CHAPTER I

INTRODUCTION

Inflation is an economic crisis that affects Small and Medium Enterprises (SMEs) and

prompts them to adopt certain coping mechanisms in order to stay in the business. Inflation, or

the rising cost of commodities, has an impact on SMEs since it forces them to raise the prices of

their products in order to maintain a profit margin. As a result, SMEs risk losing sales in order to

remain in business, and some have been forced to make drastic cost-cutting decisions. Because

of this, they must be strategic in all aspects of running their business in order to keep their doors

open and their workers employed. With the various challenges encountered by SMEs due to

inflation, they employ different coping mechanisms to keep them thriving in an inflationary

environment.

Various studies around the globe have enumerated the struggles and coping mechanisms

of SMEs on inflation. Studies conducted in Romania, Germany, and Kenya have determined that

massive reduction in sales, restriction of activity, risk in a competitive position, supply chain

disruption, and high cost of finance are some of the struggles faced by SMEs on inflation

(Doaca, 2022; Zemmrich et al, 2022; Ochanda, 2014). As to coping mechanisms, in Romania,

SMEs availed of short-term financial assistance and subsidies provided by European

governments (Doaca, 2022). Similarly, access to credit and financial innovation are the coping

mechanisms used by SMEs in Nairobi County (Ochanda, 2014). In addition to this, SMEs in

Germany cope with the effects of inflation by increasing efficiency by maintaining their supply

function and implementing transformation projects (Zemmrich et al, 2022).

 In the Asian context, various studies about the struggles and coping mechanisms of SMEs

on inflation were found. A study conducted in Hong Kong determined that the economic crisis

caused SMEs a decrease in their sales (Chu & Siu, 2013). Meanwhile, SMEs in Sri Lanka have

struggled with a high cost of production and demand decline due to inflation, causing a shortage

of required raw materials and continuous power cuts (Wayamba, 2022). Also, a study conducted

in Indonesia revealed that inflation scaled back the total number of SMEs in the country

(Sulistiyono et al, 2020). To cope with the difficulties brought by the inflationary crisis, studies

in Sri Lanka, Hong Kong, Indonesia, and Syria have enumerated their approaches to fight the

negative effects of inflation. In Sri Lanka, SMEs were able to preserve themselves and survive

even during the economic crisis through their dynamic qualities and entrepreneurial mindset

(Sriyani, 2022). In Hong Kong, SMEs dealt with the crisis by reducing or stopping the hiring of

new staff and restricting overtime (Chu & Siu, 2013). In Indonesia, SMEs seek additional

income by creating innovations in various products (Sulistiyono et al, 2020). Whereas, a study

conducted in Syria recommends that authorities should reduce lending rates, increase loan sizes

available to SMEs, provide innovative sources of funding to reduce funding costs and provide

training in digital tools to enhance their expansion and survival opportunities (Akkad &

Mouselli, 2023).

In the Philippines, some studies also indicated the struggles and coping mechanisms of

SMEs on inflation. The findings of the study conducted by Shinozaki and Rao (2021) revealed

that working capital shortage is the main struggle faced by SMEs with inflation. Similarly, SMEs

experienced lower sales due to inflation (Business Mirror, 2022). Another study revealed that

toward the year 2021, as economies gradually shifted to the recovery stage of the inflationary

crisis, the Philippines experienced a continued sharp drop in demand and revenue (Asian
Development Bank, 2021). The findings of a study conducted by the United Nations Conference

on Trade and Development (UNCTAD) (2022) showed that the changed market environment in

the country due to inflation, together with government policy responses to the economic crisis,

raises some competition law issues that competition authorities and policymakers around the

world have been grappling with. Some of these issues, such as dominance in digital markets,

existed prior to the inflationary crisis but have been exacerbated by recent events (UNCTAD,

2022). To cope with the struggles caused by inflation, SMEs shifted to digital transactions and

acquired financial assistance from the government (Shinozaki & Rao, 2021; BusinessMirror,

2022). Similarly, most Philippine SMEs turned to the use of the ‘online marketplace’ for the

reason that the group chat feature of instant messaging and social-media platforms allows SMEs

to conduct much of their business on their smartphones (UNCTAD, 2022).

Locally, there is no available research to use as a basis for this study. From the point of

view of the researchers, they observed how inflation affects businesses in the locality, causing

the rise of prices in commodities forcing them to cut down in terms of their product quality,

increase their prices despite the risk of losing customers, cut down on workers, and in extreme

cases, even lead to closure of the business entity. The Philippines’ inflationary environment and

the desire to help SMEs are what prompted the researchers to conduct the study. In Particular,

the researchers would like to know the struggles encountered by SMEs due to inflation and what

are the coping mechanisms employed to address inflation. It is projected that the study’s findings

will help SMEs combat the negative effects of inflation and provide suggestions on the forms of

support they can get that will help them survive an inflationary environment.
Theoretical Lens

The Demand-Pull Theory by John Maynard Keynes (1883-1946), the Cost-Push Inflation

Theory by Alban William Phillips (1960), and the Transactional Theory of Stress and Coping by

Lazarus and Folkman (1984) are being used in this paper.

The demand-pull theory of Keynes (1883-1946) was formulated from the Keynesian

macroeconomic model and was used to contrast price increases arising from excess demand with

those arising from shocks to aggregate supply. Keynes and his followers emphasized the increase

in aggregate demand as the source of demand-pull inflation. Keynes used the notion of the

inflationary gap to show an inflationary rise in prices. The aggregate demand comprises

consumption, investment, and government expenditure. If there is an increase in aggregate

demand, and the supply remains the same or decreases, prices for goods and services are pulled

higher. This consideration is applied in this study to show how rising prices could impact SMEs'

struggles and how it can cause turbulence resulting in the closure of the business enterprise.

Moreover, this consideration will help explain the struggles of SMEs on rising prices and how

they will be able to cope with it.

The Cost-Push Inflation Theory of Alban William Phillips (1960) occurs when overall

prices increase due to a supply shortage caused by a natural disaster, an increase in labor prices,

or problems with supply chains. There are three considerations of cost-push inflation namely

wage-induced inflation, profit-induced inflation, and increase in the cost of inputs and raw

materials. On the first consideration, labor unions force employers to grant salary increases,

which raises the cost of production. Employers, in turn, increase the prices of their products to

compensate for the increase in the cost of production. Second, profit-induced inflation happens
when firms raise the price of their products to offset the rise in labor and cost of production to

earn higher profits. On the third consideration, there is a decrease in the aggregate supply of

goods and services stemming from an increase in the cost of production. As firms are faced with

higher costs of producing each unit of output they tend to produce a lower level of output and

raise the prices of their goods and services. The three considerations exhibit both the struggles

and coping mechanisms faced by SMEs due to inflation. Thus, this theory will be applied to

understand how SMEs struggle with cost push inflation given the fact that they often operate

with tighter profit margins and have less pricing power than larger companies. Also, this theory

will help explain why SMEs absorb the costs and reduce their profits or pass on the costs to their

customers in order to cope with the rising cost of production, despite the fact that by doing so it

could make their products or services less competitive.

The Transactional Theory of Stress and Coping, proposed by Lazarus and Folkman

(1984), asserted that a person's capacity to adapt and adjust to difficulties and issues is a result of

transactions (or interactions) between a person and their environment. According to this theory, a

person's coping mechanisms could be influenced by his or her own resources or environmental

resources. Thus, small and medium-sized enterprises either utilize their own resources or find

alleviation to overcome every challenge and survive in the inflationary crisis. Additionally, this

model categorizes coping techniques into two groups: problem-solving strategies and emotion-

focused strategies. Problem-focused strategies focus on finding a solution to a problem, while

emotion-focused strategies focus on the use of emotional resources in coping with the problem.

Suppose participants use the support and assistance from the government grants or other

solutions namely: raising prices, laying off workers, or modifying products to find a solution to

their problems. In that case, their coping strategies will be classified as problem-focused in
relation to this theory. Meanwhile, if the participants depend on their personalities,

characteristics, and behaviors to get through the challenges they are facing, their coping

strategies will be classified as emotion-focused in relation to this theory.

In this study, the three theories were applied to understand both the struggles and coping

mechanisms employed by SMEs. As to the Transactional Model of Stress and Coping developed

by Lazarus and Folkman (1984), it is inherent in human beings to exert hard work in order to

survive in all we do especially due to the fact that challenges are inevitable, which forces a

person to really find a way to overcome them. Therefore, SMEs can manage to cope with

whatever challenges they face along their journey and as the battlefield gets tougher. On the

other hand, the Demand Pull Theory of Keynes (1883-1946) and Cost-Push Inflation Theory

of Alban William Phillips (1960) served as a vision board as to what SMEs may experience in an

inflationary environment and how far the inflationary tide affects them. Furthermore, the demand

pull and cost push theories could assist SMEs in coping with the detrimental effects of demand

pull and cost push inflation, guiding them in setting themselves up for success even in an

inflationary crisis

Statement of the Problem

This study aimed to determine the struggles and coping mechanisms of SMEs on

inflation. It sought to answer the following:

1. What are the struggles encountered by SMEs due to inflation?

2. What are the coping mechanisms employed by SMEs to address inflation?

3. What forms of support do they need from the government to help them overcome

struggles due to inflation?

Significance of the Study

The findings of this study are considered to be significantly beneficial to the following

persons and entities:

Department of Trade and Industry (DTI) Officials. The findings of this study will

help DTI officials in a way that will lead to the crafting of policies and implementation of

programs that will provide support to SMEs to survive and thrive during an inflationary crisis.

Specifically, this study aims to assist DTI officials in organizing workshops and programs to

educate SMEs on prudent pricing practices, discourage the haphazard increase of product prices,

and deter inventory hoarding. Additionally, it seeks to facilitate access for SMEs to working

capital loans and other best and most effective practices or coping mechanisms that they can

adopt or apply which will enable them to survive in an inflationary environment. The results will

enable SME owners to distinguish between effective and ineffective practices, enhancing their

ability to operate more efficiently and effectively in their business endeavors. Specifically, they

will be empowered to identify and implement strategies that prove successful in navigating the

challenges posed by inflation, while avoiding practices that may prove counterproductive. This

knowledge will contribute to the resilience and sustainability of their businesses in the face of

economic fluctuations.

Administrators of Business Schools. The findings of this study can be useful to the

administrators of business schools because it can help them provide education that aligns with

current economic conditions, can integrate the new body of knowledge into the curriculum, and

use this research to tailor their entrepreneurship programs which can help shape a new generation

of agile and resilient entrepreneurs.

 Aspiring Business Owners. The findings of this study will equip new business owners

with essential knowledge to navigate inflationary challenges. Moreover, it will offer guidance on

effective pricing strategies, optimizing inventory management, and implementing targeted sales

promotions to mitigate the impact of inflation on their ventures.

Researchers. The study will greatly benefit the researchers because the new knowledge

gained out of the findings of the study can be added to the existing body of knowledge which

later on can be made available to the researchers for possible conduct of a similar study or even

an expanded study involving more variables and respondents coming from other regions of the

country.

Scope and Limitations of the Study

This study focused on the struggles of the lived experiences of small and medium-sized

enterprises during inflation and the mechanisms they adapted or developed to cope. The

participants only included fifteen (15) SME owners aged eighteen to sixty (18-60) in Digos City

that have been operating for not less than two years. Small and medium-sized enterprises and

businesses under two (2) years of operation were not included. This was carried out to ensure

that the participants have sufficient knowledge and experiences of the difficulties brought on by

inflation. SMEs outside Digos City were not included because of the limitations of the

researchers in terms of money, time, and other resources. This study was conducted throughout

the academic year 2023-2024. The period of this study started from the moment that data were

gathered until the findings were shared back to the participants of the study. Lastly, no statistical

analysis was employed in this study.

Definition of Terms

In order to easily and correctly understand the various terms used in this study, they were

technically and operationally defined as follows:

Coping mechanism refers to an adaptation to environmental stress that is based on

conscious or unconscious choice and that enhances control over behavior or gives psychological

comfort. In this study, it pertains to methods and techniques employed by SMEs to effectively

tackle the challenges and stressors arising from inflationary pressures.

Inflation refers to a rise in prices, which can be translated as a decline of purchasing

power over time. In this study, it refers to the fluctuating price level of goods and services in an

economy and fall in the purchasing value of money which are experienced by the participants of

the study that causes them to struggle.

Small and medium-sized enterprises refer to businesses that maintain revenues, assets

or a number of employees below a certain threshold. In this study, it refers to an enterprise that

has been operating for more than 2 years, has 10 to 99 employees and has assets of Php

3,000,001–15,000,000 if it is small, and has 100-199 employees and has assets of Php

15,000,0001–100,000,000 if it is medium.

Struggles refer to experiencing difficulty and making a great effort in order to do

something. In this study, it pertains to the difficulties and challenges experienced by the

participants of this study caused by the increase in the general price level of goods and services

in an economy and the fall in the purchasing value of money.

 CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This section features the related literature, readings and studies that are relevant to the

study. The review provides insights into the veracity of the research problem. It starts by

discussing the struggles of the small medium enterprises followed by the coping mechanisms

employed by the SMEs and support provided by the government.

Struggles of SMEs on Inflation

The world economy was hit hard by severe upheavals such as the COVID-19 crisis, the

Russia-Ukraine war, and supply bottlenecks such as the Suez Canal blockage, which aggravated

the demand-supply imbalance and formed the perfect storm for soaring inflation. These

disruptions negatively affect different businesses around the globe, and small and medium

enterprises are one of the businesses that is gravely affected (Shinozaki & Rao, 2020). In

general, SMEs are the most vulnerable group in a prolonged economic crisis and suffer

excessively because of their limited potential for downsizing, business diversification, poor

financial structure, limited market, and technology access, and being heavily dependent on

external financing (Karadag, 2016). All these economic crises resulted in higher inflation which

created either a direct or indirect impact on the SMEs' struggles in the continuation of their

business activities (Arktuk, 2014).

In the present economy, SMEs are facing tremendous challenges and threats in their

survival in an inflationary environment. Akturk (2014) identified three key challenges that
SMEs

have experienced with high inflation, namely decline in the demand for the products and

services; low utilization rate of production capacity; and financial difficulties, working capital

and liquidity problems.

Decline in the Demand for the Products and Services. The decline in disposable income

of people due to the rise in inflation severely affects their demand for products and services. This

shrinkage of global demand is also one of the root causes of the challenges faced by new and

existing small and medium sized businesses (Akturk, 2014). According to a study conducted by

Lakshila (2022), price hike-ups, shortages in cooking gas and kerosene oil, lengthy power cuts,

and shortages in the supply of many raw materials increased the cost of production, the reduction

of operating hours, increased input prices, caused shortage of inputs, and caused no increase in

wages, drastically decreasing the purchasing power and standard of living of Sri Lankan people.

Moreover, the rapid depreciation of a country’s currency also decreases a person's purchasing

power and standard living, which also causes their demand for products and services to spiral

downwards (Akturk, 2014).

