ORIGINAL QUILBOTT

INTRODUCTION INTRODUCTION

RATIONALE OF THE STUDY RATIONALE OF THE STUDY

The outbreak of a new contagious disease known as
The outbreak of the new contagious disease,
Corona Virus Disease 2019, has brought changes and
named Corona Virus Disease 2019 has brought
challenges to traditional business, drastically shifting to a
changes and challenges to the conventional
new normal of survival. The transition to the New Normal
business, drastically shifting to the new normal of
necessitates the imposition of restrictions and quarantine
survival. The haul to New Normal necessitate the
orders by various governments across borders, which
imposition of restrictions and demands by different
are required to ensure people's safety. Regrettably, many
governments across boarders which are
businesses have been forced to close. The small
indispensable, ensuring safety of the people.
business industry has grown tremendously. The
Woefully, shutters many businesses.
widespread closure of businesses worldwide as a result
Tremendously, the small scale business industry.
of COVID-19 is unprecedented in terms of global reach
The widespread closing of businesses around the
and impact [ CITATION Chu20 \l 13321 ] Many micro-
world due to COVID-19 is unprecedented in its
enterprises have closed as a result of the pandemic's
global reach and impact [ CITATION Chu20 \l 13321 ]
forced demands, inability to finance business expenses,
Many micro-enterprises have closed due to forced
and to manage relative operations. According to
demands, inability to finance business expenses
[CITATION Sun201 \l 13321 ], 163,735 businesses have
and incapacitated to manage relative operations
closed in the United States, a 23 percent increase since
amidst pandemic. According to [CITATION Sun201 \l
mid-July, with 97,966 of the total number of business
13321 ], 163,735 businesses have closed in U.S., a
closures now being permanent. A report released by
23% increase since mid-July, while confirming that
Canadian Federation of Independent Business, over
97,966 of the number around 60% of business
200,000 businesses in Canada could close permanently
closures are now permanent. A study released by
during the COVID-19 crisis [ CITATION Gau20 \l 13321 ]. An
the Canadian Federation of Independent
estimated of 6 million people in the UK supporting 16.6
Business on January 21, 2021 suggests over
million jobs are in financial jeopardy as a result of the
200,000 businesses could close permanently
pandemic, and nearly two-thirds of entrepreneurs believe
during the COVID-19 crisis in Canada [ CITATION
their business may not survive the pandemic's pressures
Gau20 \l 13321 ]. A research study published by
[ CITATION Ste20 \l 13321 ]. This makes small scale
King’s Business School showed that an estimated
business more prone to the negative effects of
6 million in the UK supporting 16.6 million jobs are
environmental factors [ CITATION dAm88 \l 13321 ]. As a
in a financially precarious position as a result of the
result, the impact on small scale businesses around the
pandemic and nearly two-thirds of entrepreneurs
world is likely to be [ CITATION Fai20 \l 13321 ].
felt their business might not survive the pressures
Restaurants and retails have been struggling and remain
of the pandemic. This makes small scale business
hardest hit [ CITATION Bia20 \l 13321 ]. The restaurant
more prone to the negative effects of environmental
factors (d'Amboise, 1988. Thus, the impact on industry continues to be among the most impacted with
small scale businesses around the world is likely to an increasing number of closures – totalling 32,109
be severe [ CITATION Fai20 \l 13321 ]. closures as of August 31, with 19,590 of these business
Restaurants and retails have been closures indicated to be permanent (61%) [ CITATION
struggling and remain hardest hit [ CITATION Bia20 \l Bia20 \l 13321 ] Retail and shopping follows closely
13321 ] The restaurant industry continues to be behind restaurants with 30,374 total business closures,
among the most impacted with an increasing 17,503 of which are permanent (58%) [ CITATION Bia20 \l
number of closures – totalling 32,109 closures as of 13321 ].
August 31, with 19,590 of these business closures However, the length of closures was not evaluated.
indicated to be permanent (61%) [ CITATION Bia20 \l
13321 ]. Retail and shopping follows closely behind In 2019, the Philippine Statistics Authority (PSA)
restaurants with 30,374 total business closures, recorded a total of 1,000,506 business enterprises
17,503 of which are permanent (58%) [ CITATION operating in the country. Of these, 995,745 (99.5%) are
Bia20 \l 13321 ]. Though, stretch of closures were MSMEs and 4,761 (0.5%) are large enterprises. Micro

