900 SAN MARCELINO STREET ERMITA, MANILA, 1000 METRO MANILA

College of Business Administration

Correlation between the occurrence of COVID-19 Pandemic

and decrease of operations of businesses in Manila

Bautista, Christiane Dayne

Cortezano, Romylyn Joy

Gutierrez, Joyce Ann

Mislang, Patricia Anne

Bachelor of Science in Accountancy- AC 303

School Year 2021-2022

 Table of Contents

I. Introduction………………………………………………………………………………..

A. Background of the Study………………………………………………………………. 3

B. Statement of the Problem……………………………………………………………… 4

C. Objectives…………………………………………………...………………………… 4

D. Significance of the Study……………………………………………………………… 4

E. Scope and Delimitation of the Study…………………………………………………... 5

F. Definition of Terms…………………………………………………………………..... 6

II. Methodology………………………………………………………………………………

A. Research Design………………………………………………………………………. 7

B. Sample and Sampling Method……………………………………………………..... 7

C. Instrumentation………………………………………………………………….......... 7

D. Data Gathering Procedure…………………………………………………………….. 8

E. Survey Questionnaire Sample……………………………………………………….. 8

III. Results……………………………………………………………………………………. 10

IV. Discussions………………………………………………………………………………..

A. Summary of Findings…………………………………………………………………. 17

B. Conclusions…………………………………………………………………………… 18

C. Recommendations…………………………………………………………………….. 19

V. Review of Related Literature and Related Studies…………………………………..... 20

List of References……………………………………………………………………………. 23
Introduction

1.1. Background of the Study

The coronavirus disease or COVID-19 has shocked global, regional, and national

economies. People’s lives and economic activities have been strictly limited to safeguard health

and control the spread of the virus. Travel bans, temporary closures of schools and businesses,

and social distancing have accompanied quarantines. Meanwhile, private sector businesses have

cut back production as well as service delivery, and have been forced to temporarily lay off

employees. They face a lack of working capital, making it difficult to continue operating.

Prolonged containment of COVID-19 increases the risk of business failure and bankruptcy. In

particular, micro, small, and medium-sized firms are at great risk due to abrupt supply chain

disruptions and tightened financial conditions.

The purpose of this study is to investigate the Correlation between the Pandemic and

Decrease in Operations of Businesses in Manila. The study is intended to present a uniform

understanding regarding the result of the conducted survey. This study aims to help future

researchers to provide information about the hindrances of operating businesses in the midst of

the pandemic.

This study was developed through literature searches of previous studies, reviews of

existing documents, other case studies and supported survey questionnaires dispersed to random

business owners located in Manila.

1.2. Statement of the Problem

This study aims to determine the Impact of Covid-19 Pandemic to the small businesses

in Manila. Specifically, the researchers sought to answer the following:

1. How did the Corona Virus affect the business in Manila?

2. What are the factors that influence the shutdown of small enterprises?

3. What are the possible effects of the virus in the business industry especially in small

enterprises?

1.3 Objectives

The objective of this study aims to identify how the pandemic affected the businesses in

Manila. And lastly, this study aims that its audience will acquire knowledge regarding how

business owners handled and adjusted to the changes brought about by the pandemic.

1.4 Significance of the Study

The possible beneficiaries of this study entitled “Correlation between the occurrence of

COVID-19 Pandemic and decrease of operations of businesses in Manila” are the following:

Society. The findings of this study would be of great help to the society we dwell upon

in terms of providing an insight to what has happened to the business economy a midst the

pandemic.

Businessmen/Businesswomen. As of now, COVID-19 is an ongoing phenomenon and

it still affects businesses due to the imposed restrictions. They will benefit from this research as

they can be more aware if this phenomenon truly has affected the operations of businesses.
 Government. The government may use this research to give them an idea or hints about

the current situation of small businesses in Manila.