Low Utilization Rate for Production Capacity. Low utilization rate of production

capacity hurts SMEs. According to Corporate Finance Institute (2022), low utilization rate of

production capacity results in a decrease in the price of their products and services because there

is excess capacity and insufficient demand for the output produced. This leads to a number of

problems such as higher cost per unit resulting in the business to lose profit because they are

forced to decrease their markup to make up with the increase of production and lower demand

(Akturk, 2014). According to Akturk (2014), a sharp drop in the utilization rate of production
capacity occurred in Turkey during the crisis due to a shortage of raw materials, financial

hardship of SMEs, and a lack of consumer demand, which led to the layoff of workers, resulting

in a decline in capacity utilization rate.

Financial Difficulties, Working Capital, and Liquidity Problems. Financial difficulties,

working capital, and liquidity problems are among the most common struggles of SMEs. Piette

and Zachary (2015) show that SMEs face higher risk and tighter credit conditions during the

crisis. In relation to this, SMEs face hardships mostly in the financial sector during a crisis

because of increase in interest rates in banks, a decrease in re-borrowing facilities, difficulties in

collecting their receivables and paying their debts, and a worsening of credit conditions (Akturk,

2014; Karadag, 2016). According to a study conducted by Shinozaki and Rao (2020), SMEs

lacked the funds necessary to maintain their business, which is caused by the absence of sales

due to temporary closure of business, disrupted supply chains and being unable to operate due to

delays in the delivery of products and services. Moreover, it was also found that the magnitude

of the struggles caused by inflation was more serious in young SMEs (Shinozaki & Rao, 2020).

The top ranked concern among SMEs was a lack of working capital, which was more serious

among smaller firms, and young start-up SMEs faced a more serious lack of funds (Shinozaki &

Rao, 2020).

Among the major concerns about persistently high inflation is a decline in the business

world caused by different hardships. A study conducted in Sri Lanka about the impact of

economic crisis and survival of SMEs found that high SME failure rate and low growth rate were

reportedly caused by the striking inflation of the country, which creates a vulnerable situation for

the SMEs (Sriyani, 2022). Besides, the red-hot inflation which caused small businesses to
struggle, is all about how inflation is becoming increasingly inescapable as strong consumer

demand and a hot labor market continue to drive the surge (Beeson & Noone, 2022).

Coping Mechanism of SMEs on Inflation

Inflation is a macroeconomic concern which SMEs should overcome to keep the business

afloat. According to Camberato (2022), inflation is a reality individuals continually have to deal

with and the best course of action is to decide how they will cope with this hurdle in their

business. Every industry is impacted by inflation differently, hence, the type of business they

have will play a part in how it affects them (Oliveros, 2022). Small businesses may plan for the

impact of inflation in terms of industries, consumers, and workforces by understanding how it

will influence their industry (Oliveros, 2022). Small business owners who are aware of the

repercussions can make appropriate preparations to deal with the potentially damaging effects of

inflation (Lynch, 2022). Several firms make investments in systems like automated accounting

software and hybrid work programs that reduce expenses and increase productivity during

inflationary periods (Lynch, 2022).

Although business owners cannot eliminate inflation, there are various approaches they

can employ to fight inflation. According to Wade (2022), small business owners are having a

very tough time figuring out how to absorb these price hikes and how long they will remain. To

combat the consequences of inflation, Hummel Group, (2022) have enumerated a list of

strategies to cope with inflation namely:

Raising Pricing. The first thing that most small business owners do when inflation

becomes an issue is to raise their prices. According to Liston (2021), raising prices is the

quickest and simplest approach to increase your revenue. However, Hummel Group (2022)

stated that business owners might not be able to raise rates much without losing clients to rival
businesses. To prevent losing many customers, AVISO Valuation and Advisory (2022)

suggested that the company should research and analyze its competitors and use their rates as a

benchmark before raising the price. According to Sebastian (2022) effective price hikes often

include free services and product packages as additional features. Enhancements, bundling, de-

bundling, or branding that increase the uniqueness of goods or services will justify price

increases (AVISO Valuation and Advisory, 2022).

Raising prices increases your profit margin. Assuming that sales stay the same, raising

the prices of the goods and services while keeping costs in check, an increase in profit will be

noticeable (Liston, 2021). Similarly, Gardner (2022) stated that by pricing your services higher

you can gain a premium position in the market.

Laying Off People. Laying off people is never a pleasant task but it is used as a coping

mechanism by SMEs in dealing with the economic crisis. Some reduction in employees is

inevitable, and you may need to lay some staff off if your profits are suffering (Hummel Group,

2022). As stated by Kokemuller (n.d.), laying off workers will keep the business afloat and

contribute to its development by putting many devoted hands to work. So as production cost

pushed up this cost their sales to drop tremendously resulting in retrenching their employees as

the case worsened (Halder, 2022). When inflation rises, it profoundly affects small business

owners and their employees. In periods of high inflation, workers’ take-home pay is lower than it

would be in more normal circumstances (Pohl, 2022). As a result, many workers seek new jobs if

their previous employer doesn’t raise their pay to align with rising costs. As it is harder to retain

employees, SMEs should focus on investing in their employees (Pohl, 2022).

Modifying products. Product modification is another way of coping with inflation. A

product's market could be increased through functional changes that make it more useful to a
larger audience, according to a July 2022 “Chisel Glossary” article. This change may improve a

product's position in the marketplace. Modification of the factors in a product such as the looks,

smell, sound, taste, or texture can significantly impact sales. On the other hand, some customers

will see this change as less appealing.

During periods of inflation is a suitable time to think about what they could do to

diversify the revenue as a hedge against inflation, some pursue to innovate new products to

attract new customers and keep existing customers coming back. Product bundles can do a lot to

add to the perceived value of what they are selling. The same is true with services. Adding a new

service, or augmenting an existing service, can do a lot to increase the service’s value and make

customers willing to pay a higher price.

Digital Transformation. According to Doaca (2022), digital transformation, in a nutshell,

is the practice of utilizing technology to enhance corporate operations and provide fresh value for

clients. Using digital technologies, digital transformation develops new or enhanced procedures,

goods, or services. There are several methods for businesses to accomplish this, including

developing a new website or mobile application, moving to the cloud, or employing data

analytics to enhance decision-making. This transformation initiative can help Businesses in a

variety of ways. The ability of digital transformation to assist SMEs improve operational

efficiencies is one of its primary advantages. Increasing profitability, decreasing costs, enhancing

consumer engagement, and staying ahead of the competition are further advantages (Kostelnik,

2022).

Cut Back Marketing. When money is tight, it is common for small business owners to

cut back on marketing to save money. It might seem logical, but it is not a good idea to cut your

marketing budget in inflationary environments. The solution is to continue marketing and use
strategies that will help business persons attract new customers even with higher prices. The

right financing options can be a lifeline during inflation. With financing in place, they can afford

to pay more for raw materials or products, and they may be able to avoid undesirable outcomes

such as laying off employees. It might be difficult to engage in strategic thinking if they are

worried about losing the business, financial forecasting can help them be strategic during an

inflationary period because it allows them to think through multiple scenarios before they occur

(Kane, 2022).

Keeping Watch on Cash Flow. Keeping careful watch on cash flow is particularly

important when inflation is an issue. If the expenses are increasing and losing sales or customers

this may affect the business, it may need appropriate action quickly. In order to overcome this,

business persons need to be watchful of their expenses or ask for lower prices of service

providers or suppliers, not only that, analyze their business and look at which sales are most

profitable. They need to look at their business objectively and look for other ways they can cut

costs and increase sales and cash flow without cutting corners that will alienate customers

(Attard, 2022).

Diversifying Vendors. The best way to lower the supply chain risk is by diversifying

across multiple vendors. According to Camberato (2022), if they are overly reliant on one

vendor, they will have fewer options when it comes to price increases. But by diversifying, they

have the opportunity to look for alternative products and materials. Blumberg (2021) states that

diversification helps organizations build more strategic relationships and provides benefits in

several areas, stretching from cost savings to talent management.

Leveraging Technology. Another way to deal with inflation is by leveraging technology

to automate as many repetitive tasks and processes as possible. Leveraging technology does not
have to be complicated — there are numerous apps available to help them manage things like

bookkeeping, customer management and marketing. By leveraging technology, they can

accomplish more in their business while spending less and freeing up their time as well as their

employees' in able to focus on higher-level problems. They are not the only one feeling the

effects of inflation. Employees are feeling it, too, as they pay more for everyday items. But as

inflation rises, employees may also expect their salaries to rise (Camberato, 2022).

Government Support

As the global economy continues to suffer from a global recession, SMEs face numerous

challenges in staying afloat. The continuing rise of inflation due to recession increases the risk of

business failure and bankruptcy, especially for SMEs that have trouble accessing formal

financial services or government support (Asian Development Bank, 2017). Credit utilization is

among the most common remedies used by SMEs when faced with lack of finance due to an

economic crisis, yet, SMEs face major challenges in accessing cheap finance, mainly because

there is an asymmetric information problem between suppliers and demanders of funds, which

hinders their growth (Yoshino & Taghizadeh-Hesary, 2017).

The high cost of finance hinders SMEs’ access to credit and this is where policy makers

come in. The role of the government during an inflationary crisis is to intervene in policy, so the

government must provide equal public needs for all people and enterprises (Rosa, 2019). Based

on the study findings conducted by Shinozaki (2022), there are several policy implications that

help SMEs in an economic crisis, namely: providing business development services, mentoring

support, and skills development training for workers; promotion of the use of technology in

operations; diversify alternative financing options and provide growth capital for business; and

providing tax reliefs to support SMEs.

 Providing business development services, mentoring support, and skills development

training for workers. SMEs are most concerned about a reduction in domestic demand due to the

continuing economic dilemma. This causes a decrease in consumer spending, which lowers sales

for SMEs and exposes them to financial risk and can make it difficult for these businesses to

cover expenses and maintain operations (Laker, 2023). Hence, improving firm competitiveness is

crucial for creating demand for their products or services, surviving, and growing throughout an

inflationary crisis (Shinozaki, 2022). Company development and advisory services, mentorship

and business literacy programs, tax education/incentives, and worker skill enhancement training

are also essential because they not only help SMEs during inflation, but they also contribute to

the creation of a stable foundation of high-quality jobs across the country (Shinozaki, 2022).

Another way the government can help provide support to SMEs is by encouraging

training and upskilling. This can be done by reducing training costs — such as tax incentives

and subsidies — and promoting workplace training via employer’s networks and associations, or

intermediary brokers, apprenticeships programmes or by pooling training investments, and

strengthening management skills in SMEs through training, workshops, coaching programmes

and by raising demand for these programmes (OECD, 2021).

Promotion of the use of technology in operations. Digital transformation and use of

technology in operations bring many significant benefits for firms. And with the rising costs

brought about by the economic crisis which can strain SMEs, digital transformation would help

SMEs improve their productivity in an inflationary environment by lowering output costs and

allowing companies to deploy manpower more effectively (Dale et al, 2022).

One of the ways governments are boosting SMEs digital transformation is by scaling up

internal capacity. Based on a study conducted by the Organization for Economic Co-operation
and development (2021), the government can help scale up internal capacity to boost digital

transformation by providing SMEs with technology, support and assistance. This can be done

through targeted financial support, technology extension programmes or a mix of both. In

addition, building a data culture in SMEs can also promote digital transformation and increase

the use of technology in operation by increasing awareness and capacity to manage and protect

their data. Raising the digital security profile of SMEs, through awareness campaigns, or

providing them with guidance on useful digital security measures, toolkit, auditing, assurance

framework, protocols and certification schemes, and training opportunities.

Diversify alternative financing options and provide growth capital for business. Lastly,

finance is critical for business development. Working capital shortages were a major concern for

SMEs to survive (Shinozaki, 2022). Hence, government supported financial assistance will

gradually improve SMEs’ access to bank credit and more diversified financing options should be

developed to fulfill their unmet financing needs, which would include further development and

dissemination of digital financial services (OECD, 2014).

Many governments across the globe launched emergency concessional loan schemes,

special funds, and refinancing facilities to encourage SMEs to access new loans during the crisis.

Cambodia established a new public bank for SMEs. A study conducted by Shinozaki and Rao

(2021) discovered the different forms of government support across Asia. In Malaysia, they

established a special relief facility for working capital financing for SMEs. Also, in Myanmar

they created a fund to finance affected SMEs and sectors such as tourism with concessional

interest rates of 1%. Moreover, Thailand and Viet Nam launched soft loan packages for SMEs

with lower interest rates. Japan, on the other hand, provided largely zero interest rate loans and
full credit guarantees to SMEs facing a sharp decrease in sales. Similarly, Malaysia and the

Republic of Korea offered special credit guarantees to affected SMEs.

Providing tax reliefs to support SMEs. Tax relief is an integral part of economic

stimulus programs across different nations around the world, where corporate tax reductions and

exemptions, as well as delayed payments, are the primary sources of support for SMEs

(Shinozaki & Rao, 2021). Indonesia gradually reduced its corporate income tax to 22% in 2020

and 2021, and 20% in 2022, focusing mostly on manufacturing (Shinozaki & Rao, 2021).

Malaysia, Myanmar, and Singapore allowed SMEs' deferred (for three months) corporate income

tax payments (PwC Indonesia, 2020). In addition, Singapore offered corporate tax rebates to

SMEs (Premia TNC, 2023). For industries including transportation, catering, hotels, and tourism,

the PRC permitted loss carry-overs of up to eight years (Shinozaki & Rao, 2021).

According to Shinozaki and Rao’s (2021) study, the payment of value-added tax (VAT)

by companies was also reduced or exempted in many countries such as Indonesia, Malaysia,

China, Singapore, and Viet Nam. Shinozaki and Rao’s study mentioned that the

aforementioned countries also provided various tax holidays or tax breaks for businesses and

some sectors, especially small business owners and the self-employed. In relation to this, in

Indonesia, hotels and restaurants in major tourist destinations, such as Bali, enjoyed temporary

suspension of tax payments for six months, while the central government compensated local

governments for the resultant tax revenue losses (Shinozaki & Rao, 2021).

Shinozaki and Rao's (2021) research reveals a widespread trend in numerous countries,

including Indonesia, Malaysia, China, Singapore, and Viet Nam, where companies experienced

reduced or exempted payments of value-added tax (VAT). The study also highlights a broader

approach taken by these countries, involving the implementation of tax holidays and breaks,
particularly aimed at benefiting businesses, small business owners, and the self-employed. In the

specific case of Indonesia, hotels and restaurants situated in major tourist destinations, such as

Bali, enjoyed a temporary six-month suspension of tax payments. Notably, the central

government undertook the responsibility of compensating local governments for the resulting

loss in tax revenue. This collective effort reflects a comprehensive strategy employed by these

nations to alleviate financial burdens on businesses, promote growth, and navigate the economic

challenges posed by the global circumstances, as outlined in Shinozaki and Rao's study.
 CHAPTER III

METHODS

This chapter of the study presents the processes and procedures that were implemented in

the study. It first provides a comprehensive overview of the research design that was employed,

then it discusses the participants of the study and its criteria for inclusion and exclusion, followed

by the sampling techniques utilized to select the number of participants for the study.

