IMPACT OF COVID-19 ON BUSINESS* - CHRIST THE KING COLLEGE, INC.

, Calbayog City
(Financial Aspect)

In Partial Fulfilment of the Course Requirements

for Financial Management
Master in Business Administration
Northwest Samar State University
Calbayog City

Submitted to:

DR. MARIA A. ORAYA

Professor

Submitted by:

HERBERT M. FABILLAR
Student

May 25, 2020

Date
Situation

Assume that you are the financial manager of a firm (state your chosen/assumed firm). Discuss the
financial implications of COVID 19 and the remedies/strategies you implement in order to sustain
the financial health of your firm.

Firm

Christ the King College, Inc. Calbayog City

Introduction

COVID-19 has affected all industries and organizations are seeing the impact it has on their
business.*** This is true to all countries since the virus alert was heightened to “pandemic” which
means it is affecting worldwide. The world is facing the burden of uncertainty, and much more to
developing countries like the Philippines. Firms like Christ the King College, Inc. of Calbayog City is
struggling to abruptly consider options to continue its operations the same with the (previous)
normal times while the usual course of education is at a halt. The major consideration is financial –
trying and at the same time obliged to provide salaries to its employees despite uncertainty in the
major cash inflow – school fees.

Financial Implications of COVID-19***

The Negative Impacts Are Short Term***

It’s undeniable that coronavirus has negatively impacted businesses all over the
world and our survey results solidify it as such with an overwhelming 93% of
respondents noting that it will negatively impact their business. However, what
stands out from the survey is the number of businesses that believe the negative
impact of COVID-19 will be short-term, instead of long-term.***

Inarguably, the negative impact to the college is only short-term since as of the moment, the
major change is on how the services will be provided - the need for the service is still there. Financial
projections, of course somehow became useless with unforeseen event which is beyond the
somehow “usual” or known fortuitous events. With this, huge amount of cash is now seen to
outflow for changes in the delivery of services.

Revenue Takes A Fall In 2020***

Companies and businesses are taking major hits at the beginning of 2020 due to the
rapid spread of coronavirus and the results of our survey show that 86% are
expecting revenue to take significant falls due to the direct impact of the outbreak.
From that 86%, 33% are predicting a revenue fall of more than 15%, 21% believe
their business’ revenue will fall within 10%-15%, while another 33% expects their
revenue to fall 10% or less. The significant drop in revenue will have a trickle-down
effect on the economy as companies are struggling to adjust their business
strategies in preparation for an economic downturn.***
 For Christ the King College, having a Fiscal Period Accounting ending May 31 did not
experience losses in the 1 st quarter of year 2020 since the School Year 2019-2020 is about to end
when lockdowns in the country were ordered. Somehow, the school was even able to save some
amount foregoing some year-end events such as graduations, balls (which costs a lot). The painful
part was when “summer classes” could not be offered – caught unprepared, the same with other
colleges in the country. Summer Class tuition fees as part of cash inflow projections is now out-of-
the-scene, and is obliged to provide salaries to employees, financial difficulty is now starting to
emerge. Revenues surely will fall compared to previous years.

1. Manila, Philippines – Private schools have asked the government to help

teachers affected by the coronavirus lockdown throughout the country.

A total of 409,757 teachers, faculty, and school personnel in private educational

institutions nationwide are affected by the enhanced community quarantine
imposed in Luzon and other parts of the country, according to the Coordinating
Council of Private Educational Associations (CoCoPEA).*****

2. Despite having their own manual of operations, Briones said private schools
should also let DepEd know what is happening in their respective schools. “Now,
they’re informing us about their problems and about their issues,”…

We see the Bayanihan law which will be a source [of assistance for private
school teachers],” Briones explained. She also noted that DepEd has no policy
allowing private schools to collect tuition and other fees in advance so they can
provide for the needs of their personnel since “they’re supposed to have the
capacity to be able to take care of the salaries of their teachers.

After this date, many private schools would resort to extreme measures to avoid
closure such as placing school personnel on floating status without pay, non-
renewal of contracts, and even retrenchment.” [COCOPEA Managing Director
Atty. Joseph Noel Estrada].**

Businesses Will Bounce Back***

Despite the current situation, our respondents are bullish in their businesses’ ability to
bounce back and have their operations return to normal, once government restrictions have
been lifted. Only 12% of our respondents believe that their operations will take 6 months to
over-a-year to return to optimal levels. This is a huge gap to the 88% of surveyed leaders
who expect to have their businesses back to operational levels in less than 6 months.

From that 88%, 32% are expected to be operational in less than a month while another 32%
expects daily operations to return to normal in 2-3 months. Lastly, 24% hopes to have their
organization back to normal in 4-6 months.***

The college is quite hopeful that operations will be seen as normal despite changes in the
delivery of services. Knowing that the government requires the continuation of schools and embrace
new normal, the administration look forward to have the same number of enrollees. But this
projection is quite conservative with expectations that due to travel restrictions, some parents might
decide to enroll their children in Calbayog City to think that courses will also be done online, and for
them (also) to be able to save in this time of crisis (if they will be enrolled in costly schools).

