MSMEs start reeling from COVID-19 fallout
Exporters are piling up losses as they reel from the economic fallout from the global coronavirus pandemic.
A survey conducted by the Philippine Exporters Confederation Inc. (Philexport) showed that export firms needed financial assistance and tax breaks after the global health crisis disrupted their perations.
A total of 36 respondents answered the survey, representing 13 sectors such as logistics, electronics, food, garments and textiles as well as footwear. All them are micro, small and medium-sized enterprises (MSMEs), Philexport said.
The slowdown in market demand was their biggest problem, followed by higher costs of raw materials and intermediate goods as well as the increase in logistics cost.
Three respondents said they have incurred losses of $35,000, $50,000 and $500,000, respectively, due to the impact of the COVID-19 crisis on their operations. Philexport did not identify the companies.
More than 70 percent of the MSME exporters polled said that they traded with China and other severely affected countries, including the United States, Japan and Singapore, and were thus experiencing business disruptions with the outbreak of COVID-19.
A big number of respondents have reported late shipments, canceled export and import orders as well as loss of buyers and suppliers as the virus continued to spread across the world, prompting travel restrictions in many countries.
Other issues raised included newfound difficulties in obtaining loans, canceled credit lines, scrapped trade fairs, travel difficulties, liquidity problems and excess manpower, and delays in remittance of payments.
The most recommended intervention highlighted in the survey was financial assistance, Philexport said. The respondents were asking for financial support for affected companies, including refund for canceled trade exhibits, tax breaks and loan assistance, among others.
Other recommendations were for the Duterte administration to strengthen e-commerce, subsidize highly appreciated local and international shows, expedite release of shipments at the ports, and look for other buyers aside from China.
In addition, the respondents requested a review of the implementation of the red lane/x-ray requirement for exports.
“The implementation was too sudden without consulting affected parties, causing us to pay for unnecessary fees,” commented one respondent. INQ
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