MANILA – Some 48% of companies in the Philippines have reduced the number of their employees amid the Covid-19 pandemic, as shown by the results of a recent survey conducted jointly by the World Bank, the National Economic and Development Authority, and the Department of Finance
The survey was among 74,031 firms from July 7 to 14 to assess the impact of the health crisis to businesses.
“Job loss is most significant in the education, food services and construction sectors, with greater than 60% of firms having laid off their employees,” the survey said, adding that laying off workers is lesser in financial services and health sectors, with two out of five firms in these sectors having reported reduction in the number of their workers.
Of the total surveyed firms, 40% said they temporarily suspended their operations – 20% voluntarily and 20% by government mandate. Only 1% of the firms hired new employees, even as 15% of them have closed their businesses permanently.
“Although community quarantine measures were relaxed to some extent during the time of survey, companies still reported a high degree of uncertainty. Uncertainty is an important additional channel affecting firms during the pandemic, and as the economy re-opens, this could result in a lower desire for risk-taking and additional investment,” the survey said, adding that about 45% of the firms were uncertain when to resume operations.
The poll report also said 20% of the operating firms said they expect their businesses to close between one to three months; 13% expect to shut down their operations within three to six months; and 12% consider stopping operation after six months.
The report also noted the level of uncertainty in terms of employment activities and revenues between July and September this year was also high at 33% and 28%, respectively.
According to the survey, only one out of five firms have received some kind of support from the national and local government such as cash transfers to their employees through the Pantawid Pamilyang Pilipino Program (4Ps) and social amelioration program, loan payment deferral, wage subsidies, regulatory relief, and deferral of rent, mortgage, and utilities.
Among the reasons for their failure to avail of support from government are the difficulty in applying for such support, not being aware of the programs, not receiving support after application, and ineligibility for support.
“This suggests the need for increased awareness and clarity on the guidelines and requirements of current programs as well as their timely implementation. This is particularly needed for new government loan programs offering subsidized interest rates that are in high demand,” the survey report added.