Additionally, this chapter outlines the systematic procedure used by the researchers in gathering

the data. Lastly, this chapter ends by discussing the data analysis techniques that was utilized in

analyzing and interpreting the data.

Research Design

This study employed a Descriptive-Qualitative research design using a phenomenological

approach. This design describes the experiences, insights, feelings, or responses of human beings

to a particular phenomenon without biases or preconceived assumptions (Deakins University,

2021). This study examined the subjective experiences of SMEs during an inflationary crisis and

how they cope with the corresponding struggles they have encountered. Hence, this research
design is most appropriate since it aims to explore and provide deeper insights into real-world

problems (European Journal of General Practice, 2017). Using the phenomenological approach,

the researchers were able to comprehend the struggles and coping mechanisms utilized by the

participants which are all essential in understanding the problem of the study.

Participants of the Study

The participants of the study were fifteen (15) small and medium enterprise owners in

Digos City who have been operating for not less than two (2) years. According to Creswell and

Creswell (2018), the setting of ten to fifteen (10-15) participants in conducting a qualitative

study through a phenomenological approach would raise the validity and reliability of the results

of the study and is adequate to saturate enough information. The following SMEs that were

chosen as our participants were based on the following criteria: First, the participant must be a

small or medium enterprise owner in Digos City. Second, the small or medium enterprise must

be operating for more than two (2) years. This ensures that the participants have adequate

experiences and exposure to an inflationary environment. Lastly, the small or medium enterprise

must have 10 to 99 employees and has assets of Php 3,000,001–15,000,000 if it is small, and has

100-199 employees and has assets of Php 15,000,0001–100,000,000 if it is medium. This is in

conformity with the present structure of SMEs according to R.A. No. 9178, otherwise known as

Barangay Micro Business Enterprise (BMBE) Act of 2002.

The exclusion criteria were based on the following circumstances: (1) those SMEs who

have met the inclusion criteria but do not have an interest to take part in our research study; (2)

those SMEs operating for less than two (2) years – the reason for this is they might not be

qualified under the criteria of having experienced being in an inflationary environment; (3) those
SMEs that consist of less than ten (10) employees; and (4) those SMEs that have assets of less

than Php 3,000,000. The reason for the third and fourth exclusion criteria is that they might not

be qualified under the criteria of SMEs under R.A. No. 9178.

Sampling Procedure

In identifying and selecting the participants of this study, the researchers utilized two

non-probability random sampling techniques, the Purposive Sampling Technique and the

Convenience Sampling Technique. The purposive sampling technique, also called judgment

sampling, is the intentional selection of a participant based on the qualities of the participant

(Palinkas et al, 2016). This sampling strategy was used to carefully choose participants based on

the judgment of the researchers, with the assumption that each participant was to contribute rich

information valuable to the study. More specifically, it is a type of non-probability sampling

technique in which the researchers make decisions about which individuals to include in the

sample based on a number of criteria such as specialist knowledge of the research problem, or

capacity and willingness to participate in the research (Rai & Thapa, 2015).

Moreover, Incidental Sampling Technique or Convenience Sampling (also called

accidental sampling or grab sampling) is a method of non-probability sampling where

researchers choose their sample based solely on convenience (Simkus, 2023). This means that

researchers have the autonomy to choose the respondents convenient to them, as provided by

their relation to the respondents that may either be personal or social (Etikan & Bala, 2017). By

utilizing these sampling techniques, the opportunity to select a participant who can offer
significant and valuable information to the study aids in maximizing the collection and analysis

of data.

Data Collection

In order to successfully gather the needed data, the following processes and procedures

were faithfully followed and observed. First, the researchers presented this research proposal to

the members of the research panel for review and enhancement. Second, the researchers

forwarded a letter of request to conduct the study. Once the letter is approved, the next step

would be to gather a list of the small and medium enterprises registered in Digos City at the

Business Bureau. The researchers then identified the qualified SMEs based on the given criteria

discussed in the previous part of this chapter. When the number of qualified participants were

determined, the next step was to filter out the number of SMEs by identifying the nearest and

most available SMEs until the desired sample size of this study is reached. Third, after

determining the participants, the researchers asked permission from the chosen SMEs through

sending letters in order to conduct the study and gather data. After securing the approved letters

from the chosen SMEs, the date, time, and platform used for the study were set with the

suggestions of the participants. Fourth, the researchers then conducted an interview with the

SME owners or managers based on the agreed date, time, and platform. After all the participants

are interviewed, the researchers transcribe the interview and organize the data. The findings of

the data were then reported, and the researchers formulated conclusions and recommendations

based on the study’s data. Lastly, the findings of the data were given back to the participants for

the information on the outcome of the research and for their validation and to impart knowledge

for future enhancements and to the future researchers among the ton.
Data Analysis

The researchers utilized the Colaizzi (1978) method or the Thematic Analysis in analyzing

the data. The Thematic Analysis allows an understanding of the potential of any issue more

widely (Marks & Yardley, 2004). It enables the researchers to formulate meanings from the

participant's statement to develop emergent themes and interwoven relationships. The themes

were identified from the essential or interesting patterns in the data and to address the research

problem (Maguire & Delahunt, 2017). Using Thematic Analysis made it possible to relate the

various concepts and opinions of participants and compare them with the data that were gathered

in different situations at different times from other or the same participants during the conduct of

the study.

As cited in Morrow et al. (2015), Collaizi’s (1978) seven-stage process ensured a

thorough examination that stayed close to the facts and to the data. The following seven steps

represented the Colaizzi processes which provide a detailed analysis, with each step staying close

to the data: (1) The researchers themselves familiarized himself/herself with the data, by reading

through all of the participants' accounts several times to obtain general senses about the whole

content; (2) For each transcript, the researchers shall identify significant statements that are

directly relevant to the phenomenon under study and extracted it; (3) The researchers formulated

meanings that arise from careful consideration of the significant statements; (4) The researchers

clustered the identified meanings into themes that are common across all account; (5) The

researchers developed a full and inclusive description of the phenomenon, incorporating all the

themes that were produced; (6) The researchers described the phenomenon's fundamental

structure and; (7) Finally, the researchers returned the fundamental structure statements to all

participants to verify whether they accurately reflect their experiences.

Data Sources

The researchers utilized both secondary and primary sources. Primary data sources

included Key Informant Interview (KII) while secondary data sources mainly covered existing

Related Literature (RL).

Key Informant Interview (KII) involves an in-depth interview with selected individuals

likely to provide important information, ideas, and insights on a particular subject (Kumar,

1989). KII resembles a casual conversation among participants, allowing for a free exchange of

ideas and information. Moreover, KII is a qualitative, in-depth interview of at least 15 people

selected for their first-hand knowledge about a topic of interest. The interviews are loosely

structured, relying on a list of issues to be discussed. Key informant interviews resemble a

conversation among acquaintances, allowing a free flow of ideas and information. Interviewers

frame questions spontaneously, probe for information, and take notes, which are elaborated on

later (USAID, 1996).

The study also used secondary data or Related Literature (RL) which covered different

sources and provides an essential preparation for the interviews. RL involves the systematic

identification, location, and analysis of documents containing information related to the research

problem (Shi, 2006). It surveys scholarly articles, books, and other sources relevant to a

particular area of research (Bloomsburg University, 2023). Using RL as a secondary source of

data helps to cross-check official information, and learn about major events, technical details,

historical decisions, and main organizational players and roles. Furthermore, it supported the

exploration of particular responses during interviews.

Trustworthiness
 Trustworthiness refers to the degree of confidence in the data, interpretation, and methods

used to ensure the quality of a study (Stahl & King, 2020). Ensuring the trustworthiness of this

study is one of the concerns that the researchers will consider. The criteria presented by Lincoln

and Guba (1985) were accepted by many qualitative researchers and will be the focus of this

segment. These involve establishing credibility, transferability, dependability, and

conformability.

Credibility. Credibility in qualitative research concerns the truthfulness of the findings of

the study (Ary et al, 2010). The credibility of the study is the most important criterion in

establishing trustworthiness and is the confidence in the truth of the findings (Fansworth, 2023).

In order to achieve credibility, the researchers will use peer debriefing. Lincoln and Guba (1985)

defined peer debriefing as a process of exposing oneself to a disinterested peer in a manner

paralleling an analytic session and for the purpose of exploring aspects of the inquiry that might

otherwise remain only implicit within the inquirer's mind. Peer debriefing allows a qualified peer

researcher to review and assess transcripts, emerging and final categories from those transcripts,

and the final themes or findings of a given study (Janesick, 2015). The researchers allowed a

qualified, impartial colleague who has no personal interest in the project to review and assess the

study’s transcripts, methodology, and findings. The next technique utilized was the member-

checking method since it establishes credibility and trustworthiness. Participant authentication

involves sharing a summary of the findings with the research participants. The researchers

evaluated which includes checking the data, interpretations, answers, and conclusions with the

research participants themselves. Additionally, participants will be given a chance to clarify or

correct what they have said in the interview (Lincoln & Guba, 1985).
 Transferability. Transferability refers to how qualitative findings can be transferred to

or have applicability in other settings or groups (Polit & Beck, 2014). This research aims to

guide future researchers who plan to study a similar phenomenon. In promoting transferability,

the conclusions of this study shall be based on the results established from the information given

by the participants. Thus, the researcher observed Shenton's (2012) suggestion to provide a

detailed, sufficiently thick description of the phenomenon under investigation to allow readers to

properly understand it by citing various authors to present the phenomenon in several fields.

Dependability. Dependability refers to the degree of consistency, reliability, and

stability of findings and interpretations throughout the research process. It emphasizes the

researchers' ability to establish and maintain confidence in the accuracy of the study (Guba,

2018). In other words, dependability is an evaluation of the quality of the integrated processes of

data collection, data analysis, and theory generation (Lincoln & Guba, 2016). To fortify the

dependability of the study, the researchers undertook several crucial steps. These included

conducting a peer review to obtain external feedback and engaging in member checking, a

process that involved participants in the validation of results. These measures were implemented

with the aim of ensuring the accuracy and reliability of the study's findings and interpretations.

Confirmability. Confirmability is the degree to which findings are consistent and

repeated and results could be confirmed or corroborated by others. This is analogous to

objectivity in qualitative research (Stahl & King, 2020). The researchers gathered the necessary

information for the study, assuring the confidentiality of participants' responses and documents

during the interview. Furthermore, the researchers documented the procedures for checking and

rechecking the data throughout the study. Objectivity is guaranteed in the translation. Hence, a

thorough description of how the data gathering went, especially what happened during the actual
interview, was provided. This present study is a comparable model for ensuring trustworthiness

with the applied measures.

Ethical Considerations

Ethical consideration is vital in doing a research study for the protection of human subjects

(Saunders & Thornhill, 2012). Considering that this study is qualitative research utilizing an in-

depth interview with SME owners or managers in order to investigate their personal experiences

concerning their issues and coping mechanisms on inflation, the researchers considered the

preservation of the participants' privacy. Furthermore, the researchers acknowledged that some

participants have varying emotions when reliving their experiences and that the interview session

may have a detrimental influence on some of them. With this, the researchers made changes to

the interview sessions that would respect the participants' rights and make them feel at ease.

Additionally, as qualitative researchers, they considered the anonymity, confidentiality, and

informed consent of the participants: the three considerations that have been mentioned must

always be considered by qualitative researchers (Petrova et al, 2016).

Anonymity. Anonymity refers to data collected from participants who are completely

unknown to anyone associated with the interview (Kennedy, 2008). This is done in order to

protect the identity of the participants (Walford, 2006). In order to preserve anonymity, the

information given by participants would be restricted and concealed from individuals other than

the researchers. To maintain the study’s anonymity, pseudonyms were used to encode the

participant’s names instead of revealing their actual names. To further preserve anonymity, no

account were the names of the participants mentioned during the entirety of the interview process

and audio recording.

 Confidentiality. Confidentiality pertains to protecting the participant’s personally

identifiable data. This is achieved by not disclosing the personal information of the participants

in the study (Holland et al, 2019). To uphold confidentiality, the researchers did not disclose the

participant's personal information without their consent, such as name, age, and gender. The only

information disclosed were the data analyzed in the manuscript. Furthermore, the data were kept

in a Google Drive folder that can only be accessed by the researchers and the participants

themselves and only after 5 years would the data be discarded.

Informed Consent. Informed consent is a constant dialogue between the researcher and

the participant to ensure the participant’s comfort (Owens, 2010). The informed consent shall

include the potential risks and benefits of the participants' participation so that the participants'

discretion as to whether or not they will take part in the study is at their disposal (Oxford, 2021).

Before conducting an interview, the researchers provided each participant who agreed to take

part in the research study with an informed consent form. The said form contained the purpose of

the study, potential risks and benefits, desired data, date and length of the interview, information

recording, consent, means of interview, ethical considerations, and clarifications regarding their

voluntary agreement as well as their right of withdrawal as our research participant.

 CHAPTER IV

RESULTS AND DISCUSSION

This chapter deals with the results of the study. It begins with the discussion of the

struggles of the small-medium enterprises during an inflationary crisis followed by the

discussion on how they cope with the struggles they have faced. The forms of government

support that the small-medium enterprises would need is also presented and discussed. The

chapter concludes with a discussion of the implications of the study that could help the small-

medium enterprise owners to lessen their struggles as they face inflationary crisis.

Struggles of Small-Medium Enterprises in an Inflationary Crisis

 Small-Medium Enterprises, dealing with the challenges brought on by an inflationary

crisis, are facing a range of significant obstacles. Owners of these SMEs are carrying a heavy

load of responsibilities, as they play a dual role - driving their business forward and making

crucial decisions in the midst of an inflationary crisis. This balancing act becomes even more

difficult due to the continuous uncertainty and rising costs. Navigating this complicated situation

demands a rare resilience from SME owners, as they are compelled to maneuver through the

unpredictable terrain brought about by an inflationary crisis. When SME owners who are the

participants of the study were asked on the struggles they had encountered in an inflationary

crisis, six (6) dominant themes emerged, namely: (1) Price Hike; (2) Loss of Customer; (3) Low

Income; (4) Slow Business Operations; (5) Employment Issues; and (6) Customer Complaints.

Price Hike. Among all the struggles faced by the participants, price hike during an

inflationary crisis was the most common answer, with eight (8) out of fifteen (15) participants

claiming to have experienced such struggle. Results in Table 1 shows that there were eight (8)

out of fifteen (15) participants who struggled with the price hike as indicated by increased prices

of raw materials, increased prices of commodities and decrease of customer’s buying power.