Future Researchers. Other than businessmen and government, future researchers can

use this study as a guide and as additional information in making the same topic in their future

research. In this research, the correlation of the occurrence of Covid-19 pandemic and decrease

of operations of businesses will be classified.

1.5. Scope and Delimitation

This study mainly focuses only on the possible relationship of small business' operations

and COVID-19 pandemic, but is not concerned about the positive or negative effects to those

people who owned or worked in those small businesses. This study will only focus on small

businesses within Manila. The study was conducted in the 1st semester of the academic year

2021-2022. The researcher selected randomly significant persons who worked in small

businesses, with a total of 33 respondents.

The study will also provide information to Filipino people who are considering and

planning to operate small businesses amidst COVID-19 pandemic by making them aware of the

unforeseen challenges of small businesses in times of COVID-19 pandemic.

The study is based mostly on primary data; it depends on the information given by the

owners and workers of small businesses. The respondents could furnish the information in a

survey questionnaire; however, the reliability of the data is also ensured by repeated questioning.
1.6. Definition of Terms

For a better understanding of the study, the following terms are further defined in the
context of this research.

         Business Operations. This refers to any activities that businesses perform on a daily
basis to keep the business running, growing and profiting.

         Consumer Behavior. This refers to consumer decision-making and how they behave in
purchasing goods and services for personal consumption.

         Consumer Optimism. It is an economic indicator that evaluates how optimistic

consumers are in their financial situation and the state of the economy.

         COVID-19. This stands for Coronavirus Disease discovered in the year 2019 that caused
a pandemic outbreak.

Descriptive-Correlational Research Design. This is a type of research design where

researcher explores correlations between two (or more) variables without controlling or
modifying any of them.

Pandemic. It is a global outbreak of infectious disease that affects the economy of one
country and takes the lives of the people.

         Primary Data. It is the first hand or the original research data collected by the
researchers. Considered as a more reliable kind of data in the research.

Purposive Sampling. This refers to a type of non-probability sampling in which

researchers choose people of the public to participate in their surveys based on their own
judgement.

           Supply chain. It is a system that connects businesses and its suppliers in order to
manufacture and market products and services.

           Working Capital. It is the amount of capital typically cash on hand for small businesses
that is used for sustaining their day-to-day operations.
 Methodology

2.1. Research Design

This study used Descriptive-Correlational design to determine the correlation between the

occurrence of COVID-19 and decrease of operations of businesses in Manila. This design is

devoted in gathering data of existing situations for the purpose of description and interpretation

through the use of survey instruments. The two variables to be tested in this research is the

imposed restrictions brought by pandemic and the current condition of the operations of the

businesses in Manila.

2.2. Samples and Sampling Method

The study used Purposive Sampling as their sampling method wherein the researchers
gathered respondents by the process of selecting based from judgement to select a sample which
the researchers believed, based on prior information, will provide the data they need. The
participants in this study are (N=33) business owners in Manila who are of legal age. They
consist of twenty-one (21) eighteen to twenty-seven years old, four (4) twenty-eight to thirty-
seven years old, six (6) thirty-eight to forty-seven years old, two (2) forty-eight years old and
above. The business that are currently on operation are (N=33) twenty-nine (29) who said yes
and four (4) who said no. They are informed that the research would be completed to determine
how many businesses residing in manila are affected in the decrease of operations of business.
Also, they are told that their identities are kept confidential.

2.3. Instrumentation

A survey questionnaire was used as a research instrument through google forms. Upon

this, the researchers constructed a survey questionnaire which will be used to measure the

correlation of the occurrence of COVID-19 Pandemic and the decrease of operations in

businesses.
2.4. Data Gathering Procedure

The researchers provided questionnaires to gather information for the study. Then, they
collected information from Business owners or previous business owners in the vicinity of
Manila. Beforehand, the respondents were instructed on how to answer the instruments and they
were also informed in the purpose of this study.