not assessed. enterprises constitute 89% (891,044) of total MSME

establishments, followed by small enterprises at 10%
In 2019, the Philippine Statistics Authority (PSA) (99,936) and medium enterprises at 0.5% (4,765). The
recorded a total of 1,000,506 business enterprises declaration and imposition of Enhance Community
operating in the country. Of these, 995,745 (99.5%) Quarantine (ECQ) across all of Luzon on March 16, 2021
are MSMEs and 4,761 (0.5%) are large forced non-essential business closures, resulting in
enterprises. Micro enterprises constitute 89% economic depression. For this reason, 90,000
(891,044) of total MSME establishments, followed businesses, mostly micro small & medium enterprises
by small enterprises at 10% (99,936) and medium (MSMEs) closed as the coronavirus pandemic continues
enterprises at 0.5% (4,765). The pronouncement to cause chaos on the economy [ CITATION Ram20 \l
and imposition of Enhance Community Quarantine 13321 ]. As Small and medium enterprises (SMEs) are
(ECQ) under entire Luzon on March 16, 2021 characterized by limited financial and nonfinancial
forced business closures that were classified as
resources [ CITATION Wel81 \l 13321 ]. During the first
non-essential that resulted to economic depression.
phase of lockdown, the Philippine economy immediately
For this reason, 90,000 businesses, mostly micro
experienced a sharp decline in domestic and foreign
small & medium enterprises (MSMEs) closed as
demand, international trade, national production, and
the coronavirus pandemic continues to cause
consumer confidence. Together with funding constraints
chaos on the economy [ CITATION Ram20 \l 13321 ].
on businesses, it signalled the start of huge economic
As Small and medium enterprises (SMEs) are
losses [CITATION Shi211 \l 13321 ]. Data published by
characterized by limited financial and nonfinancial
Phlippine Statistics Authority showed that the country's
resources [ CITATION Wel81 \l 13321 ]. During the
gross domestic product shrank by 9.5%, SMEs contribute
first phase of lockdown, the Philippine economy in the development and growth of an economy. The
 worst economic performance since the country began
immediately experienced a sharp decline in
releasing growth data just after World War II in 1947
domestic and foreign demand, international trade,
[ CITATION Ven21 \l 13321 ]. Year 2020 will be
national production, and consumer confidence.
remembered as the most difficult year in our lives as the
Together with funding constraints on businesses, it
pandemic tormented the country.
signalled the start of huge economic losses
[CITATION Shi211 \l 13321 ]. Data published by
Philippines SMEs found that 59.9% of microenterprises
Philippine Statistics Authority showed that the
had no sales in March 2020 due to the temporary closure
country's gross domestic product shrank by 9.5%.
of business, followed by small firms (44.8%) and
SMEs contribute in the development and growth of
medium-sized firms (35.8%), suggesting a more serious
an economy. The worst economic performance
impact on microenterprises [CITATION Shi211 \l 13321 ].
since the country began releasing growth data just
The study's longevity was only conducted during the
after World War II in 1947 [ CITATION Ven21 \l
month that the Enhance Community Quarantine was
13321 ]. The year 2020 will be remembered as the
imposed. The purpose of this study is to determine the
most difficult year in our lives as the pandemic
impact of COVID-19 during and after the period of
continues to torment the country (Duterte Economic
lockdown impositions, as well as to assess the variance
Team, 2021).
of effects across different lockdown classifications and
Philippines SMEs found that 59.9% of
controls.
microenterprises had no sales in March 2020 due
The assessment of a business's lifespan would also cons
to the temporary closure of business, followed by
ider the correlation and factors that contribute to recovery 
small firms (44.8%) and medium-sized firms
and survival.
(35.8%), suggesting a more serious impact on
microenterprises [CITATION Shi211 \l 13321 ]. The The road ahead remains challenging, but light is always
longevity of the study was only conducted the at the end of the tunnel.
period when the Enhance Community Quarantine On the bright side, the Pandemic has created opportuniti
has been imposed, a month in specific. The es in other industries such as health and e-commerce.
conduct of this study would ascertain the Impact of As the SMEs economy started to turn in the fall, that
COVID-19 within and beyond the period of custom sales started to fall off disproportionately to the
lockdown impositions and to assessed the variance other part of the business. Fortunately, the
of effects into different lockdown classifications. unprecedented crisis have provided an opportunity for
The assessment of Business lifespan would also those firms whose product-market fit was strengthened
view the correlation and attributes to recovery and due to the new circumstances or those that could pivot
survival. their product/service offerings to address newly emerged
pain points which provides an e-commerce platform for
"The road ahead remains challenging, but there is online stores experienced sharp revenue
now light at the end of the tunnel." (Chua, 2021).
growth[ CITATION Lim20 \l 13321 ] . According
On the brighter side, the Pandemic has also
provided opportunity to other industry such as the to[ CITATION Mey20 \l 13321 ], sales of hygienic and
health and e-commerce. As the SMEs economy medical masks have increased by more than 300
started to turn in the fall, that custom sales started percent. Some MSMEs had also sales increase due to
to fall off disproportionately to the other part of the special demand during the lockdown, such as retail trade
business. Fortunately, the unprecedented crisis offering daily goods and food [CITATION Shi211 \l
have provided an opportunity for those firms whose 13321 ]. Nonetheless, assessing business firms shifting
product-market fit was strengthened due to the new to e-commerce is critical in identifying opportunities
circumstances or those that could pivot their created by this pandemic.
product/service offerings to address newly
emerged pain points which provides an e- The Philippine government's limitations, restrictions, and
commerce platform for online stores experienced continuous lockdowns are also causing a lack of study.
sharp revenue growth [ CITATION Lim20 \l 13321 As a result, the true syndromes have yet to be identified,
]. Market research company Nielsen has published and the country's larger impact on small-scale