Table 1. Price hike

Formulated Meaning Emergent Theme
 Increased prices of raw materials
 Increased prices of commodities Price Hike
 Decrease of customer’s buying power

Price hikes are a significant challenge for small-medium enterprises (SMEs) during an

inflationary crisis primarily because inflation drives up the prices of raw materials, energy, and
other essential inputs for businesses, eroding profit margins for SMEs. In effect, participant A15

was forced to raise the prices of their laundry bundles due to the unanticipated surge in energy

costs. She said,

“Ang presyo namo katong crisis nitaas kay nag

add man pud gud among mdm sa bundle gani.” (A15)

(Rising input costs led to an increase in service prices during the crisis.)

While participant A15 grappled with the increasing energy prices, a similar situation

unfolded for participant A10. In her case, she faced the ongoing challenge of surging gasoline

prices, which subsequently led to a decrease in demand and a significant decline in the price of

steel—the very commodity they were selling. During the interview, she revealed that,

“So karon na sigeg taas ang gasolina,

nag sige pug bagsak ang presyo sa bakal.” (A10)

(With the continuous rise in gasoline prices, the cost of steel keeps dropping.)
The experiences and insights shared by participants A15 and A10 were similar to

participants A6 and A5, who noted that as commodity prices rise, they pass these higher costs

onto consumers through higher pricing for their products and services. Concurrently, owing to

the decline in consumer purchasing power, she said that consumers found themselves able to

purchase fewer goods and services with their income, thereby negatively affecting their business.

During the interview, participant A6 emphasized,

“Pag increase sa commodities and pag baba sa buying

power sa atong mga consumers.” (A6)

(The increase in the price of commodities and the

decrease in the buying power of the consumers.)

“Mag taas ang panalitonon kay magtaas pud mi.” (A5)

 (The surge in commodity prices resulted in an
increase in overall prices.)

Participant A2 encountered a similar situation, although in her case, the surge in input

costs resulted in a notable deceleration of their sales. The increase in input costs led to a

noteworthy slowdown in their sales, meaning that they were selling fewer products or services

than before. The higher input costs necessitated a price increase, which deterred some potential

customers and eroded profit margins. This change ultimately affected the pace at which their

products or services were being sold in the market. In the course of the interview, Participant A2

emphasized,

“Pagsaka sa presyo sa palitonon. Kay kung magsaka man

gud ang presyo sa palitonon mohinay pud ang pag
baligya namo ba. Lahi ra basta magsige siyag saka.” (A2)

(The increase in input caused sales to slow down.)

Loss of Customers. The second difficulty experienced and revealed by the participants

was customer loss. Results in Table 2 shows that there were seven (7) out of fifteen (15)

participants who struggled with the loss of customers. Based on the responses of the participants

presented in Table 2, the loss of customers was indicated by being forced to cater fewer

customers, customer attrition and customers seeking more affordable options from other stores.

Table 2. Loss of customers

Formulated Meaning Emergent Theme
 Forced to cater fewer customers
 Customer attrition
Loss of Customers
 Customers sought more affordable options from other
stores
 Small and medium-sized enterprises (SMEs) often grapple with the challenge of

customer attrition, some stemming from the necessity to reduce their supply volumes in response

to rising prices. This predicament hinders their ability to adequately fulfill market demands,

resulting in a notable decline in their customer base. During the interview, participant A7

struggled with loss of customers when she said that,

“Some of the challenges that this business faced or encountered

due to inflationary crisis are that the office supplies got pricey,
that we need to lessen the supplies and that affected
our service to our customer since we have to lessen the materials
and that’s why we need to cater lesser customers also.” (A7)

While participant A7 encountered a loss of customers due to a reduction in supply,

participant A9 reported customer attrition resulting from rising prices. Their customer attrition

was a consequence of increasing prices for their products or services. As their prices went up,

some of their customers found it challenging to afford what they were offering. This financial

constraint prompted some customers to seek more affordable alternatives or simply stop using

their services. This revelation emerged during the interview as she expressed that,

“Makuhaan ang mga customers tungod kay mahal na

ang pamaliton. Dili na kaayo maka-afford ang uban ug palit.” (A9)

(Customer attrition occurred as a result of price hikes,

rendering the products unaffordable for them.)

Participant A9's experience closely mirrored that of participant A11 and A15, as they

observed customers who could no longer afford their services due to an inevitable price hike. In

the case of participants A11 and A15, the decision to raise prices, driven by escalating expenses,

rendered their services unaffordable for certain customers and led them to seek more affordable

alternatives. They stated that,

“Sa pag taas sa among price naa juy uban

 na dili na jud kaya ang price so nangita silag mas barato.” (A11)

(As a result of the increase in prices, customers are no longer

able to afford the services and sought cheaper options.)

“Ang presyo namo katong crisis nisaka

so ang other customer nangita silag mas barato.” (A15)

(Customers seeked cheaper options due to the increase

in price of services offered.)

Participant A12 and A13 also grappled with customer attrition. In their case, they found

themselves having fewer people buying their products or services, leading to a decrease in

demand. Consequently, the decrease in demand had a direct impact on their sales figures, leading

to a notable decrease in revenue generation for their respective businesses. During the interview,

participants A12 and A13 struggled with customer attrition when they said that,

“Less jud ang customer karon. Less among pasyente, less pud
among income.” (A12)
(Less customers resulted in a decrease in income.)

“Kato mingaw jud kaayo. Ni baba pud among sales

ato asta among customers nangawala ang uban.” (A13)

(Fewer customers led to a decrease in demand,

negatively affecting sales figures.)

Low Income. The third struggle faced by the participants was having low income during

an inflationary crisis, with six (6) out of fifteen (15) participants claiming to have experienced

such struggle. As illustrated in Table 3, low income is indicated by unfavorable financial

conditions, experiencing financial loses when expenses go up, reduction in overall revenue,

decrease in revenue due to a decrease in the number of customers, and level of sales decrease.

Table 3. Low income

Formulated Meaning Emergent Theme
  Unfavorable financial condition
 Experience financial loses when expenses go up
 Reduction in overall revenue
Low Income
 Decrease in revenue due to a decrease in the number
of customers
 Level of sales decrease

SME’s struggle with keeping their business running because they experience a

combination of reduced revenue and increased costs, which leads to a decrease in income.

During the interview, participant A9 struggled handling the business when she said that,

“Dako pud siyag epekto sa amoa as small time business owner’s kay syempre one factor
nga because of inflation rate mugamay ang halin. Mugamay ang imohang halin or
mugamay ang imohang income but still ang imohang bayrunon, ang imong
expenses, labor, mga ing ana is steady lang gihapon.” (A9)

(Inflationary crisis exert a significant burden on

small business owners, as they experience a decline in income
while contending with stable or even escalating expenses.)

Participant A9’s experience paralleled that of participant A5, as both reported losses

attributed to the rising prices of raw materials. Participant A5 said that,

“Medyo malugi mi basta mutaas ang panaliton.

Pag mutaas ang panaliton na ginagamit
sa pagbuhat sa among mga baligya.” (A5)

(Experience losses as long as the prices of

raw materials are high.)

There were also instances where SMEs experienced a decrease in customers, leading to

substantial reduction in their income. When SMEs encounter a decline in customer numbers, it

not only impacts their sales but also directly affects their overall income. This experience was

articulated by participant A12, A13 and A14 when they remarked that,

“Less jud ang customer karon.

Less among pasyente, less pud
among income.” (A12)
 (Now, because we have fewer patients,
our income is also significantly reduced.)

“Kato mingaw jud kaayo. Ni baba pud among sales

ato asta among customers nangawala ang uban.” (A13)

(Fewer customers led to a decrease in demand,

negatively affecting sales figures.)

“Mura syag ni baba jud. Ni baba jud ang among

sales ato na time. Wala kaayoy mamalit mao to
ni baba mong sales, unya ni baba sad
ang amoang income.” (A14)

(The decline in sales, stemming from a reduction in the

number of customers purchasing products,
has resulted in a notable decrease in overall income.)

Slow business operations. The fourth difficulty experienced and revealed by the

participants was slow business operations. Results in Table 4 shows that there were five (5) out

of fifteen (15) participants who struggled with the slow business operations. Based on the

responses of the participants presented in Table 4, slow business operations are indicated by the

business being in a steep position, decrease in demand, shift in customer priorities and reduction

in sales.

Table 4. Slow business operations

Formulated Meaning Emergent Theme

 The business is in a steep position

 Decrease in demand Slow Business Operations
 Shift in consumer priorities
 Reduction in sales

During an inflationary crisis, businesses often find themselves in an uncertain position.

Businesses that find themselves in a steep financial position are particularly susceptible to even
the slightest increase in expenses. Such incremental changes can have a profound impact on their

financial stability. The escalating costs of inputs and operational expenses erode profit margins,

leaving little room for adaptation and growth during an inflationary crisis. During the interview,

participant A9 and A10 revealed how they struggled with slow business operations when they

said,

“Matagbaw kag huna huna ug paano nimo i-survive ang imohang

business kay of course, daghan ka ug challenges. Mugamay ang
imohang halin or mugamay ang imohang income but still ang
imohang bayrunon, ang imong expenses, labor, mga ing ana is steady
lang gihapon.” (A9)

(Difficulty in finding ways to alleviate the burden

of slow business operations coupled with low income
and increasing input costs.)

“So karon na sigeg taas ang gasolina, nag sige pud

ug bagsak ang bakal. Syempre mag bagsak ang bakal,
mag mingaw ang negosyo. Mingaw gyud ang tanan.
Ma feel gyud nako ang ka mingaw sa negosyo.
Mao nang mag bawas gyud ug tao.” (A10)

(With the continuous rise in gasoline prices,

the cost of steel keeps dropping which led to
slow business operations and lay off of workers.)

In the cases of participants A3 and A13, their pre-existing precarious financial positions

were aggravated by a decrease in consumer purchasing power, resulting in a significant reduction

in demand for their goods and services. This decline stems from consumers wrestling with

elevated higher living costs, prompting a shift in their priorities towards essential items,

consequently diverting spending away from non-essential goods and services. This combination

of elevated costs and diminished demand creates a challenging environment that hinders business

operations and growth.

“Ang mga guest namo diri kay nag lessen jud.

Lisod i-run ang business namo kay crisis man.
 Wala kaayoy naga check in.” (A3)

(Difficulty in running business due to the decline in customer

numbers, coupled with operational challenges arising from being
deemed non-essential.)

“Nagkahinay jud ang amoang business dri

kay dili man gud kasya known na paliton.” (A13)

(Slow business due to shift in customer priorities.)

Participant A2 shared a similar sentiment regarding sluggish business operations. In her

situation, the deceleration in business activities was primarily attributed to a surge in commodity

prices. During the interview, she disclosed,

“Kung magsaka man gud ang presyo sa palitonon

usually mohinay pud ang among pagbaligya.” (A2)

(Surge in commodity prices led to deceleration in sales.)

Retrenchment. The fifth difficulty experienced and revealed by the participants was

regarding retrenchment. Results showed that there were three (3) out of fifteen (15) participants

who struggled with retrenchment. As shown in Table 5, the struggle with retrenchment is

indicated by compromise of wages of employees and lay off employees.

Table 5. Retrenchment
Formulated Meaning Emergent Theme
 Compromise wages of employees
Retrenchment
 Lay off employees

To maintain financial viability during an inflationary crisis, SMEs have to make difficult

decisions to reduce strain caused by rising costs, which often involves laying off employees.

Several participants disclosed their experience of grappling with the difficult decision to reduce

their workforce as a response to rising costs. In the interview, participant A10 stated,
 “So karon na sigeg taas ang gasolina, nag sige pud
ug bagsak ang bakal. Syempre mag bagsak ang bakal,
mag mingaw ang negosyo. Mingaw gyud ang tanan.
Ma feel gyud nako ang ka mingaw sa negosyo.
Mao nang mag bawas gyud ug tao.” (A10)

(With the continuous rise in gasoline prices, the cost

of steel keeps dropping which led to slow
business operations and lay off of workers.)

The challenges faced by participant A10 closely resembled those encountered by

participant A15. However, in her situation, she had to make compromises regarding employee

wages stemming from reduced work days for each employee. During the interview, she disclosed

that,

“Na apektohan among pag sweldo, nadungagan

ang rest day, ug nakuhaan ang adlaw sa pag duty.
Naay uban tag 3 days na lang ang duty.” (A15)

(The inflationary crisis negatively affected

employee wages and work days.)

In a parallel scenario, participant A8 similarly faced the necessity of laying off employees

due to the challenges posed by the inflationary crisis. However, in her case, they grappled not

only with staff reductions but also with the difficulty of ensuring adequate salaries for the

remaining workforce. Despite the nominal wage remaining unchanged, its real value continued

to erode in the face of escalating commodity prices. According to participant A8,

“Syempre sa trabahante nag lay off mi. Tapos ang imohang

sweldo wala nitaas pareho lang. Unya ang iyahang value mubaba
kay mumahal man ang panaliton” (A8)

(Struggled with staff reductions and difficulty of ensuring adequate

salaries for the remaining workforce.)

Customer Complaints. The sixth difficulty experienced and revealed by the participants

was regarding customer complaints. Results showed that there were two (2) out of fifteen (15)
participants who struggled with customer complaints. As shown in Table 6, customer complaints

are indicated by changes of price and customer unease about elevated prices.

Table 6. Customer Complaints

Formulated Meaning Emergent Theme
 Customer complaints of sudden changes of
price Customer Complaints
 Customer unease about elevated prices

Customer complaints represent a significant challenge encountered by SMEs during an

inflationary crisis, primarily driven by the unavoidable price hikes in their products and services.

As SMEs grapple with rising operating expenses, they are compelled to raise their prices,

resulting in heightened customer dissatisfaction and subsequent complaints. This predicament is

illustrated through the experience of participant A5, who shared her struggles, as she expressed,

“Kanang ang customer kay naa juy uban na mo reklamo kay pag
mag taas man gud ang panaliton kay magtaas pud mi.
Mureklamo sila kay inig balik nila matingala sila nganong
nagpataas mi.” (A5)

(Customers complain when prices of goods and services rise due to

increase in costs.)

Parallel to participant A5's encounter, participant A15 grappled with customer complaints

arising from elevated prices of their products. During the interview, she articulated her

experience by stating,

“Nag bagulbol ug taman pagkabalo nako na nitaas na sad ug

maayo ang palitunon. Pati ang customers mag bagulbol kay
magpa taas man pud mi.” (A15)

(The surge in input prices directly resulted in higher prices for

goods and services, prompting customer dissatisfaction and
complaints.)

Coping Mechanisms of Small-Medium Enterprises on an Inflationary Crisis

 Inflationary crisis is an inevitable problem in an economy. Many small enterprises are

experiencing a sharp increase in their operating costs. However, because inflation is consuming a

significant percentage of their clients' budgets, they are compelled to reduce discretionary

spending and look for bargains. Presented below are the coping mechanisms of SMEs while

battling with the inflationary crisis. These are the strategies employed by the business owners to

mitigate and fight the inflationary problem. Based on the participants’ responses, this qualitative

research study found three (3) dominant themes to cope with their adversities, namely: Increase

Prices (3); Lessen Purchase of Products (2); and Sales Promotion (2).