Remedies/Strategies to Sustain the Financial Health***

(To be proposed and consulted with the administration – as a Financial Manager)

Shifting Towards Remote Work***

1. With government restrictions in place and the shutdown of non-essential

services, many companies and businesses have shifted towards remote working
to ensure that the coronavirus doesn’t spread within their organization and
continue operations as usual.

Based on the results of our Executive Trend Survey, 73% of executives that
responded have decided to shift their organization into fully-remote working
environments to continue business operations. In addition to remote working,
67% have also decided to postpone business events/activities to reduce social
contact.

Still, many organizations are unprepared for remote working and are too
focused on finding collaboration tools instead of training people on how to work
from home and encourage a continued winning momentum.***

2. ADMU is focusing on creating bridging programs that would cover any learning
gaps caused by the ECQ. The university's faculty and administrative members
are also preparing for a more flexible learning arrangement if the situation
aggravates and continues to extend until the next school year.

PLM is busy revisiting their plans for the next school year and adapting it to the
current situation. They are preparing to revamp their facilities so that it can
accommodate social distancing guidelines and equipped with multimedia and
connectivity tools. They are also looking at rearranging their class hours to allow
for shifting class schedules in the next school year. Apart from that, they are
reviewing their curriculum and redesigning it to be flexible, modular, and
considerate of the learning gaps left by the shortened semester.*

Going online to deliver services is the best option. Maximizing the use of free Learning
Management Systems such as Edmodo, Schoology, etc. The school will be able to save a lot, and
provide the quality services as usual.

Another is to activate (and maintain) the college’s Management Information System (MIS)
and make operational its website to cater needs such as information dissemination and more
importantly collect school fees. Official websites are the only trusted avenue for clients to contract
with. Also, collaboration with banks and other collection institutions for ease of payments for clients.

Facebook and other several social media are also of good use (though even before the
pandemic). Maximize the use of it, assign a department to deal with customer needs – expenses are
at a very minimum in this aspect.
 3. May 22, 2020 — As we prepare our programs in response to the ‘new normal’,
we appreciate the insights of members of the Senate on further improving our
Basic Education Learning Continuity Plan (BE-LCP). As a body that understands
the need for an integrated policy in this time of crisis, our Senate aided in fine
tuning our policy priorities relative to the concerns surrounding the public health
situation.

The Department of Education will ensure the health and safety of our learners,
teachers, as well as our parents and communities, while we adjust our initiatives
and formulate solutions so that basic education will still be within the reach of
our people amidst COVID-19. We will continue to work closely with our
legislators on this matter in our effort to produce a comprehensive and feasible
LCP.

We encourage more stakeholders to collaborate with us in improving the LCP.

We understand that there is no one-size-fits-all fix for this extraordinary time,
but our united effort to confront our challenges will go a long way in identifying
solutions that work.**

School Fees

On one hand, rate of school fees (tuition and miscellaneous) should be maintained, much
more that the government is keen to manipulations, cartels, and other ways to take advantage of
the community (much more) in crisis. On the other hand, a well-studied proposal to even lower the
“miscellaneous fees”, practically removing or minimizing the list such as for utilities and school
activities/gatherings where it is impossible to conduct considering pandemic restrictions – making it
(the amount) attractive to clients.

Webinars

Initiate and/or require personnel to attend webinars which is a trend and available today
considering the situation. This is a win-win situation for both the college and its personnel most
especially the instructors. Quality services will be offered to clients despite the unusual delivery of
instruction.

Webinars of today mostly discuss ways, actions and provide options on how to combat the
crisis in almost all industries affected. Also, there are webinars especially designed for
“administrators or top management.”

Contingency Fund

What other colleges today do not have is a contingency fund or shall I say there is one but
the amount is not seen to be used for this kind of worldwide health issue. Recovery from the crisis is
vague for most of the industries most especially for the education sector which is seen to operate
last. Establishment of a substantial contingency fund where the amount is quite bigger than usual.
Planned physical improvements and purchase of equipment that are seen impractical should be
cancelled.
Investment

The college should capitalize in several investment options seen appropriate and feasible.
Obviously, passive income will help the organization in the future. Furthermore, personnel growth
with regard to financial education or literacy will also be considered as part of personal and financial
development.

References

*https://www.cnn.ph/life/culture/2020/5/5/mass-promotion-covid19.html. Accessed May 24, 2020.

**https://www.deped.gov.ph/2020/05/22/official-statement-3/. Accessed May 24, 2020.

***https://managementevents.com/news/the-impact-of-covid-19-on-businesses/. Accessed May

25, 2020.

****https://news.mb.com.ph/2020/05/02/deped-seeks-aid-for-private-school-teachers-affected-by-
covid-19-crisis/. Accessed May 24, 2020.

*****https://www.rappler.com/nation/259356-private-schools-ask-government-assistance-
coronavirus-pandemic. Accessed May 24, 2020.