an article that hygienic and medical mask sales are businesses remains speculative. This study is significant

up by more than 300%. Some MSMEs had also because local studies to assess the deeper impact of this
sales increase due to special demand during the pandemic on Small Scale Industry are very limited. The
lockdown, such as retail trade offering daily goods result of this study will also assist the government and

and food [CITATION Shi211 \l 13321 ]. business entrepreneurs in understanding the positive and
Nevertheless, assessing business firms shifting to negative impact of the pandemic, which may lead to the
development of business policies and mechanisms to aid
e-commerce is essential in viewing for
each other’s recovery during this financial crisis.
opportunities brought about by this pandemic.

The limitations, restrictions and continuous

lockdowns imposing by the Philippine Government
is also resulting to lack of study. Hence, the real
syndromes are not yet being diagnosed and the
deeper impact on small scale businesses in the
country remains a hypothesis. The conduct of this
study is very significant specially that similar
studies are very limited to assess the deeper
impact of this pandemic to Small Scale Industry.
The conduct of this study would also help the
Government and Business Entrepreneurs to
understand the adverse effect of the pandemic
which may result to the formulation of business
policies and mechanisms in helping each other
recover during this financial crisis.

REFERENCES
Bialik, C., & Gole, D. (2020). Yelp: Local Economic Impact Report. California: Yelp. Retrieved
from https://www.yelpeconomicaverage.com/
Chudik, A., Mohaddes, K., Pesaran, H. M., Raissi, M., & Rebucci, A. (2020, October).
voxeu.org. Retrieved from voxeu.org: https://voxeu.org/article/economic-consequences-
covid-19-multi-country-analysis
d'Amboise, G. (1988). Management Theory for Small Businesses: Attempts and Requirements,
xiii, 226-240. Retrieved from https://doi.org/10.2307/258574
Fairlie, R., & Fossen, F. (2020, August 27). The impact of COVID‐19 on small business owners:
Evidence from the first 3 months after widespread social‐distancing restrictions, 12.
doi:10.1111/jems.12400
Gaudreault, S. (2020). Toronto: Canadian Federation of Independent Business. Retrieved from
https://www.google.com/search?
q=canadian+federation+of+Independent+Businesslocation&oq=canadian+federation+of
+Independent+Businesslocation&aqs=chrome..69i57j33i10i160l2.15307j0j4&sourceid=c
hrome&ie=UTF-8
Lim, D. S., Morse, E. A., & Yu, N. (2020). The impact of the global crisis on the growth of SMEs:
A resource system perspective, 38(6), 492-503. doi:10.1177/0266242620950159
Meyer, S. (2020). Understanding the COVID-19 Effect on Online Shopping Behavior. Retrieved
from https://www.bigcommerce.com/blog/covid-19-ecommerce/#conclusion
Ramos, C. M. (2020). DTI: 90,000 businesses remain closed amid pandemic. Manila:
Inquirer.net. Retrieved from https://business.inquirer.net
Shinozaki, S., & Rao, L. N. (2021, February). COVID-19 IMPACT ON MICRO, SMALL, AND
MEDIUM ENTERPRISES UNDER THE LOCKDOWN: EVIDENCE FROM A RAPID
SURVEY IN THE PHILIPPINES, 39. Retrieved from
https://www.adb.org/sites/default/files/publication/677321/adbi-wp1216.pdf
Stephan, U., Zbierowski, P., & Hanard, P.-J. (2020). Supporting Entrepreneurship during the
Covid-19 Pandemic: A Global Study of Entrepreneurs' Resilience and Well-being.
Retrieved from https://www.kcl.ac.uk/research/supporting-entrepreneurship-covid-19-
pandemic-global-study-entrepreneurs-resilience-well-being
Sundaram, A. (2020, December 11). cnbc.com. Retrieved from cnbc.com:
https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of-business-closures-due-
to-the-coronavirus-pandemic-are-now-permanent.html
Venzon, C. (2021). Philippines GDP shrinks 9.5% in 2020, worst since 1947. Singapore: Nikkei
Asia. Retrieved from https://www.google.com/search?
q=nikkei+asia+location&oq=Nikkei+Asia+loca&aqs=chrome.1.69i57j33i160l4j33i21.6937
j0j7&sourceid=chrome&ie=UTF-8
Welsh, & White. (1981). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=3650473