Increase Prices. Increasing the price of product and services is the most commonly

employed coping mechanism according to the participants’ responses. Businesses often use price

increases as a coping mechanism to offset costs or maintain profit margins. While it can help

maintain financial stability and quality products, it can also lead to decreased customer

satisfaction and potential loss if perceived as unfair. Therefore, businesses should carefully

consider the impact of price increases on customers and market competitiveness, and explore

alternative coping mechanisms like cost-cutting, operational efficiency improvement, or

diversifying product/service offerings to ensure long-term sustainability and customer

satisfaction. Results showed that three (3) out of fifteen (15) participants implemented price

increase during the inflationary crisis. Shown in the Table 7, increasing price is indicated by

passing on the burden of rising costs to customers, choosing to sell at a higher price than usual

and increasing price of products without altering size/portion/quality.

Table 7. Increase Prices

Formulated Meaning Emergent Theme
  Passing on the burden of rising costs to customers
 Choosing to sell at a higher price than usual
Increase Prices
 Increasing price of products without altering
size/portion/quality

The business owners are struggling due to the price hikes of the raw materials used in

their businesses. To address this difficulty, they increased their selling prices to cope with this

problem. Participant A11 stated that to address the price hike, they opted to put the burden of the

rising costs to their customers. With the escalating electric bills, the business owner has thought

of possible actions that could lessen the expenses of the business and avoid increasing their

service price. After exhausting all other choices, they were still left with the best option, which

was to increase their prices.

“Kay kuan man mam if pababaan namo [among price]- i-try

namog kanang maka less mi or something unsay maka save
me.Wala man gyuy laing option mam mao lang to na ang electric
bill namo na mura kuan gi pataasan namo. Kay nitaas ang
kuryente mao to nitaas pud among haircut [pricing].” (A11)

(The surge in electricity prices has led to an increase in overall

costs.)

Additionally, Participant A7 shares the same strategy. Since the pandemic started

followed by the price hikes due to the inflationary crisis, it was evident that the number of

customers declined. The businesses were struggling to cope with this occurrence. The business

owner's statement suggests that they believe increasing the price of their services is the only

viable solution to cope with inflation.

“We need to increase the price of our customer service since we

think that’s the best way to cope with it.” (A7)

Moreover, instead of jumping into the shrinkflation strategy, participant A14 preferred

increasing the selling price instead of adjusting the size of their products. All of the businesses
are thriving to fight this inflation and avoid closure. They have employed different strategies to

mitigate the effects brought by inflation. Other businesses might have changed their portion sizes

and stayed with the same price. Others also have remained with the same portion sizes but with

higher prices to catch up with the price hike of the raw materials and production costs. This is

what participant A14 have said,

“Para dili malugi, among gihimo kay nag pataas

lang ug price. Same lang [ang size sa product] pero
nimahal sya.” (A14)

(Increased in price but the size remained unchanged.)

Lessen Purchase of Products. When prices rise due to inflation, businesses may

experience increased costs for raw materials, production, and transportation. In such situations,

reducing product purchases can help businesses manage their expenses and maintain

profitability. Businesses can reduce their expenditures and improve their financial situation by

purchasing less inventory or raw materials. Two (2) out of fifteen (15) participants decreased

their product purchases. Shown in Table 8 are the indications for businesses to lessen their

product purchases by using the average sales to determine how much stocks will be purchased,

ensuring the purchase of necessary products to prevent overspending and refraining from over-

buying stocks.

Table 8. Lessen purchase of products

Formulated Meaning Emergent Theme
 Using the average sales to determine how much
stocks will be purchased
 Ensuring the purchase of necessary products to Lessen Purchase of Products
prevent overspending and refraining from over-
buying stocks.
 It is in the nature of businesses to stock up inventory from time to time. But due to

inflation, buying power of customers decreased which lowered customer engagement in

business. This occurrence resulted in less stocks being sold. Using the average sales to determine

how much stock to purchase is a common and practical approach in inventory management. This

method helps businesses strike a balance between having insufficient inventory and preventing

holding excess inventory. To avoid holding excess products, participant A8 stated that they

always came prepared. When the value of sales decreases, they also decrease the purchase of

products. He stated that,

“Actually, ready gyud mi pirme. Kay sa amoa man gud naga base
ra man pud mi sa amoang margin, syempre business man, buy and
sell so dili, kung sa business, dili kaayo apektado. Kay ug unsay
nag taas dinha, patas an lang pud nimo ang kuan. Ug mubaba ang
value sales, babaan man pud nimo ang buying.” (A8)

(Lessen the purchase of goods when the value

of sales decreases.)

Despite having sufficient supplies for the firm to thrive, there are rare occasions where

perishable commodities that have been stockpiled for a while spoil because there aren't enough

customers to buy them. It is also a struggle for business owners as they lose capital in this

occurrence. Ensuring the purchase of necessary products to prevent overspending is a crucial

aspect of effective cost management for the businesses. As a coping mechanism, participant A9

shared the strategy to never stock a lot of inventory and to buy only those things that are needed

by the customers the most. Decreasing the purchase of products would help the businesses from

overspending. Participant A9 added that to avoid having surplus and spoiled goods, one must be

smart enough to buy only the necessary items that are needed by the customers. She shared,

“Kelangan kung unsa lang tong mga importante nga basic need or
basic na kuan sa store, kumbaga basic needs sa mga tao mao lang
sa jud na imong I priority kaysa.. or else kanang never ka mag
 stock ug daghan… nga muabot lang pud sa time nga maano ra ma
expire or kanang mga dili na kay sya mahalin. Para dili pud mag
stock up imong capital so sa ing ani na panahon, especially nga
naglisod ta, because of mahal na kaayo na palaliton, so dapat
wise ta sa pag huna huna ug unsa lay maayo para sa store.” (A9)

(Prioritize purchasing essential items to prevent

overstocking and minimize potential spoilage.)

“Correct na pag purchase ug mga product.

Dili ka mag pataka nalang ug purchase ug
mga goods.” (A9)

(Prudent procurement practices and emphasize

thoughtful purchasing decisions.)

Sales Promotion. Sales promotion can be a viable coping mechanism for businesses

facing an inflationary crisis. During such times, businesses may experience reduced consumer

spending due to higher prices. Implementing sales promotions can help stimulate customer

demand and encourage purchases. When offering promotions, it is crucial for businesses to plan

and execute them strategically. They should consider their target audience, the timing of the

promotion, the perceived value it offers, and the impact on profit margins. Effective promotion

strategies can help businesses capture customer attention, drive sales, and build lasting customer

relationships. Results showed that two (2) out of fifteen (15) participants employed sales

promotion in coping with the inflationary crisis. Shown in Table 9, Sales Promotion is indicated

by offering promotions to capture the customers' attention and implementing creative strategies

to market and sell the products.

Table 9. Sales Promotion

Formulated Meaning Emergent Theme
 Offering promotions to capture the customers' attention
 Implementing creative strategies to market and sell the Sales Promotion
products
 Sales promotion is one of the strategies employed to capture the customers’ attention to

help aid the struggles faced by the businesses due to the inflationary crisis. Inflation can change

consumer spending patterns. Sales promotions allow businesses to adapt to these shifts by

aligning with what customers prioritize. Business owners despise having their products reach the

expiry date after not being sold. This is one of the factors that the owners consider before putting

the products on sale. Participant A2 opted to put a sales promotion to be able to sell their

products and avoid reaching its expiry date.

“Gi sale jud siya dapat para mahalin siya and di

ma abtan ug expire. Ing ana ra jud among usually
ginabuhat, kay kuan man gud sa mga beauty products
kaning bawal gane siya ibalik gane sa supplier once
nga napalit na nimo sa imoha ra jud siya kutob.” (A2)

(Putting products that are about to expire on sale.)

In addition to that, Participant A15 employed the same strategy to cope with the

difficulties by implementing creative strategies to market and sell the products. By doing so, it

can help businesses stand out and effectively promote their products. They established a

marketing strategy wherein customers are given a free wash for every bundle of laundry. This is

done to keep the customers on coming back as well as boost their sales. She said,

“Nagpa free wash sya sa every bundle sa customer.” (A15)

(Offered free wash for every bundle.)

Government Support of Small-Medium Enterprises on an Inflationary Crisis

During an inflationary crisis, SMEs often face increased operational costs and financial

challenges. Government support becomes essential to alleviate these struggles, providing

financial stability and preventing widespread closures, ultimately safeguarding jobs and
sustaining economic resilience. Outlined here are the Government Support extended to SMEs in

response to an inflationary crisis. Based on the participants’ responses, this study found two (2)

main themes, namely: (1) monetary support and (2) additional capital.

Monetary Support. Government support, particularly in the form of monetary aid, serves as

a cornerstone for business owners, providing essential funding for survival. The data presented in

Table 10 indicates that four (4) out of fifteen (15) participants sought financial assistance from

the government. Shown in Table 13, the support needed are monetary support from the

government and cash assistance.

Table 10. Monetary Support

Formulated Meaning Emergent Theme
 Monetary support from the government
Monetary Support
 Cash assistance

As business owners confront escalating costs of essential raw materials, they are actively

pursuing financial assistance from the government to bolster their operations. They assert that

this additional aid is vital in sustaining the steady momentum of their businesses. Participant A9

expressed that government support in the form of monetary assistance would bring a renewed

sense of hope and resilience to them when she said,

“Sa akoa pud no, much better if in the form of money. Oo,
monetary. Even if gamay lang, kumbaga pang additional capital.
If ever lang nga maisip sa government.” (A9)

(Monetary support is greatly valued and plays a crucial role

in enhancing business operations.)

As SMEs grapple with the daunting challenge of escalating prices, they increasingly look

to the government for financial relief. They view this not merely as a form of financial support,
but as a compelling affirmation of the government's genuine responsiveness to its citizens' urgent

requirements. Similarly, participants A6, A8, and A15 echoed these sentiments, underscoring the

significance of monetary aid in sustaining their businesses, stating that cash assistance is a

pivotal factor in their operations. According to their claims,

“Siguro through monetary support.” (A6)

(The need for monetary support.)

“Sa amoa kay katong sa PCA sa kuan

sa DA. Monetary support.” (A8).

(Monetary support is needed.)

“Cash assistance.” (A15)

Additional Capital. Government assistance is crucial for business owners, providing

financial aid to help them sustain their operations. Results in table 11 shows that there were two

(2) out of fifteen (15) participants who sought monetary support from the government. Inflation

can substantially raise expenses for businesses, including increased costs for materials, energy,

and labor. Cash assistance can effectively counteract these cost hikes. Shown in Table 14, the

support needed such as additional capital support for funding and capital add on for the business.

Table 11. Additional Capital

Formulated Meaning Emergent Theme

 Additional capital support for funding

Additional Capital
 Capital add on for the business

In the current landscape, Small and Medium-sized Enterprises (SMEs) face a formidable

challenge in the form of a substantial surge in raw material costs. In response to this pressing

issue, they are actively exploring avenues to secure financial support from government sources.
This support is viewed as an invaluable and essential supplement, carefully tailored to ensure the

uninterrupted flow of their business operations. This narrative underscores the critical role of

governmental support in sustaining these enterprises. Participant A14 emphasized that an

infusion of capital would be immensely beneficial for their operations when she said,

“Ayuda.oo siguro additional capital. Kailangan

kaayo namo na karon.” (A14)

(In need of additional capital.)

In interviewing the business owners, it became evident that they are facing a substantial

challenge with steep increase in the costs of raw materials. In response to this, they are actively

seeking financial support from the government to supplement their efforts in maintaining the

continuity of their enterprises. These SME owners expressed a shared sentiment regarding the

formidable obstacle posed by the soaring prices of raw materials. They emphasize the

importance of securing government funding as an invaluable supplement to their business

operations, ensuring they can continue to run smoothly. This dialogue highlights the critical role

of governmental support in the intricate web of sustaining these businesses. Similar to the

previous participants, A15 expressed their desire for the government to provide them with

similar support when she said,

“We are in need of additional capital.” (A15)

Discussion

Managing a small or medium-sized business in the face of inflation may seem at odds

with its usual operations. However, in times of rising prices, SMEs can adjust and come up with

creative solutions to handle the economic challenges. Owners and entrepreneurs of SMEs must

face the difficulties brought about by inflation while striving to keep their businesses afloat.
Coping with the escalating costs can become a significant hurdle. In this context, utilizing digital

tools and strategies isn't merely an option, but an essential step for success in an inflationary

setting.

Small and medium-sized enterprises (SMEs) must exercise prudence when making

decisions about resource allocation, as hasty choices can lead to an overwhelming burden of

responsibilities. Nevertheless, compelled by financial constraints, they resolutely opted for

strategic adaptations, such as implementing promotions, to generate income amidst the crisis.

This revenue, in turn, assists in covering essential expenses, enabling them to persevere in their

business pursuits. This demonstrates a willingness to shoulder the consequences of their

decisions in tackling the inflationary crisis. However, it is imperative for SMEs to acknowledge

that challenges are inevitable, and they may face even greater ones in this phenomenon. If these

difficulties prove insurmountable, it could potentially impact their performance in both ventures,

potentially leading to business failure.

Struggles of Small-Medium Enterprises in an Inflationary Crisis

In the midst of an inflationary crisis, SMEs confront substantial challenges, with their

owners assuming the demanding roles of steering their businesses while making crucial decisions

amidst escalating costs and ongoing uncertainty. This intricate balancing act necessitates not

only resilience but also strategic acumen, as SME owners navigate the ever-shifting landscape

created by inflation, seeking innovative ways to maintain stability and growth in a volatile

economic environment. The findings of this study revealed that small and medium-sized

enterprises encountered various struggles such as price hike, loss of customers, price hike,

retrenchment, slow business operations, and customer complaints.

 Price Hike. In the context of grappling with inflationary pressures, small and medium-

sized enterprises (SMEs) often find themselves compelled to implement price hikes as a response

to the escalating costs of vital inputs, such as raw materials and energy. This phenomenon aligns

with the cost push theory, which posits that inflationary forces, particularly the increase in

production costs, lead to higher prices for goods and services.

According to Lakshila (2022) and Akturk (2014), inflation places substantial strain on

SMEs, necessitating adjustments in their pricing strategies. The responses of participants in the

study highlight the significant challenge posed by the rising costs of raw materials, directly

influencing how SMEs price their products and services. The resultant surge in input expenses

forces these enterprises to raise prices, adversely impacting sales as customers seek more

affordable alternatives from competing stores (Hummel Group, 2022).

