I work from home and do not go out much often but when I do go out I happen to pass by business establishments and I am so saddened by how these establishments are empty especially those greatly affected such as the gyms, restaurants and bars, beauty parlors and even “pasalubong centers” with no tourists coming in and people limited to travel outside of their places, these “pasalubong centers” are most of the time empty with customers.

Last year, we were more optimistic and even at the start of this year, but with the many variants threatening the world, it seems that the proverbial “ light at the end of the tunnel” became a small flicker if not disappeared altogether with no end in sight to this long tunnel of suffering in this pandemic.

I cannot help but research how other countries are helping their businesses cope up with the adverse effects of this pandemic. Of course, we cannot compare our country with the richer countries which have bigger funds available to them to help these businesses. But with other countries beginning to recover while our country have to cut our GDP growth forecast for the end of the year from 6%-7% to 4%-5%, (bloomberg.com 8.18.21 “Philippines Cuts GDP Growth"…) – and according to the same article places the Philippines among the “regions laggards”, I cannot help but take a look on how we can “benchmark” with other countries given our limited resources, to help especially our small businesses.

In a report in oecd.org dated May 4, 2020, as early in 2020 when the pandemic first started, it shows research on different ASEAN countries' responses to help the SMEs especially the most affected sectors such as tourism, restaurants, hotels, spas, beauty parlors, etc. Access to financing for SMEs has been facilitated in many countries through low-interest loans (e.g. Cambodia, Malaysia, and Myanmar), deferment and relief on loan repayment (e.g. Malaysia, Thailand), adjustments in prudential regulation to allow for additional loans to SMEs, government guarantees on loans (e.g. Malaysia), and more relaxed credit assessments (e.g. Indonesia) and other prudential regulatory adjustments, backed up by special funds to support SMEs.


Salary subsidies like in the Philippines were also provided (e.g. Brunei Darussalam, Thailand) but not facilitation towards rents (e.g. Malaysia). In case of workers still had to be laid-off or forced to work shorter hours, assistance such as through social welfare, food assistance (e.g. Indonesia) was provided for them, including in the informal sector (Figure 2). There are also countries (e.g. Brunei Darussalam, Malaysia, and Singapore) that support SMEs by supporting adaptation to electronic commerce and digitalization in general since this pandemic has a considerable impact on how people work and consume.

The Philippines may have provided support to workers of SMEs but these cash subsidies are just temporary. What we need is more support to SMEs to avoid the retrenchment of workers so that more people will have work to support themselves. Loan guarantees from the government to SMEs which were affected hard by Covid19 brought about by lockdowns and strict controls will go a long way to prevent closures of these establishments. 

Loan guarantees or financial support in the form of non-repayable grants and subsidies such as if the big part or all of the loans is used for salaries and rent – and there is no longer a need for the business to pay back these loan guarantees, can help greatly the sad plight especially of affected SMEs. However, our country may not be able to afford this, but loans with lower interest rates such as at 2% per annum with no collateral at a maximum of 2MM can go a long way to help our SMEs. A friend who is an SME entrepreneur was trying to look for one for her small manufacturing business but cannot find one. If you are reading this, and you know of one bank or any government financial entity in the Philippines, please let us know to help our SME friends.

Small and medium-sized enterprises (SMEs) is a significant contributor to the growth of the economy making up more than 96% of all Asian businesses, providing two out of three private-sector jobs on the continent (The Role of SMEs in Asia and Their Difficulties in Accessing Finance - www.adb.org)

It is important, therefore, that for economies to survive and grow, that governments should have fully functioning and effective measures to help the SMEs especially in this time of crisis more so in countries with strict containment measures.

We are facing a big risk when a lower proportion of SMEs receives financial support from the government and at the same time is faced with strict lockdown measures – the risk that this will ultimately result in a higher number of these businesses going bankrupt. 

Unless no new policies are considered to prevent the closure of these viable businesses and proper steps take to contain the virus, we will continue to be one of the laggard economies in this pandemic crisis in the ASEAN region if not the only laggard economy in the region by the end of 2021.



(Wilma Miranda is the Managing Partner of Inventor, Miranda & Associates, CPAs, BOD Member of KPS Outsourcing, Inc., and Chair of the FINEX Media Affairs Committee. The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of these institutions) 
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