Guimbal National High school

SENIOR HIGH SCHOOL

Rizal St, Guimbal, Iloilo

Profitability of Small Medium Enterprises in Miagao during Pandemic

A Research Proposal

Guimbal National High School

Rizal St., Guimbal, Iloilo

Practical Research 2

By:
Kharyss Ghayle Ashne Becera
Shine Cagud
Elena Garferio
Chrisylle Joy Mondejar
Lhean Gae Nuñal

12 ABM LEIBNIZ

March, 2021
 Guimbal National High school
SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

TABLE OF CONTENTS

Page

TITLE PAGE i

APPROVAL SHEET ii

ACKNOWLEDGEMENT iii

ABSTRACT v

TABLE OF CONTENTS vi

LIST OF TABLES viii

LIST OF FIGURES ix

Chapter

1 INTRODUCTION
Background of the Study 1
Theoretical Framework 2
Conceptual Framework 3

Statement of the Problem 4

Hypothesis 4
Scope and Delimitation of the Study 4
Limitation of the Study 5

Significance of the Study 5

Definition of Terms 6

3 METHODOLOGY
Research Method
Respondents
Instrumentation
Data Gathering Procedures
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

Data Processing Techniques

CHAPTER 1
INTRODUCTION
Background of the Study

The outbreak of coronavirus disease-20191 (COVID-19) has severely affected national and
global economies. Various enterprises are facing different issues with a certain degree of losses.
Particularly, enterprises are facing a variety of problems such as a decrease in demand, supply
chain disruptions, cancelation of export orders, raw material shortage, and transportation
disruptions, among others. Nevertheless, it is quite clear that enterprises around the globe are
experiencing the significant impact of COVID-19 outbreak on their businesses.

We argue that major victims of COVID-19 outbreak are the micro, small & medium-sized
enterprises (MSMEs) because MSMEs, in comparison to large enterprises, usually do not
possess sufficient resources, especially financial and managerial, and are not prepared for such
disruptions likely to go longer than expected.
The coronavirus pandemic is causing large-scale loss of life and severe human suffering
globally. It is the largest public health crisis in living memory, which has also generated a major
economic crisis, with a halt in production in affected countries, a collapse in consumption and
confidence, and stock exchanges responding negatively to heightened uncertainties. While
world-wide, the number of COVID-19 continues to increase at the time of writing of this report,
in a number of OECD countries cases are diminishing, and lockdown and containment measures
are gradually being lifted.
Economic forecasts issued over April-June 2020 depict an increasingly negative outlook in terms
of the scale of the global economic recession triggered by the pandemic. In its June 2020
Economic Outlook, the OECD projected a 6% drop in global GDP, and a 7.6% fall in case of a
second pandemic wave by end 2020, with a double digit decline in some of the most hit
countries, followed by a modest recovery of 2.8% in 2021(OECD, 2020[1]). This follows a
forecast in late March, which indicated that the initial direct impact of the shutdown could be a
decline in the level of output between one-fifth to one-quarter in many economies, with
consumers’ expenditure potentially dropping by around one-third (OECD, 2020[2]). In recent
weeks, several other international organisations have issued forecast on aspects of the
 Guimbal National High school
SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

economic impact of the coronavirus pandemic. The IMF June 2020 Economic Outlook Update
projects a decline in global GDP by 4.9 percent in 2020, 1.9 percentage points below the April
forecast, followed by a partial recovery, with growth at 5.4 percent in 2021 (IMF, 2020[3]). The
June 2020 World Investment Report (Unctad, 2020[4]) forecasts a decline in global foreign
investment by up to 40% IN 2020, with a further decrease by 5-10% in 2021. The ILO
estimates the impact of COVID-19 to result in a rise in global unemployment of between 5.3

The ILO estimates the impact of COVID-19 to result in a rise in global unemployment of
between 5.3 million (“low” scenario) and 24.7 million (“high” scenario), signalling that
sustaining business operations will be particularly difficult for Small and Medium Enterprises
(SMEs)’ (ILO, 2020[5]). The WTO reported a decline in the volume of global merchandise trade
in Q1 2020 by 3% year-on-year, and expects an unpresented decline in Q2 of 18.5%,
potentially leading to a drop of 32% over 2020.

Theoretical Framework of the Study

In process to the COVID – 19 outbreak, public health authorities around the world implemented
mitigation measures such as social distancing, which shut down entire sectors of the economy,
especially those that involve interpersonal contact, such as restaurants and salons. While
authorities have forced many such as establishments to close, leaving many workers jobless,
and issued stay – at home orders (so – called lockdowns), consumers also decreased their use
of these services. 1 Further, newly jobless workers reduced their consumptions of all goods and
services. For this reason, most economists would agree that the pandemic combines aspects of
both supply and demand shocks. A supply shock is anything that reduces consumers’ ability or
willingness to purchase goods and services, at given prices. People avoiding restaurants for fear
of contagion is an example of a demand stock. Additionally, as service sector workers lose their
jobs and income, they stop purchasing all kinds of goods, such as cars and appliances, which
can also be thought of as a sectoral demand shock.
The COVID – 19 pandemic has profoundly affected the small business sector. Firms adjusted
operations not only in light of these restrictions but also as consumers cut their spending
(Farrell, Greig, et al. 2020a) and shifted some of it online (Farrell, Wheat, et a. 2020). Some
businesses temporarily closed (Bartik, et al. 2020). While cash balances rebounded, bolstered
by pandemic – related relief programs, revenues in May remained materially lower than they
were a year ago.
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

