Insights on the Political Environment and Economical Environment

Jerlo Losañes
March 17, 2021

Effects of Government Restrictions

The pandemic has caused a shift in the daily lives of people in the Philippines and
businesses is no exception. Since the pandemic started a lot of government restrictions have been
imposed where only the essential establishments have permission to operate. This change
reduced the financial inflow of for profit organizations and some of these organizations are
forced to declare bankruptcy because the business cannot stay buoyant from the debts incurred in
maintaining the operations. In the past, there have been major changes to the restrictions that
eased government regulations. After that, the spike in Covid-19 cases has happened recently and
the government enable lockdown restriction to the whole Luzon island in the middle of the
month of March and a lot of groups are signing a petition to the government stating that the
lockdowns should be developed for areas with surging cases to help those that are affected from
the recession by the pandemic (Ibañez, 2021).

Economical Environment
The GDP has dropped in the fourth quarter of 2020 reported by the Philippine Statistics
Authority, this crash topped the largest record since the 1946 crash (Inquirer, 2021). Even though
the Philippines is one of the fastest growing economies in the world, the Philippines is having
difficulty in rebounding the economy (Inquirer, 2021). Groups stated that the Philippines is
getting late in restoring the economy from the neighboring South East Asian Countries (Ibañes,
2021). A factor that is affecting the growth of businesses is the finite supply of credit markets in
the Philippines which hinder the business activity and to invest in new technology (Inquirer,
2021). Because of the pandemic, a lot of business owners and workers are affected (Inquirer,
2021).

Forces that act on improving the political and economical environment

Because of the arrival of the vaccine for the virus, the vaccines are being distributed in
the Philippines (Inquirer, 2021). The Philippine government aims to vaccinate 70 percent of the
population by the end of the year (Inquirer, 2021). Once the vaccines are distributed efficiently
and quarantine protocols are decreased, it might help the economy (Inquirer, 2021). In the
economical environment there are industries that contribute to the gross domestic product of the
country in the year 2020 and some of these are the industries in the food manufacturing, grocery
stores, telecommunications/broadband service, and sin products: liquor and tobacco businesses
(Dumlao-Abadilla, 2020). Small and medium size enterprises are also forecasted to be strong
economic forces to build the country’s monetary problem because of the flexibility of business
implementations and innovative ideas that it gives to the community (Inquirer, 2021). The
vaccines might help in easing the threats of the political environment and there are businesses
that might improve the economic state of the consumers and buyers in the market.

Reference List
Dumlao-Abadilla, D. (2020, December 7). Sectors that not only survived but thrived during the
pandemic. Inquirer.
https://business.inquirer.net/313404/sectors-that-not-only-survived-but-thrived-during-the
-pandemic

Inquirer (2021, February 16). How will small businesses recover in the philippines.
https://business.inquirer.net/317553/how-will-small-businesses-recover-in-the-philippines

Ibañez, J.P. (2021, February 19). Groups warn of lost opportunities amid covid-19.
BusinessWorld.
https://www.bworldonline.com/groups-warn-of-lost-opportunities-amid-covid-19/