The tremendous economic impact of the COVID-19 pandemic has been devastating.

This
has affected many industries in the global economy. An unexpected outbreak that had
widespread impacts, and changes the whole region, continent, or the entire globe. Many
countries and businesses suffer from significant losses. On a microeconomic level, the effects of
COVID-19 have been particularly acute.
Small businesses have been severely impacted, with many of the businesses unable to
continue their operations, while others experienced a dramatic drop in revenue. This has
resulted in businesses reducing their workforce which caused job losses as well as lower
compensation and working hours for those who have been fortunate to retain their positions in
the business. This has had a ripple effect on the entire economy, as those who have lost their
jobs or had their wages reduced have less money to spend in the market, causing businesses to
lose even more money.
As a result, this pandemic has had a major impact on consumer confidence, as many
people are terrified to go out and spend their money, at the same time, acquiring the virus.
Consumers have to adjust their spending habits to the situation and had to find alternative
ways to meet their needs. Which led to a decrease in demand for products and services, further
aggravating the economic downturn. In addition, COVID-19 also impacted the prices of goods
and services. Supply chains and demand were disrupted during the early stages of the
pandemic.
To further explore the scope of the problem of COVID-19, the researchers will
individually deconstruct the impact on global economic activity, with significant implications at
the microeconomic level. This paper will further discuss the extent of the problem of the
COVID-19 pandemic in demand and supply chain disruptions, consumer spending, spending
behavior, labor market, financial markets, individuals focusing on how inequality, social stigma,
and vulnerability worsened during the pandemic, government debt, and inflation, as well as
deflation.
 Demand and Supply Chains Disruptions

The COVID-19 pandemic severely disrupted both demand and supply. This disruption in
demand and supply has been felt by consumers in two ways. On the side of demand, consumer
spending has been affected by lockdowns, travel restrictions, and job losses, resulting in an
abrupt fall in demand for certain goods and services as consumers become more frugal in their
spending habits. On the supply side, lockdowns, the supply chain disruptions have affected the
production and distribution of goods, resulting in a sudden drop in certain goods and services,
as suppliers incur more charges than usual due to the decrease in supply. These are some of the
major disruptions that significantly affected the volatility in the global economy, with certain
commodities and services seeing price increases while others saw price decreases.
This demand-supply disruption due to COVID-19 has resulted in overall economic
activity. This has had a severe impact on both consumers and businesses since their purchasing
power and earnings have been diminished to minuscule amounts. The long-term effects of this
disruption are expected to also have long-term consequences for the global economy.

Labor Market

The labor market during the COVID-19 pandemic has a devastating effect on the labor
market. Millions of workers have been furloughed or laid off due to business closures, and
many workers facing reduced hours and pays causing their income to decrease drastically. In
the market, there are large number of job seekers but because of the sharp decrease in job
openings creating increased competition for jobs, and it affected the market causing
unemployment. During the rise of pandemic in 2019, the unemployment rate recorded in the
Philippines was 5.3% but it suddenly rose to 17.7% accounting to 7.3 million unemployed
Filipinos in April 2020. It also affected he average number of hours worked per week declined
to 35.0 in April 2020, down from 41.8 in April 2019. This is because of the pandemic induced
economic recession, which has been worsened by government’s stringent quarantine policies.
To address the issue of unemployment, the government has launched a variety of
initiatives and policies. These include offering monetary support to impacted workers, boosting
the budget for job training, and instituting firm retention subsidies. The government has also
stepped its efforts to encourage job creation and investment in the digital industry.

Consumer Spending

Consumer spending during COVID-19 pandemic was greatly impacted too, due to the
economic downturn. Many people had to either reduce or completely stop their spending as
incomes tumble, unemployment soared, and anxiety about the future lingered.
For the record, food and beverage, health care and internet services wre among the few
industries that has seen to have increasing expenditure during the early days of pandemic.
When lockdowns were implemented throughout the world, worried customers had to tighten
their spending habits to cope with the new limitations brought on by the COVID-19 pandemic. A
study from Philippine Statistics Authority (PSA), said that in 2020, household consumption fell
by 8.3 percent during the lengtened lockdown that lasted for over two months. Consumers
purchase products to meet their needs, but in some time during the pandemic, consumers
showed a three distinct needs: to survive, to entertain, and to connect. Consumers have to held
off discretionary purchase and postponed major events asuch as weddings, vacation, and car
purchases. Undeniably, consumers had to purchase items necessary to survive and protect
themselves against COVID-19 but effect does not just revolve around the consumer spending, it
also changes their behavior in spending.

Spending Behavior

People may have limited money to spend during COVID-19 but that doesn’t deter them
to take a little treat to satisfy their wants for themselves.
During the midlife of COVID-19 pandemic, many people are still stuck at home due to
restrictions, social distancing, and work-from-home set ups. Consequently, many people have
more time to spend to entertain themselves. A survey conducted by Stista showerd that
Filipinos average time spent online is 5.2 hours a day during the pandemic, this report was the
highest compared to other countries in Shouth East Asia. Another survey conducted by Kantar
Worldpanel revealed that Filipinos spend more time in digital entertainment, online shopping,
online selling across social media platforms, video streaming, and other digital services beside
from the time spent in work-related activities, such as video conferencing, online meetings and
collaborations. Since almost everything is now sold or offered online, including food, clothes,
medications, plants, and even education and financial products. The drastic shift to digital space
shows that Filipinos are maximizing their access to the digital technology since almost all of the
products and services have migrated into the digital space.