This challenging situation requires SMEs to conduct a comprehensive reassessment of

their cost structures and financial planning. Innovative strategies are essential to mitigate the

adverse effects on profitability (Smith, 2022). SMEs must carefully navigate the delicate balance

between passing on cost increases to consumers, risking reduced demand, and absorbing costs

internally, which strains their financial resources. Moreover, broader economic implications,

such as reduced consumer purchasing power and changing preferences, add complexity,

necessitating adaptive marketing and sales strategies.

Successfully navigating these price hikes becomes crucial for SMEs to maintain

resilience and sustainability in the face of the economic challenges brought about by inflation.

The incorporation of the cost push theory provides a theoretical framework to understand how

inflation-driven increases in production costs directly contribute to the pricing challenges faced

by SMEs.
 Loss of Customers. Small and medium-sized enterprises (SMEs) frequently find

themselves contending with the vexing issue of customer attrition, with the demand pull theory

shedding light on a critical aspect of this phenomenon. SMEs frequently grapple with the need to

curtail their supply volumes in response to escalating prices, leading to a vexing issue that

significantly impacts their customer base.

The loss of customers is exacerbated by the imperative to limit supply volumes, a

reaction triggered by the upward pressure on prices. This challenging predicament directly

impedes the capacity of SMEs to effectively meet market demands, resulting in a noticeable

erosion of their customer base (Akturk, 2014). The demand pull theory, in this context, suggests

that the increased demand for goods and services, often spurred by economic growth or other

factors, leads to higher prices and subsequently contributes to the difficulty faced by SMEs in

retaining their customer base.

According to Akturk (2014), another crucial factor contributing to customer attrition is

the escalation of prices for products or services. Inefficiencies and higher costs for

manufacturers, as highlighted in the study, translate into higher prices for customers. This

affordability challenge prompts certain customers to explore more budget-friendly alternatives

or, in some cases, discontinue their engagement with the business altogether. The demand pull

theory aligns with this observation, emphasizing the impact of increased demand on prices and

the subsequent customer response.

In summary, the interplay between the demand pull theory and the challenges faced by

SMEs underscores the intricate dynamics that contribute to customer attrition. The need to

balance supply volumes in the face of escalating prices, coupled with the affordability challenges

posed by higher prices, highlights the complex landscape that SMEs navigate in maintaining
their customer base. Incorporating the demand pull theory enriches the understanding of how

market forces and pricing dynamics contribute to the intricate web of challenges faced by small

and medium-sized enterprises.

Low Income. The issue of low income confronting Small and Medium-sized Enterprises

(SMEs) is intricately linked to the dynamics of the cost push theory, as escalating operational

costs contribute significantly to this challenging predicament. The compounding effect of

diminished revenue and rising operational costs, as highlighted by Akturk (2014) and Corporate

Finance Institute (2022), results in a substantial reduction in income for SMEs.

The decline in the customer base emerges as a pivotal factor in this multifaceted scenario.

Lakshila's (2022) insights suggest that the decrease in consumer purchasing power, driven by the

erosive impact of inflation on the value of currency, is a primary contributor to this decline. In

this context, the cost push theory aligns with the observation that inflation-driven increases in

operational costs directly impact the purchasing power of consumers, leading to a reduction in

spending.

Furthermore, the study emphasizes that SMEs, lacking the same level of brand

recognition or consumer loyalty as larger counterparts, are disproportionately affected by the

decrease in consumer spending (American Express, 2022). The subsequent loss in customers

creates a domino effect, causing a reduction in sales that further exacerbates the already depleted

income of SMEs. The cost push theory, in this context, underlines how increased operational

costs, driven by inflation, create a ripple effect that permeates through the entire financial

structure of SMEs.

This compounding effect places SMEs in a precarious financial position, necessitating

strategic and adaptive measures to weather the inflationary storm. The incorporation of the cost
push theory provides a theoretical lens through which we can understand the interconnectedness

of rising operational costs, diminished consumer purchasing power, and the subsequent

challenges faced by SMEs in sustaining their income levels amidst an inflationary environment.

Slow Business Operations. In the struggle of an inflationary crisis, Small and Medium-

sized Enterprises (SMEs) grapple with an intricate interplay of economic forces, a scenario well

understood through the lens of the cost push theory. The already precarious position of SMEs is

further compounded by inflationary pressures, rendering them highly vulnerable to the adverse

impacts of escalating prices.

As consumers contend with inflated prices for essential goods and services, their

spending priorities undergo a discernible shift (Lakshila, 2022). This shift leads to a reduction in

demand for products, particularly those categorized as non-essential, resulting in a noticeable

downturn in sales figures for SMEs. Akturk's study in 2014 supports this observation by

emphasizing that when the prices of essential goods rise, people's ability to make purchases is

diminished. This not only prompts a reevaluation of spending priorities but also translates into

consumers buying fewer items overall.

Simultaneously, the relentless surge in input prices, encompassing raw materials and

operational expenses, aligns with the cost push theory, exerting immense pressure on SMEs'

profit margins. The increased costs associated with production directly contribute to the

inflationary pressures faced by SMEs, influencing pricing strategies and, in turn, affecting

consumer demand.

This combination of challenges creates a perfect storm for SMEs, impeding their growth

during an inflationary crisis. The cost push theory, in this context, illuminates how rising input

prices contribute to the overall inflationary environment, impacting both the supply and demand
sides of the economic equation. SMEs, caught in the crossfire of these forces, must navigate

strategically to weather the storm and sustain their operations in the face of these formidable

challenges.

Retrenchment. In the face of escalating costs amidst an inflationary crisis, numerous

participants shared their profound struggles in navigating the crucial decision to downsize their

workforce. This critical measure was adopted by Small and Medium-sized Enterprises (SMEs) as

an essential strategy to preserve financial stability. By alleviating the strain induced by surging

expenses, SMEs sought to safeguard their long-term viability (Hummel Group, 2022;

Kokemuller (n.d.); Halder, 2022).

This decision to downsize can be viewed through the lens of the transactional theory of

stress and coping, where the stressor is the financial instability induced by rising costs, and

downsizing is a coping mechanism aimed at restoring equilibrium. Kokemuller's (n.d.) study

supports this perspective by asserting that laying off workers is a strategic response undertaken

to keep the business afloat. The transactional process involves the appraisal of the stressor

(financial instability) and the subsequent implementation of coping strategies (downsizing) to

manage the challenging circumstances faced by SMEs.

Moreover, the results reveal that SMEs not only grapple with staff reductions but also

face the difficulty of ensuring adequate salaries for the remaining workforce. Despite nominal

wages remaining unchanged, their real value erodes in the face of escalating commodity prices.

The compromise on wage levels in response to inflationary pressures aligns with Pohl's (2022)

assertion that during periods of high inflation, workers' take-home pay is notably lower than

under more stable economic conditions.

 The transactional theory of stress and coping sheds light on the dynamic and reciprocal

relationship between SMEs and their employees during times of financial strain. The stressors,

such as escalating costs and the need for downsizing, prompt coping strategies that, in turn,

impact the well-being of the remaining workforce. This theoretical framework enhances our

understanding of how SMEs navigate the intricate landscape of financial decisions during an

inflationary crisis, illuminating the stressors and coping mechanisms involved in maintaining

viability amidst challenging economic conditions.

Customer Complaints. Inflationary crises pose formidable challenges to small and

medium enterprises, and among the most pressing is the surge in customer complaints. This is

predominantly attributed to the unavoidable necessity for SMEs to adjust their prices during an

inflationary crisis. As SMEs strive to maintain profitability and solvency while navigating

through escalating operational costs, they are faced with the inevitable decision of raising prices

for their products and services (Rogers, Cook, & Pieters, 2022). This results in an immediate

disconnect with their customer base, leading to heightened levels of dissatisfaction and

subsequent complaints. Moreover, small and medium businesses, unlike bigger companies, feel

the ups and downs of the market more intensely (Vythoulkas, 2023). They have a tough job of

staying afloat while trying to make their customers happy. When they have to quickly and

sometimes dramatically change how much they charge for things, it can make their customers

upset. This puts a lot of pressure on small businesses to find ways to make their customers feel

better about these changes. This challenge shows how hard it is for small businesses to keep their

customers happy during times when prices are going up a lot.

Coping Mechanisms of Small-Medium Enterprises in an Inflationary Crisis

 Amidst all the struggles that the small business owners have faced, they were still able to

employ strategies to fight this economic crisis and continue operating in the business world.

Based on the results of this study, three (3) coping mechanisms were mostly employed by the

chosen participants namely: Increase Prices, Lessen Purchase of Products, and Sales Promotion.

Increase Prices. In the face of an inflationary crisis, business owners suffer with the price

hike-ups and increased cost of production which causes the business to lose money because they

are compelled to drop their markup to make up for it. The high cost of raw materials and

completed goods causes profit margins to contract, which has a negative impact on small firms'

bottom lines (Kane, 2022).

To cope with the challenges posed by the inflationary environment, business owners must

adopt strategies to navigate the rising costs of essential raw materials. One common coping

mechanism, as revealed by the results, is the strategic decision to increase the prices of products

and services. This coping strategy involves passing on the burden of rising costs to customers,

selling at a higher price than usual, and adjusting prices without altering product size, proportion,

or quality.

The transactional theory of stress and coping provides valuable insights into this process,

wherein the stressor (rising production costs) prompts a transactional relationship between the

business owner and the coping mechanism (raising prices). The decision to increase prices

becomes a dynamic response to the stressors, reflecting an ongoing appraisal and adjustment

process to sustain the business during challenging economic conditions.

This coping strategy is supported by Liston (2021), who asserts that raising prices is the

quickest and simplest approach to increase revenue, and Ashraf (2023), who notes that increased

costs, if not absorbed internally, are passed on to consumers as part of the cost of production.
Rising prices, when implemented strategically, can help businesses cover higher expenses,

maintain product or service quality, differentiate themselves in competitive markets, and ensure

long-term viability.

However, the transactional nature of stress and coping also underscores the importance of

careful consideration by business owners. Balancing pricing decisions with customer

expectations and market conditions is crucial, as a misstep in this coping mechanism can lead to

customer dissatisfaction, reduced demand, or even loss of market share. Strategic and thoughtful

decision-making is essential for business success and sustainability in the complex landscape of

an inflationary crisis.

Lessen Purchase of Products. Although increasing the cost of your goods and services

can be beneficial, it might not be sufficient to keep your margins intact. In response, the next

choice often involves cost-cutting measures, reflecting a transactional relationship between

stressors and adaptive responses.

The inflationary environment leads to increased costs for businesses, encompassing raw

materials, production, and transportation, thereby impacting profit margins. Participants in the

study suggested that one coping mechanism for businesses is to reduce their product purchases

strategically. Using average sales to determine stock purchases, ensuring necessary purchases to

prevent overspending, and refraining from over-buying emerged as strategies to manage

expenses and maintain profitability.

The transactional theory of stress and coping is evident in the dynamic interplay between

the stressors of increased costs and the coping mechanism of reducing product purchases. This

strategic decision serves multiple purposes: it can reduce overhead costs, manage uncertainty,
adjust to seasonal demand, respond to slow sales, conserve capital, minimize risk, and customize

inventory (Jackson, 2016).

By purchasing fewer materials or products, businesses can lower their inventory carrying

costs, improve cash flow, and avoid overcommitting to inventory that might not sell, particularly

in uncertain economic times or market fluctuations. Reducing purchases during off-seasons

prevents excess inventory buildup, aligning with the ebb and flow of market demand. In times of

slow sales or reduced customer demand, decreasing product purchases aligns with the reduced

need for inventory, preventing overstocking and potential losses.

The transactional nature of this coping mechanism emphasizes the need for balance.

While decreasing product purchases can offer numerous advantages, business owners must strike

a delicate balance to avoid supply shortages, maintain customer trust, and capitalize on sales

opportunities. This careful calibration exemplifies the ongoing appraisal and adjustment process

characteristic of the transactional theory of stress and coping in the business context.

Sales Promotion. In the midst of an inflationary crisis, businesses turn to sales promotion

as a vital coping mechanism, and the transactional theory of stress and coping provides insights

into the dynamic relationship between the stressors of economic challenges and the adaptive

response of promotional strategies. The study's results reveal that participants utilize sales

promotions and creative marketing strategies to navigate the effects of inflation, preventing

products from reaching their expiry date and sustaining sales.

The transactional theory comes into play as businesses appraise the stressor of inflation

and engage in coping mechanisms like sales promotions. Participants actively employ

promotions to prevent inventory from expiring, illustrating a transactional relationship where the

stressor prompts a dynamic response to maintain business viability.

 Creative marketing strategies, including promotions and bundles, serve as a multifaceted

coping mechanism. These strategies not only prevent products from going unsold but also work

to retain customer loyalty and encourage repeat business. The transactional theory of stress and

coping suggests an ongoing interplay between the stressors of an inflationary crisis and the

adaptive responses of businesses to stimulate customer demand and bolster sales.

Sales promotions, as indicated by Peek (2023), are a valuable tool for businesses

navigating inflation. By incentivizing customers to make purchases, promotions stimulate

consumer demand, boosting sales and revenue during challenging economic times. Furthermore,

promotions contribute to the efficient clearing of excess inventory, reducing carrying costs

associated with unsold products.

The transactional nature of this coping mechanism emphasizes the dynamic adjustments

made by businesses to changing economic conditions. As businesses appraise the stress of

inflation, their strategic use of sales promotions reflects an adaptive response that aims not only

to weather the immediate challenges but also to foster long-term customer relationships and

sustain profitability in the face of economic uncertainties.

Government Supports of Small-Medium Enterprises on an Inflationary Crisis

An inflationary crisis is an inescapable economic challenge that imposes significant

upward pressure on the operational costs of small businesses. However, as inflation erodes a

substantial portion of their customers' purchasing power, these businesses are compelled to

implement measures aimed at reducing non-essential expenditures and exploring more cost-

effective alternatives. Presented below are the strategies that Small and Medium-sized

Enterprises (SMEs) are employing as they contend with the complexities of an inflationary crisis.
These strategies encapsulate the proactive approaches taken by business owners to confront and

mitigate the challenges brought about by inflationary pressures.

Monetary Support. Government assistance serves as a cornerstone for business owners,

offering vital financial support to ensure their survival. Inflation exerts notable upward pressure

on operational expenditures, including elevated costs for essential elements like raw materials,

energy, and labor. Monetary support plays a crucial role in alleviating the impact of these cost

escalations, offering a lifeline to mitigate the economic challenges that businesses face due to

rising prices (Shinozaki, 2022). This support, in the form of financial aid, becomes an invaluable

resource for enterprises striving to navigate the complexities of an inflationary environment by

bolstering their financial resilience and enabling them to adapt to cost fluctuations.This support,

often dispensed in the form of cash aid or grants, functions as a fiscal buoy that helps these

entrepreneurs stay afloat amidst the tumultuous waves of cost fluctuations (OECD, 2014). It

symbolizes not just a means of financial sustenance but also a symbol of solidarity between the

private sector and the government, reinforcing the interdependence of these entities in the pursuit

of economic stability.

