Disaster preparedness of SMEs

The eruption of Taal Volcano has displaced thousands of Filipinos living in its shadow.

In anticipation of its expected catastrophic explosion, the island on which it stands has been declared a “no man’s land” by President Duterte.

For health and safety reasons, residents of some outlying towns have been prohibited from returning to their homes without the prior approval of the authorities.

As a consequence of the calamity, many of the businesses in the affected areas have, depending on the extent of the damage they suffered, either shut down or temporarily suspended operations.

The prospects of unemployment and serious financial problems loom large for their employees and the people who depend on them for their livelihood.

For businesses with ties to conglomerates or have substantial revenues, Taal’s eruption may be considered a “blip” in their operations that would simply require a review of business plans, reassignment of employees and reallocation of resources.

It would be “business as usual” after Taal has spewed its last pebble and settled down again.

The majority of the businesses affected by the eruption, however, are not similarly situated. They are mostly small and medium-sized enterprises (SMEs) that are of the “mom-and-pop” type or marginally capitalized.

According to official reports, in the Philippines, SMEs constitute 90 percent of the business sector and employ 65 percent of the labor force.

Give or take a few percentage points, the same numbers would apply to the cities and towns that lie within Taal’s 14-kilometer-radius danger zone. Unless the government comes up with an effective assistance program, these SMEs may, together with the affected residents, have to bear the brunt of nature’s latest fury in our country.

Sadly, disaster preparedness is not in the “to-do” list of most SMEs. That kind of contingency planning is akin to life insurance—something majority of Filipinos do not want to talk about because preparations for death (although inevitable) are considered taboo.

As if talking about death and planning for it ahead of time would make it happen.

Despite the fact that the Philippines is in the Pacific Ring of Fire and therefore prone to deadly natural calamities, preparations for earthquakes, typhoons, drought, floods and other destructive phenomenon are the exception rather than the rule.SME owners prefer not to think about them and instead hope and pray that God, in His goodness, would not allow them to happen, at least in their lifetime.

Getting insurance coverage is out of the question. The local insurance companies are not known for expeditious payment of insurance claims.

The default mode for their adjusters appears to be to find every loophole possible in the insurance policy to justify nonpayment or reduction of payments.So why bother to get insurance coverage for fortuitous events when availing of their benefits later would be like going through the eye of a needle? Aside from that mind-set, the principal obstacle to disaster preparedness by SMEs is lack of funds.

Thinly capitalized and often unable to secure additional funding from lending institutions due to strict credit standards, setting aside funds for disaster preparedness is not considered a priority.

Thus, when nature decides to display its destructive capabilities, those businesses and their employees find themselves helpless and destitute.

Nongovernmental organizations and private companies can only do so much in easing the adverse effects of Taal’s eruption on businesses in the affected areas.

At the end of the day, the burden of saving those businesses will rest with the government. INQ

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