2.5. Survey Questionnaire sample:

Indicated here are the questions used in conducting the survey for data gathering:

Respondent’s Details:
Name: ___________________________ Age: ________________ Gender: __________
District in Manila:

1. Is your business currently on operation? ☐YES ☐NO

If yes, is it temporary or permanent? ☐YES, IT’S TEMPORARY
☐YES, IT’S PERMANENT
If no, can you state one reason? __________________________________

2. During the pandemic, did your business suffer loss? ☐YES ☐NO

3. In the rate of 1-10 with 1 being the lowest and 10 being the highest, how gravely does the
pandemic affect your business?
NOT AFFECTED AT ALL
SLIGHTLY AFFECTED
TERRIBLY AFFECED

4. Did your business suffer from loss of sale? ☐YES ☐NO

If yes, how would you rate the decrease of sale in your business?

5-10% 11-20% 21-30% 31-40% 41%

DECREASE OF DECREASE OF DECREASE OF DECREASE OF ABOVE
SALE SALE SALE SALE DECREAS
E OF
SALE
5. During the pandemic, did you lose some of your staffs/employee? ☐YES ☐NO

If yes how many staff/employees?

1-3 4-6 7-9 10

STAFF/EMPLOYEES STAFF/EMPLOYEES STAFF/EMPLOYEES ABOVE
6. Have you cut out some of the expenses? ☐YES ☐NO
7. During the pandemic, do you have problems regarding your supplies?
☐YES ☐NO
8. During the pandemic, do you have problems regarding customers demand?
☐YES ☐NO
9. During the pandemic, do you have problems regarding your employee’s health?
Sickness etc. ☐YES☐NO
10. Did you think online selling would be an efficient way
to keep your business running? ☐YES ☐NO
11. Have you considered online selling as the nature of your business?
☐YES ☐NO
12. How does the temporary closing of stores affect your business?

NOT AFFECTED AT ALL SLIGHTLY AFFECTED TERRIBLY AFFECED

13. Do you consider dropping your business? ☐YES ☐NO

14. As a business owner, what do you think is the main reason for several business closing
down?
FINANCIALLY DECREASE OF LOW CUSTOMER EFFECT OF
UNSTABLE SALE DEMANDS COVID 19
PROTOCOLS

15. Do you think business would be able to adjust to the new normal? ☐YES ☐NO
Why?
________________________________________________________________________
 Results

Indicated here are the responses of the respondents to the questions included on the
survey questionnaire:

DEMOGRAPHIC PROFILE OF THE RESPONDENTS

Summary of Findings, Conclusions, and Recommendation

3.1 Summary of Findings

The researchers have gathered these survey results. 63% of the respondents are within

the age of 18-27 years old who resides mostly from District 6 in Manila. The researchers asked

them if their current business is in operation and 87% of them said yes. 56% of them even

answered that they are in permanent operation. In the midst of the pandemic, the coronavirus

pandemic affected the small businesses in many ways. Some were forced to shut down because

of restrictions by the government while some also made use of the social media to thrive. 75% of

the respondents stated that they suffered from loss of sale, and 26% of them voted for

approximately 41% decrease in their sales. The respondents also said that they lost some staffs

during the pandemic, 78% of them even informed the researchers that they have lost 10

employees above. These losses result to the respondents cutting their expenses, these respondents

have a percentage of 81%. 69% of the respondents had problems in their customer demands and

their supplies. Majority of the respondents also experienced problems in their employees’ health.

With all the predicament that the pandemic has brought, 81% of the respondents thought that

online selling would be an efficient way to keep their business running and even 69% of them

considered online selling as the nature of their businesses. With all the troubles that the pandemic

has caused, the temporary closing of their business has affected the 33% of the respondents

saying that they were mildly challenged by it. When the researchers asked what is the main

reason of several businesses closing down majority of the respondents answered that it is all due

to the decrease of sale.

3.2 Conclusion

On this study, the researchers concluded that the business owners whose

businesses reside in Manila are affected by the imposed restrictions and events which occurred,

such as lockdown, during the Covid-19 Pandemic.