Additional Capital. Government aid stands as a pivotal support system for business

proprietors, extending essential financial relief to ensure the continuity of their operations.

Inflation, in particular, poses a substantial challenge by driving up various expenses,

encompassing heightened expenditures on materials, energy, and labor. Financial assistance,

delivered in the form of cash aid or grants, assumes a pivotal role in offsetting these cost

escalations. Such aid serves as a critical instrument in empowering enterprises to effectively

mitigate the economic ramifications stemming from rising prices, ultimately contributing to their

resilience and adaptability in the face of inflation-induced financial pressures. By availing

themselves of such assistance, business proprietors can effectively counterbalance the adverse

impact of rising raw material prices (Laker, 2023). It enables them to sustain their operations,

thereby ensuring the continued provision of goods and services to the broader market. This, in

turn, fosters an environment of economic resilience and growth, ultimately benefiting not only

the businesses themselves but also the communities they serve.

Implications of the Study

Small to medium-sized enterprises (SMEs) face a unique set of difficulties when

operating during an inflationary crisis. These difficulties are anticipated to endure as businesses

work through the combined impact of both the inflationary crisis and the ever-changing

operational landscape. The research results indicate that participants in the study have indeed

grappled with numerous challenges in the course of their entrepreneurial pursuits, but six

dominant themes resulted from the common responses of the participants about their struggles,

namely, price hike, loss of customers, low income, retrenchment, slow business operations, and

customer complaints. With this, there is a need for assistance from third persons to help address

these challenges comprehensively and create a more supportive ecosystem for SMEs to not only

survive but thrive in the face of ongoing economic uncertainties.

Low income is one of the six dominant challenges faced by the participants as they

struggled to keep their business running because of a combination of reduced revenue and

increased costs, which led to a decrease in income. Thus, the study recommends that DTI

officials should establish a targeted financial assistance program that will provide accessible

loans with favorable terms, specifically designed to alleviate the impact of having low income

caused by economic downturn. This financial support will help SMEs maintain liquidity, sustain
operations, and retain their workforce during economic downturns. It aims to provide not only

immediate relief but also foster long-term resilience.

Based on the findings of the study, the second most common struggle experienced by the

participants is the loss of customers. Recognizing the critical impact this challenge poses to the

sustainability of SMEs, the researchers recommend implementing targeted marketing and

customer retention strategies. These strategies should include efforts to enhance customer

engagement, tailor products or services to evolving market demands, and leverage digital

platforms for broader outreach. Furthermore, the adoption of customer feedback mechanisms and

the incorporation of innovative marketing approaches can contribute to rebuilding customer trust

and loyalty.

For business school administrators, the study suggests the importance of adapting

education to match the present economic realities. This involves integrating fresh insights into

the curriculum and adjusting entrepreneurship programs to nurture a generation of entrepreneurs

who are quick to adapt and resilient. To achieve this, administrators can focus on updating

course content to reflect real-world challenges, incorporating practical experiences, and

collaborating with industry professionals. By doing so, they can better equip students with the

practical skills and mindset needed to navigate the uncertainties of the business world

effectively.

The study's findings highlighted a significant challenge for SMEs: grappling with slow

business operations, leading to a precarious situation characterized by a decline in demand, a

shift in customer priorities, reduced sales, and an overarching struggle to maintain resilience. In

response to these challenges, the researchers recommend developing targeted support initiatives

that can both benefit existing businesses and provide valuable guidance for aspiring business
owners. These initiatives may include practical resources, workshops, and mentorship programs

designed to assist SMEs in navigating and mitigating the impact of slow business operations.

Aspiring business owners, in turn, can leverage these resources to gain insights into building

adaptive business models, understanding customer dynamics, and cultivating resilience in the

face of market fluctuations. By fostering a supportive ecosystem, these initiatives contribute not

only to the survival and growth of existing SMEs but also to the empowerment and success of

future business ventures.

The researchers recommend that future researchers further expand on the concept of the

aftermath of an inflationary crisis. This involves examining various dimensions, including

economic, social, and policy aspects, to provide a more comprehensive understanding of how

societies, businesses, and individuals cope with and recover from such crises. Lastly, future

researchers could also conduct a quantitative study involving more respondents and broader

locations in order to further examine the aftermath of an inflationary crisis.

Concluding Remarks

Inflationary crises are not merely abstract economic phenomena; they have tangible and

far-reaching consequences, particularly for Small and Medium-sized Enterprises (SMEs). These

crises, marked by a sustained increase in the general price level of goods and services, can

significantly disrupt the delicate balance that SMEs rely on to thrive. In this brief exploration, we

will delve into the profound impact of the inflationary crisis on SMEs, highlighting the

challenges they face and the strategies they must employ to weather the storm in an ever-

changing economic landscape.

 However, despite the endless opportunities, challenges are still possible to be

encountered along the way as they are inevitable for our SMEs participants. The participants

were free to venture, but they still had to give more effort to balance the adverse effects of the

crisis on their businesses. They were challenged with price hikes, loss of customers, low income,

slow business operations, retrenchment and customer complaints. Thus, one has to learn to

endure hardship to be able to be successful in both endeavors.

Despite the challenges brought by their situation, they managed to learn to cope with the

said challenges by applying three (3) efficient strategies to cope up with the challenges, namely:

increase prices, lessen the purchase of products, and implement sales promotion. These strategies

served as their weapons in overcoming their day-to-day struggles. Their experiences gradually

taught them the importance of adaptability and resilience in the face of economic uncertainty.

Furthermore, it's crucial for SMEs to stay informed about market trends, consumer

behavior, and government policies to make informed decisions. Collaboration and networking

with other businesses can also offer valuable insights and support during challenging times. As

SMEs navigate the complexities of an inflationary crisis, a proactive and strategic approach

becomes paramount, enabling them not only to survive but also to thrive in the ever-evolving

economic landscape.
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 Key Informant Interview (KII) Protocol

Research Title: Resilience in the Aftermath: Unveiling the Struggles and Coping

Mechanisms of SMEs in the Face of an Inflationary Crisis

Time of Discussion: Open time

Date: Open date

Place: Digos City, Davao del Sur

Participation Code:

Facilitator/s: Janette Deluao, Kariza Paula Diagbel, Glozy Belle O. Pial

Position of Researchers
Facilitator:

Objective of the KII:

The main objective of the activity is to generate information from the participants
on the details on the challenges they encountered by the small-medium sized
entrepreneurs doing business during the face of an inflationary crisis and their
corresponding coping mechanisms.

Methodology

The discussion was conducted in accordance with the following protocols:

1. The participants were made aware of the primary objective/purpose of the

research;
2. The participants were notified in a clear and concise manner that all discussions
would be audio-recorded;
3. The participants were informed of the procedures that would be implemented to
safeguard the confidentiality of their data;
4. The participants were given an estimate of the duration of the discussion, which
was expected to last for approximately one (1) hour;
5. The participants were asked regarding any questions or concerns they might have
about the focus group discussion;
 6. The participants were given the assurance that they could cease participating in
the discussion at any time during the discussion for any reason;
7. The participants were apprised that, following the analysis and interpretation of
the data, the findings would be presented to them for their review and
confirmation of the accuracy of the data utilized in the study; and
8. The participants were wholeheartedly thanked and recognized for their support
and cooperation.

Materials Needed:

Tape recorder
Ballpen
Paper

The interview questions:

1. What are the struggles encountered by SMEs due to an inflationary crisis?

1. How many years has your business been in operation?

2. What are your views on an inflationary crisis?

3. What are some of the challenges you've faced as a business owner due to an

inflationary crisis?

2. What are the coping mechanisms employed by SMEs to address an inflationary crisis?

1. How did you equip yourself with knowledge on how to address an inflationary

crisis?

2. What coping mechanisms have you used to address the challenges you faced in an

inflationary crisis?

3. What forms of support do they need from the government to help them overcome

struggles due to an inflationary crisis?

1. Have you noticed the government taking strong or assertive steps to address the

inflationary crisis?

2. What forms of government support would be most effective in helping your SME

to overcome the challenges caused by an inflationary crisis?

 COR JESU COLLEGE
Sacred Heart Avenue, Digos City
8002, Davao del Sur, Philippines

Our dear participant:

The undersigned are third-year students of Cor Jesu College Inc. taking up Bachelor of Science in
Management Accounting. We are currently doing our research entitled “Resilience in the Aftermath:
Unveiling the Struggles and Coping Mechanisms of SMEs in the Face of an Inflationary
Crisis”. The purpose of the study is to explore the experiences of the fifteenth (15) SMEs . Specifically,
the study will try to determine the dilemmas and their coping strategies as experienced by the informants.

To help us complete this study, we would like to invite you to spend a little time answering the questions
through the conduct of a face-to-face interview. You may suggest the interview's date, time, and setting.
This interview will help determine the lived experiences of the SMEs who have experienced the heat of
the inflationary crisis in Digos City. Specifically, it will focus on the dilemmas you have experienced in
establishing integrity as SMEs venturing and the coping mechanisms utilized.

Should you require any further information or have any concerns regarding this research, please do not
hesitate to contact us at glozypial@g.cjc.edu.ph or 0909 842 9460. Rest assured that the information that
you provide will remain confidential and will only be used for the purposes of this study.

Thank you very much for considering our request. We look forward to receiving your honest feedback.
Your cooperation in this matter is genuinely appreciated.

Very truly yours,

JANETTE DELUAO KARIZA PAULA DIAGBEL

Researcher Researcher
GLOZY BELLE O. PIAL
 Researcher

Noted by:
KIRT ANTHONY R. DIAZ, Ph.D. CYRIL MARIE S. RAMOS, CPA, MBA, MPA Research
Adviser College Dean

COR JESU COLLEGE

Sacred Heart Avenue, Digos City
8002, Davao del Sur, Philippines

INFORMED CONSENT FORM

Information and Purpose: The title of our study “Resilience in the Aftermath: Unveiling the
Struggles and Coping Mechanisms of SMEs in the Face of an Inflationary Crisis”. This study aims to
explore the experiences of the SMEs, specifically the dilemmas they have encountered in the course of
the inflation and the coping mechanisms they have employed to counter the dilemmas they have faced.
We, the researchers, believe that the study will be helpful to the Department of Trade and Industry (DTI)
Officials, Researchers, Incoming Business Owners, Administrators of the Commission on Higher
Education, and Owners of SMEs.

Your Participation: Participation in this study will comprise of a Key Informant Interview (KII) where
informants will be sharing their experiences through a face-to-face interview. You will be interviewed
individually, and the interview will only be about and is limited to the topic written in the KII. With your
permission, the interview will be voice recorded and transcribed. You have the discretion to choose not to
answer certain questions you deem too sensitive. Should you decide to cancel your participation for
whatever reason, we will omit the data collected from the interview session from our study.

Benefits and Risks: Participation in the study will primarily help you share your dilemmas and coping
mechanisms in establishing integrity in the course of auditing, Thus, your participation will help
interested individuals and groups to consider and better understand the experiences and sentiments of
external auditors or auditors in pubic practice. The interview will also expose you to the processes of
research. As this study will follow ethical consideration, risks will be of minimal level. Sensitive
experiences might come into context which would put you in distress. However, we strongly believe this
will not happen as the interview session’s comfortableness and confidentiality will be ensured.

Confidentiality: Before, during and after the conduct of the interview we will ensure that the information
you will share, and your identity will remain confidential. Your name will only be reflected in this
0consent form. However, for this form’s further uses, we will cover your name after you have signed. In
the voice recordings and transcripts of the interview session, and the presentation, analysis and discussion
of data, only the codes assigned will be reflected. Furthermore, we will really ensure that your
participation will be kept private and confidential.
If you have any questions or concerns, please contact the researchers, Janette Deluao, Kariza Paula
Diagbel, and Glozy Belle O. Pial at glozypial@g.cjc.edu.ph or 0909 842 9460.

By signing below, I ACKNOWLEDGE THAT I READ AND UNDERSTAND THE ABOVE

INFORMATION. I AM AWARE THAT I CAN DISCONTINUE MY PARTICIPATION IN THE
STUDY AT ANY TIME.
Name and Signature:

Key Informant Interview

RESILIENCE IN THE AFTERMATH: UNVEILING THE STRUGGLES AND COPING

MECHANISMS OF SMEs IN THE FACE OF AN INFLATIONARY CRISIS

Participant
Research Questions Answers
s
RQ1-Preliminary Question A:
How many years has your
business been in operation?
A1 3 years
A2 Uhmm… Mag 3 years na
A3 5 years
A4 We are about ahh… 26 years
Kuan pag diri lang sa franchise na Kani kay
A5 1 year kapin pero sa original kay mag 7 na
siya
A6 Six years. Going 7
This business has been uhm open for 22
A7
years now.
Kuan…naga change man gud ko ug
A8 pangalan gud. Pero kanang sa kana na name
kay mga 8 years.
Among business nag operate for 15 years na
A9
sya. OO 15 na. Since 2008
A10 Mga kuan na tulo na ka tuig. Mag upat
A11 Almost 7 years
A12 2012 man..unsa na man ta karon..10 years.
A13 Kuan na sya… 2016 man diba ni? 7 years
A14 10 years
A15 2015 nag sugod..8 years
RQ1-Preliminary Question B:
What are your views on an
inflationary crisis?

A1 Pag-lockdown baba jud

Ahmm.. Pagsaka sa presyo sa palitonon.

