesses, especially the micro, small and medium enterprises (MSMEs), are facing as they try to get back to work once the month-long lockdown is over.

Joey Concepcion
Jose Ma. A. Concepcion III.

This was pointed out by Jose Ma. A. Concepcion III, presidential adviser for entrepreneurship, as he called for mass testing against the pandemic-causing COVID-19 disease to help improve confidence among consumers.

“The other issue is confidence of the consumer that it is safe to go out. Actually, at this time people are aware of the gravity that they will take precaution and even not go out this will make MSME especially in the retail side have a more challenging time. Testing brings confidence,” he urged.

“We will have to build confidence back again. The moment clarity is there, then confidence comes back and that is why I am a firm advocate of getting more testing done. You’ve seen countries that were able to challenge the virus by getting fast results and clarity. I urge Secretary Duque to consider the testing kits that are faster. In our case, since many of us have distributors that lend to the MSMEs, definitely, we are extending that because there’s no way that they can pay. We are going to plan it so everybody will be able to ride this crisis,” Concepcion told the Manila Bulletin.

In fact, the founder of Go Negosyo said that the recovery of the MSMEs from the impact of the health crisis will largely depend on their business model, but in general they cannot recoup their losses this year.

“Depending on the business model of the MSME but in general no,” said Concepcion when asked if MSMEs can recover this year from the adverse impact of the month-long lockdown due to COVID-19 on their businesses.

Initial impact assessment on the four week-lockdown on MSMEs was not good, Concepcion said, but would be manageable with the additional working capital that the government is extending through the “Bayanihan Heal as One” law.

But Concepcion stressed that it would be harder if the quarantine is extended because that would mean paying interest rate on loans and letting people go.

“Right now, if they are in retail we don’t know if they will be able to operate their stores,” he added.
Concepcion said that enterprises need to refinance their loss for one-month stoppage. “If this goes longer the bigger the question will they be able to pay the loan back. Banks might not lend them if they don’t see a chance of collecting,” he added.

That is why, he stressed the importance of making this one-month Enhanced Community Quarantine (ECQ) becomes successful.

“The more the business stops, you can’t keep paying your workers because you will bleed. You have to stop to bleed. So, they’ve stopped the rental, they’ve stopped paying salaries. Of course, maybe this month everybody is covered with their emergency leave, sick leave, vacation leave but some sectors like the contractuals are exposed. I don’t think they have one month, maybe they two weeks, some are lucky to have one month, so this is the sector that was challenged. Basically, the working class, and/or the micro, and small that are at the bottom of the pyramid. The medium enterprises are still doing much better, but everybody is not spared, from large corporations to medium sized corporations, everybody is affected,” he added.

Concepcion came out with a paid-ad over the weekend, urging Filipinos to cooperate with what the government is doing because the economy cannot afford an extended lockdown.

“It is very important for us that the last two weeks of the lockdown should be really enforced well. If we don’t cooperate, lockdown might happen again. We need this to help our frontliners– doctors, and nurses who are manning the hospitals. This will also help our MSMEs and the Filipino working-class, get back their jobs again thus relieving the economy,” he said.