The researchers focused their study on business owners or previous business

owners, who are of legal age and are residing in the City of Manila. Among the owners whom

the researchers have surveyed upon, most of them still have their business in operation.

However, it is very evident that these businesses have experienced losses when the pandemic

aroused. World Bank Group (2021) claimed that 66 % of firms did not have enough cash to pay

all costs and payments, such as payroll, suppliers, taxes or loan repayments, beyond 1 month.

Sales are the main reason why companies are thriving to exist and operate, and this is the basis

why most of the respondents see this as the reason for the closures of businesses. The sales of

these businesses have also greatly declined based on the results where most respondents claimed

that they experienced more than 41% decrease in their sales.

And every 7 out of 10 respondents have claimed that there was indeed a decrease in

customer demand for their products or services. World Bank Group (2021) claims that the

“reason for decreased sales is limited operation (58 %) and inability of customers to come to

establishments (38 %)”. The results heavily agree that the business owners have reduced their

employees due to the occurrence of the pandemic, where the World Bank Group has also seen a

downward adjustment of employment which continued in November 2020, which was seen in

38% of the companies.

3.3 Recommendations

1. This study has showed there is really an evident impact of the COVID-19 Pandemic in

the small businesses in the vicinity of Manila. There are evident losses, decrease of sales

and lost of employment to staffs of these businesses which is why this study recommends

for the municipality of Manila to have a concrete program which would help these

entrepreneurs to maintain their businesses and to keep the city’s economy alive despite

the pandemic.

2. The researchers recommend to frame a valid questionnaire which was used to measure a

similar phenomenon like COVID-19 from a past research to increase the reliability of the

paper’s results and interpretations.

3. To future researchers: Expand the demographic field, having a wide variety of responses

is a good thing for this concerns the myriad opinions and views of people who has a

business regarding the business industry in times of pandemic.

4. The researchers suggest to have a more thorough understanding of the correlation

between the pandemic and the how businesses adapted to the situation.

5. To entrepreneur: To minimize the risks and impacts of COVID-19, entrepreneurs must

focus on marketing digital economy, which appears to be more supportive of

entrepreneurs in the face of social distancing.

6. The researchers advise those who want to be entrepreneurs to anticipate this type of

situation, which may help them avoid suffering so much loss in such a predicament.
 Review Of Related Literature

According to the study of Numerator Intelligence (2020), data analysis in 10 months from

March 2020 to December 2020 shows a big impact of Covid-19 on consumer behavior. Based on

the surveys in the first week of April, approximately 9 out of 10 consumers experiencing a

negative impact of the pandemic to their shopping behavior and experiences. Despite changes in

the pandemic and continued modification of lockdown, the overall level of consumer impact has

remained strong, with only two dips below 80% in September and October.

Based on a McKinsey & Company survey (2021), consumers from the Philippines are

cautiously resuming their pre-pandemic spending activity. According to the survey data collected

between April 2020 and October 2020 the overall consumer optimism remained the same but the

consumer optimism of the lowest income have declined noticeably. Additionally, estimated 50%

or half of the respondents believe that the impact of Covid-19 on their finances will remain for at

least 6 more months.  

According to the study of the World Bank Group , The findings are based on the survey

of 13,878 firms conducted from November 26 to December 10, 2020, to assess the impacts of

COVID-19 on firms. This survey builds on a government survey in April 2020 and the World

Bank-government joint survey in July 2020, both of which benefit from a large sample size and

present a nationwide representative snapshot of firms in the Philippines. Easing of the

community quarantine has led to more businesses reopening (63 % in November vs. 45 %  in

July), but with only a small proportion operating at full capacity (9 percent). While some

managers closed businesses in compliance with government regulation (9 %), others voluntarily

closed their businesses (21 %) despite eased community quarantines. About 7 % of firms
reported to have closed permanently. Reduction in sales has continued for firms. 67 % of firms

reported a reduction in sales between July and November 2020, compared to 88 percent between

April and July 2020. The main reason for decreased sales is limited operation (58 %) and

inability of customers to come to establishments (38 %). Downward adjustments of employment

continued in November 2020 (38 %), albeit at a slower pace than in July 2020 (50 %).

