Lopez fears second wave of job losses if weak business continues

Published January 23, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

Trade and Industry Secretary Ramon M. Lopez yesterday warned of a second wave of retrenchments of workers if enterprises failed to sustain the reopening of their operations because of weak sales.

Lopez said this as the Inter-Agency Task Force (IATF) approved resolution No. 95 reducing the age limit of kids allowed to go out of their homes from 15 to 10 years old. Allowing more consumers to go out would help restimulate the economy.

Trade and Industry Secretary Ramon Lopez. (ALFRED FRIAS/PRESIDENTIAL PHOTO FILE PHOTO)

The trade chief defended the easing of restriction for kids stressing this does not compromise strict health and safety protocols. Only the age restriction has been eased but the entire Metro Manila is still under general community quarantine.

Lopez said this as he warned more jobs will be lost if enterprises will cut down or closed their operation again after reopening making it would be more difficult for companies to recover from their second fall.

Lopez explained that allowing more market segments to go out of their homes could easily double or triple the sales of micro, small and medium enterprises (MSMEs), according to a survey conducted by the Department of Trade and Industry.

 He stressed that even if businesses and suppliers are allowed to reopen, they still cannot sell if other market segments are still restricted in their movements.  If the market side or the consumer side is absent because of movement restrictions, he said, consumption would be limited. This would prevent businesses to go back to their pre-COVID levels.

Higher sales would ensure a business survival, he said noting “It’s a matter of survival or closure” for MSMEs, which are mostly located in commercial establishments and malls.

Lopez stressed that family activities account for 30-50 percent of consumption, thus relaxing the age restriction to 10 years old would help businesses survive. Kids would definitely buy something on top of the parents’ purchases aside from dining in restaurants.

 Lopez also said it would take time to ease movement restrictions safely as Filipinos have already learned to follow health protocols that resulted in lower transmissions.

He noted that when the economy relaxed the restrictions in July last year, the economy improved from a high unemployment rate of 17.7 percent to 10 and further down to 8.7 percent so far. But this is still far from the 5 percent unemployment level pre-COVID with millions of Filipinos still unemployed.

 Lopez also lamented that the Philippines, which used to be the most vibrant before the COVID has remained at the bottom among all countries when it comes to GDP growth, which he attributed to the strict lockdown.

In September to December last year, he said, sales improved by up to 70 percent from only 20 percent during the lockdown. But the government has reimposed stricter measures again as the Christmas season up to the new year. As a result, sales went back again to 20 percent only of pre-COVID revenues.

If this continues, he said, it would be harder for MSMEs to get up again.

Lopez has continued to push for the reopening of other sectors like the museums where the crowd can be easily managed and safety can be easily ensured.