Nearly Half of Firms in Philippines Cut Jobs Because of COVID

A survey conducted by the World Bank, the National Economic and Development Authority, and the Department of Finance reported 48% of firms in the Philippines have cut jobs amidst the coronavirus pandemic.

The survey was conducted with 74,031 firms from July 7 to 14.

The survey said “Job loss is most significant in the education, food services, construction sectors, with greater than 60% of firms in these sectors having laid off their employees,”

1% of firms hired new employees.

40% of firms reported they temporarily suspended their operations. 20% was due government mandate and the remaining 20% stopped voluntarily.

15% reported to have closed their businesses permanently.

45% of companies are uncertain when they can resume their operations.

20% from this group said they expect their businesses to close between 1-3 months, 13% expect to shut down their operations between 3-6 months, and 12% think to stop operation after 6 months.

The survey also said only one out of five firms have received some 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.

“Even though community quarantine measures were relaxed to some extent during the time of survey, firms 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,”