Significant shares of firms also made adjustments on the intensive margin, reducing hours (19

%) and wages (16 %). Only 3 percent of firms hired new employees. A large share of firms

reported acute liquidity constraints, with reports of not having enough cash and having fallen

behind in payments. 66 % of firms did not have enough cash to pay all costs and payments such

as payroll, suppliers, taxes or loan repayment beyond 1 month. Two thirds of firms had adjusted

loan repayment terms, and 48 % of firms were in arrears, with an additional 29 % expecting to be

in arrears by February 2021. Despite firms expressing cautious optimism that sales and

employment will increase over the next 3 months, many expect their financial positions to

worsen.

According to Business World, the Department of Labor and Employment (DoLE) has

tallied about 200 permanent business closures during the public health emergency, which

imposed lockdown that did not allow them to operate or impaired the mobility of suppliers and

potential customers.

Labor Secretary Silvestre H. Bello III said the count is based on businesses that have

notified DoLE of their closure. Speaking at a Laging Handa briefing Wednesday, he added that

over 3,000 businesses closed temporarily (2020).

 At the onset of the pandemic 140,104 were marked temporarily closed on Yelp.com, but

by August that had fallen to 65,769. That drop, however, is not entirely driven by businesses

reopening; instead, many have simply gone under. More than 97,966 businesses have

permanently shut down during the pandemic, according to Yelp.com's Local Economic Impact

Report (2020)

According to the study of Asian Development Bank (2020), there are relationship

between business closure and its size. It is stated that, when the business is smaller, there is only

3.7% that the businesses remain open.

According to Think Asia, The Asian Development Bank conducted a Philippine

enterprise survey during April and May 2020 to gauge the impact of the novel coronavirus

disease (COVID-19) on the business community. This report provides a rich set of initial facts

and ideas for the government to develop evidence-based policy making to support the revival of

Philippine enterprises hurt by the pandemic. It also provides survey-based information for

current and future analytical use.

According to Future Learn Website, Between April and July 2020, 88% of businesses

reported a drop in sales, and between July and November 2020, 67% reported a drop in sales.

The biggest cause of decreased sales was limited operation (58%) and customers’ inability to

visit brick-and-mortar establishments (38%). A high number of businesses reported severe

liquidity problems, with many claiming to be cash-strapped and behind on payments. 66% of

businesses lacked sufficient cash to cover all costs and liabilities, such as wages, suppliers, taxes,

and loan repayment, for more than a month. 48% of businesses were in default. 
 References

Intelligence, N. (2021, January 28). Impact of coronavirus (COVID-19) on consumer behavior in

2020. Numerator. Retrieved November 16, 2021, from
https://www.numerator.com/resources/blog/impact-covid-19-consumer-behavior.

McKinsey & Company. (2021, February 2). Survey: Filipino consumer sentiment during the
coronavirus crisis. McKinsey & Company. Retrieved November 16, 2021, from
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-
filipino-consumer-sentiment-during-the-coronavirus-crisis.

Bank, A. D. (2020, July). The COVID-19 Impact on Philippine Business. Retrieved from
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https://www.adb.org/sites/default/files/publication/622161/covid-19-impact-philippine-business-enterprise-
survey.pdf

Cortez, G. (2020, July 1). Permanent business closures estimated at 200, Labor dep’t says.
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dept-says/

Yelp: Local Economic Impact Report. (2020, September). Yelp. Retrieved November 17, 2020,
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Philippines COVID-19 Firm Survey conducted in November 2020. World Bank,
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https://openknowledge.worldbank.org/handle/10986/35430 License: CC BY 3.0 IGO.”
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