These report provides a closer look at the small businesses affected by COVID – 19 and the
ensuing economic downturn, focusing on the industries where Black – and Hispanic – owned
firms are overrepresented (personal services, repair and maintenance, and construction) as well
as the industries that have been hardest hit. Prior research identified the restaurant, retail, and
personal services industries as the most severely affected at the onset and COVID – 19 (Farrell,
Wheat, and Mac 2020a). The financial impact across the sector and especially in these

industries may have been especially impactful for Black – and Hispanic – owned businesses.
These businesses are more financially fragile, with lower revenues and less cash liquidity than
White – owned firms (Farrell, Wheat, and Mac 2020b). Accordingly, they may have been more
vulnerable to adverse shocks, especially if they were also operating in industries that were
severely impacted.

CONCEPTUAL FRAMEWORK

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Business

Business Performance
 Statement of Financial Position
 Statement of Financial Performance
 Other Statements

Figure 1. Conceptual Framework of the Study

Figure 1 shows the relationship of the independent variables which includes the 5 Categories in
Internal and External factors to the dependent variable which is the business performance
during pandemic.
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

Statement of the Problem

This study was conducted to determine the profitability of small medium enterprises in Miagao
during pandemic.
Specially, it sought to answer the following questions:
1. How does the COVID-19 Pandemic influence the profitability of small medium enterprises in
Miagao Iloilo?
2. How much profit did the small-medium business (sector/owner) lost with the lack of
customers because of the lockdown restrictions amidst the COVID-19 Pandemic?
3. What are the actions that actions that the business owners can do and should adapt in order
for their business to survive in this new normal set up?
4. Does the COVID-19 Pandemic have significantly effect on Profitability of small medium
enterprises?

HYPOTHESIS
There is a significant difference on the assessment of business performance of the small-
medium enterprises in (Miagao/ Guimbal ) Iloilo during pandemic when classified according to
the internal and external factors that affect business.

Scope and Delimitation of the Study

The study was conducted to assess and identify different factors that affect the profitability of
small medium enterprises during pandemic.
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

This study limits its coverage on the enterprises of Miagao, Iloilo only. Furthermore, the
researchers chose the businesses in Miagao as respondents in our set of questionnaires.
Afterwards, the researchers come up with assessment procedures where the information
gathered were analyzed and evaluated. Its main purpose is to identify the common problems
that they encounter and to propose possible solutions regarding this problems.

The study, consider every aspect of business private information that has an impact on their
profitability performances such as their income statement and other informations.

Limitations of the Study

This study is limited on the actual data and records of financial performance from enterprises.
The researchers would select a sample size of thirty percent (30%) from the list at random or
the small and medium enterprises and then an element or sampling interval is selected.

Significance of the study

This study aimed to determine the level of business performance of when classified
accordingly to the financial statements.
The result of this study will be beneficial to the following:
 Owner
 Employees
 LGU

Owner its primary recipient, the findings of this study would help the owner have a better
understanding on the importance and significant managing strategies on business to help them
survive in this new set up.
Employees are the most important customers because they can provide crucial insights into the
overall customer experience.
LGU will take direct measures to help a business its area, such as offering low interest loans so
that business owners can upgrade the facades and exteriors of their stores, increase their
energy efficiency, and more.
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

Definition of Terms
In the context of this study, the study following terms were defined operationally and
conceptually; elements can be arrived by getting the quotient of total population and sample
size.

Business Private Information. Represents to personal data that should only the owner and
employee know about. It should remain confidential to earn and maintain the trust of the
worker and the reputation of the enterprise/business.
United Nations Conference on Trade and Development (UNCTAD). This was established in
1964 as a permanent intergovernmental body. It was established by the United Nations General
Assembly in 1964 and it reports to the UN General Assembly and United Nations Economic and Social
Council.
In this study, UNCTAD formulate policies relating to all aspects of development including trade,
aid, transport, finance and technology. UNCTAD conducts certain technical cooperation in
collaboration with the World Trade Organization through the joint International Trade Centre
(ITC), a technical cooperation agency targeting operational and enterprise-oriented aspects of
trade development.

 Organisation for Economic Co-operation and Development (OECD).  An international

organisation that works to build better policies for better lives, generate prosperity and promote
social inclusion.

 Enterprise - a unit of economic organization or activity

 Industry - a department or branch of a craft, art, business, or manufacture
 Lockdown -  a temporary condition imposed by governmental authorities (as during
the outbreak of an epidemic disease) in which people are required to stay in their
homes and refrain from or limit activities outside the home involving public contact
(such as dining out or attending large gatherings)
 Retail - the sale of commodities or goods in small quantities to ultimate consumers
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SENIOR HIGH SCHOOL
Rizal St, Guimbal, Iloilo

 Revenue - the yield of sources of income (such as taxes) that a political unit (such as
a nation or state) collects and receives into the treasury for public use