Kuan kung magsaka man gud ang presyo sa
palitonon usually kuan siya kining mohinay
A2
pud kanang kuan gane pag baligya namo ba
dili jud siya kuan jud … lahi ra basta
magsige siyag saka
Lisod oy… even though nga ang naku anan
jud ana kana jud mga negosyante kay kami
daghan… sympre lisod jud I run ang
business no kay tungod sa.. okay lang ang
A3
nag trabaho sa government kay okay raman
na pero ang mga negosyante mga dagko-
dagko nga negosyo murag lisod jud siya I
run kay tungod sa ano.
what do you mean by views of…pandemic..
inflationary during that time within that 26
years.. karon man ang inflation.. actually
pwede mag bisaya, dili kaayo namo ma
randaman ang kuan we cannot feel the
inflation guys kay were on rentals man.
We're not dealing with business nga kanang
Kuan namaligya mi we're on mostly in
A4
rentals kahit papaano naa may mag rent,
birthdays, weddings, baptismal then yung
ano sa mga patay rental for 9 days so dili
kaayo namo ma absorb ang katong.. yeah
kay we are on rentals sometimes.. Kuan man
gud party accessories dili siya daily needs,
dili siya basic needs. Occasional kahit
papapano naa man jud siya … everyday.
A5 Kuan. Medyo Kuan siya medyo malugi mi
 basta miitaas ang panaliton
ang inflation sa akong understanding is uhm
pag increase sa aahh commodities and pag
A6
baba sa buying power sa atong mga
consumers
Inflationary Crisis, I think, cannot be
avoided. In fact it happened in united
A7
kingdom. It is not just you know, a national
crisis but a global crisis.
Sa inflation.. sa connection sa business no
dili sa akong personal. Okay ra man. Okay
ra. Kay buy and sell man gud ni amoa. So
A8
dili mi apektado sa inflation syempre pag
mag taas ang kuan mutaas man pud
ang..pirmente man ang market.
Uhmm diba inflationary crisis, kana manang
pagtaas sa mga presyo no? Which is ahh..
dako pud siyag epekto sa amoa as small time
business owners kay syempre, ahh one
factor nga ma ano niya uhmm. Because of
inflation rate kuan mugamay.. mugamay ang
kuan.. mugamay ang halin. Aahh. Makuhaan
ang mga customers. Kay tungod kay mahal
na ang palaliton dili na kaayo kaaford ang
A9
uban ug pamalit naa may maka afford pero
dili na sya as much as kung unsa kadaghan
to ilahang gipalit sa unang panahon sa pag
abot na aning inflationcrisis na atong
ginaface karon limited napud ang ilahang
ano ilahang medyo mapalit or mapurchase
sa store. So since limited napud ilahang ma
ano, so ang halin is medyo mubaba jud ang
halin sa amoang store or sa tindahan.
Ah karon mao man jud na ang pag taas sa
A10 presyo, tanan so murag dako jug epekto labi
na sa amoa nga mga naay negosyo
A11 Sa amoa mam sa inflation dli man kaayo
maka [apekto] mam kay depende kay among
gamit lng jud mam except sa kuan mam
kanang electric bill namo ug water bill umm
mao juy major namo na kuan mam na dako
namo na expenses and the rest powder and
 alcohol and wax kay actually dli man kaayo
sya taas jud na kuan and dili man jud kaayo
sya namo gamit ang mga powder gyud. Sa
electric bill ug water bill lang jud among
dak-an.
Unsay akong view?...unsa man akong view
A12 ani oy….kuan sya kanang…problema jud
sya kay nag taas…then..mao to
Nagkahinay jud ang amoang business dri
kay ano man gud dili man gud kasya known
A13 na paliton ba. Kay syempre bags lang among
baligya ug pahumot. So nagkataas ang
pamaliton, nagka hinay pud mi diri.
Kanang daghan ug reklamo sa mga tao ba.
Ngano nisaka na pud ang mga presyo. Pero
A14
okay lang man gihapon naa man gihapoy
mamalit.
Nag bagulbol.. Kay taas na kaayo ang
A15
palitunon
RQ1-Preliminary Question
C:
What are some of the
challenges you've faced as a
business owner due to an
inflationary crisis?
Murag dili jud kuan.. maayo among pagkuan
A1
diri sa income
DKuan ma'am mohinay.. aside sa mohinay
A2 dili siya mahurot then mga ma expire nalang
ana ba ang mga products.
Kuan jud siya ma'am katong ang mga
guest namo diri kay kuan siya lisod siya ma
kuanan jud ang business I run namo kay
crisis man. Oh Wala kaayo naga check in,
A3
Wala jud kaayo naga check in niya karon
okay na ang business okay na siya murag ni
ano na ba.. mura nag back to normal ma
siya.
A4 Challenges.. the challenges lang it's not
necessarily in inflation but those rentals nga
 naay mga kuan maguba ang mas ahh. Ang
bad debts nana namo especially customers
are not honest to silay naka kuba, silay naka
mao na akong mga challenges. Pandemic of
course during the pandemic peor the
question is inflation. Last 2022, 3 months
baya Yung close lahat ng ano 3 months pero
after that Meron naman kahit papaano.
Kuan kanang ang customer kay naa jud
siyay uban mo reklamo kay usahay mag taas
A5 ang panalitonon kay magtaas pud mi kay
mag reklamo sila kay.. ig balik nila
matingala sila nganong nagtaas mi.
Actually, depende man gud na siya sa
imohang unsa ni, imoha ganing type of
business. Ang amo man gud is food, so
murag basic need jud siya sa mga
consumers. Nya at the same time, sweet corn
man no ang among business so dili jud sya
A6 basta basta pud nga gina kanang kumbaga
gina cut off sa mga consumer kay kanang sa
aside sa basic siya, kung sa pagkaon,
icompare nimo sa uban food carts, candies,
cotton candy mga ana. Ang amo man gud
heavy. Maka busog gyud siya so dili ra gyud
kaayo siya affected.
TSome of the Challenges that this business
faced or encountered due to inflationary
crisis are that the office supplies got pricey
A7 that we need to lessen the supplies and that
affected our service to our customer since
we have to lessen the materials and that’s
why we need to cater lesser customers also.
Ah syempre sa trabahante tapos syempre
ang imohang sweldo pareha lang so ang
iyahang value mubaba kay mumahal man
A8 ang palaliton nila. Wala man. Wala man pud
nag lay off. Kuan man ako halos per.. dili
man gud kuan mura jug.. pakyawon man
gud na sya.
A9 Challenges? Uhm kuan.. matagbaw ka ug
kuan… Matagbaw kag huna huna ug paano
 nimo I survive ang imohang business kay of
course, daghan ka ug… mugamay ang
imohang halin or mugamay ang imohang
income but still ang imohang bayrunon, ang
imong expenses, labor, mga ing ana is
steady lang gihapon. Pero at the same time
ang imohang mga panginahanglanon, ang
imong daily needs nga kailangan nimo eh,
eh. Kumabga itawid sa pang araw araw is
mao lang gihapon. Wala sya niubos.
Samantalang ang imohang income is still
nibaba siya. So challenge na siya kung
unsaon nimo pag survive para ang imohang
negosyo is still, magpadayon siya kay
knowing na daghan kaayog gasto. Naa kay
trabahante naay mga bills. Mga expenses,
every month expenses sa among store. Ang
uban expenses man gud bihira lang jud na
sya muobos. Kasagaran pud ana mutaas. So
dapat kung taas imong expenses, ang
imohang halin beyond sya, taas pud sya.
Kaya lang, through inflation crisis, medyo
dili nimo na sya ma expect na mutaas jud
imohang halin. Ang possible ana is ubos jud
sya. Mao nay mga challenges na kailangan
namong harapon ug usaon namo pag face
para mao to sya, ma survive namo ang
among negosyo, a small time business.
A10 Daghan. Kay syempre ang amo pung
deleberanan mga dagko, dagko pud na sila
na negosyo unsa nalang pud kaha mi na
gagmay so kuntahay mag taas ang presyo,
mubagsak lahi man sauna kay naa may
palugit kay ug mag deliver mig stocks namo.
Karon kay wala na tungod pud kay nag lisod
sila mao nang tanan kay apektado jud sa
parehas namo nga negosyo nag deliver sa
mga dagko na mga kuan junk shop.
Syempre tungod sa pag taas sa presyo, nya
paglisod sa pag ta.. taas.. mutaas ang
gasolina.. syempre pag mutaas ang gasolina
lisod man kay ang mga tao ah kuan man
kanang apektado man jud tanan labi kay
ang sa amoang negosyo syempre kuntahay
mutaas ang kuan.. mutaas ang gasolina,
 mutaas pud unta ang bakal. So karon na
sigeg taas ang gasolina, nag sige pug bagsak
ang bakal. Nya unsaon nalang amn pag
kuan, syempre mag bagsak ang bakal, mag
mingaw ang negosyo. Mingaw gyud ang
tanan. Ma feel gyud nako ang mingaw tanan.
Mao nang mag bawas gyud ug tao.
Uhmm…sa unsa to mam? sorry…Uhmm…
sa inflation…siguro mam.. Kuan mam…
uhmm dli man sa kuan mam pero sa pag taas
sa among price mam naa juy uban mam na
dili na jud kaya ang kuan ang [among] price
tungod sa.. kuan mam dli man jud kaayo mi
affected sa inflation, pero tungod atong sa
kuryente lang katong mao juy hinungdan
nitaas among kuryente mao to dli man pud
namo ma salo kay tama-tama ra pud sa
kuan.. So mao to ang kuan namo sa electric
bill nag add mig kuan mam…. Nag change
mi sa price mam. Mao to gipatasan namo
kay sa kuryente so.. Dli man namo ma kuan,
gipatong namo sa murag kanang - bale ang
customer ang mag kuan mam ba kay bisan
unsaon namog- dli man jud namo ma kuan
A11 gud - bisan unsa namog umm try na ipababa
ang -ay kanang murag mas maka less gud mi
sa amoang umm kuan… dili man pud namo
pwede gud ikuan amoang services para lang
ma maintain to na price so mao to sa
consumer jud na- mao to na sa electric bill
namo dako, mao to ni kuan sad ang price.
Hmm sa customers mam naa man juy mga
students gyud na katong nag prepare na sila
sailang allowance na imbis every - twice a
month magpagupit, umm mahulog na lang
syag… murag once a month nalang or kuan
kay mas nitaas man ang price. Sauna kay
mas murag ma kuan raman nila kay 120-
150.. Then nag taas naman ug 180 karon
mao ng murag incase na mubalik to silag
twice a month ..umm almost once a month
na lang.
Kuan…less jud ang customer…karon kay
A12
less among pasyente less jud among income.
 Kato mingaw jud kaayo…oo ni baba pud
among sales ato. Asta among customers
A13
nangawala ang uban, nagkahinay jud syag
maayo.
Mura syag ni baba jud sya.. Nibaba ang
A14
sales….
Mingaw..samot na tung pandemic. Ang
presyo namo katong crisis kay nag add man
pud gud among mdm sa bundle gani so ang
other customer nangita silag mas barato. Na
A15
apektohan among sweldo. Na apektohan
among rest day ana. Syempre kuhaan among
adlaw. Naay uban tag 3 days na lang ang
duty.
RQ2-Preliminary Question
A:
How did you equip yourself
with knowledge on how to
address an inflationary crisis?
Wala lang hinayhinay lang jud mi diri…i
A1
open lang jud mi kanunay
Kuan namo gina sale nao.. oo gi sale jud
A2 siya dapat para mahalin siya and di ma abtan
ug expire.
Oh yeah nag promo mi… nag promo jud mi
kanang na kuan naman jud nila kanang diri
sa (name of place) kaning (name of
business) mao ni ang pinaka barato so naa
man mi free breakfast per room namo… naa
mi free breakfast so gihimo na namo Kay
para ang mga customer maka kuha jud mi ug
A3
daghan customer so naa mi free in one room
naa mi free … ahh kanang breakfast. Naa mi
mga free breakfast.. dati naa paman mi
internet cafe, naa pay massage, naa pay
salon so amo nang gi promo by 1 stay.. stay
one night ahh pwede ka maka free ana unsa
…. ana ba.
A4 Wala… we don't have.. same lang gihapon
A5 Ahhh among coping mechanism guro kay
kuan nalang unsaon namo pag manage
 among servings kay sa kanang nagmahala
ng manok.. oo serving size namo kay
nagmahal ang manok so kung whole siya na
manok dapat medyo dapat daghan siyag cuts
para mabalik iyang kuan…
Number one dili lang man gud sya kami
lang ang nag equip kay kami nag rent lang
man mi no, unya naka tabang pud gyud na
A6
ang gmall kay iyahang gi understand ang
mga tenants ba. Iyaha man gibabaan iyahang
rent. Especially during pandemic.
I think the best way to equip.. to equip
ourselves in the inflationary crisis was
A7
through watching news and being updated to
the latest happenings.
A8 Hinuon, kabalo jud ko anang sa news.
A9 Hala, unsa ang among gihimo na pag
pangandam. Ahh wala, fight lang jud
kanang… kuan kailangan ta mag ano.
Kailangan ta mag isip ug strategy kung
unsay pwede dapat himuon. Pwede ba ka
mag cross cutting sa imong mga trabahante.
Since kung mugamay imohang customer,
mugamay sad ang trabaho sa store. So
kelangan pud ka mukuha ug trabahante para
lang pud ma ano.. mapatas lang ang halin or
mapatas ang imong income ahm mga
expenses pud. And then kelangan kung unsa
lang tong mga importante nga basic need or
basic na kuan sa store, kumbaga basic needs
sa mga tao mao lang sa jud na imong I
priority kaysa.. or else kanang never ka mag
stock ug daghan… nga muabot lang pud sa
time nga maano ra ma expire or kanang
mga dili na kay sya mahalin. Para dili pud
mag stock up imong capital so sa ing ani na
panahon, especially nga naglisod ta, because
of mahal na kaayo na palaliton, so dapat
wise ta sa pag huna huna ug unsa lay maayo
para sa store. Correct na pag budget, correct
na pag purchase ug mga product. Kung
unsay mga maayo lang or unsay mga
kumbaga kuan sa store nga products. Kasi
 sometimes, us, business owners, specially
pag kuan, ma ano matemp ka nga
mangompra ug daghan. Mag stock up ka,
mag stock. So ang problema ana, is ma ano
ang imohang capital is ma stuck pud. Ang
mga tao dili na kaayo mamalit tungod sa
kamahal na pud sa mga palaliton or sa
presyo sa palaliton. Ana lang
Ahhh… syempre, sa pagka karon mu-… sa
akoa, makasandig man pud ko sa akoang
kuan pud noon.. sa akong amo pero
kuntahay sa mga ing ana.. sa mga gasto… sa
A10
gasto sa … sa expenses sa … sa sweldo sa
mga tao.. lisod..lisod kay.. nag lisod mi ug
kuan.. naglisod mi ug balanse kay apektado
gyud tanan kaayo.
Kay kuan man mam if pababaan namo
[among price]- ahhm try namog kanang
maka less mi sa kuan or something unsay
maka save me..ahm wala man gyuy laing
A11
option mam mao lang to na ang electric bill
namo na mura kuan gi pataasan namo para
maka kuan mam… kay nitaas ang kuryente
mao to nitaas pud among haircut [pricing].
A12
Sa amoa tanan.. Kung aha mi mag kuan kay
sauna man gud tong kusog among kaun live
lang jud mi wala mi naga post kadugayan
A13
naga post na mi nya gina share na namo.
Pati kami mga kauban namo.. Oo mas
daghan syag na abot na mga tao
A14 Murag wala. Wala lang.
A15 Oo nag promo si mdm ato. Nagpa free wash
sya sa every bundle sa customer…. Oo after
ato kay nibalik na. Pero dili man jud
malikayan na naay adlaw na mingaw jud.
Pero naa man puy uban na kanang mga loyal
na customer mubalik man jud sila kay
depende man gud na sa pag handle sa mga
tao pud sa laundry. Mao ng mubalik sila dili
pud tungod sa kanang magpa laba sila.
Kanang ganahan lang pud sila sa mga tao sa
 laundry ba kay mag “ good morning sir”
ana.
RQ2-PreliminaryQuestion B:
What coping mechanisms have
you used to address the
challenges you faced in an
inflationary crisis?
Di maka-cover man sad namo among
pagkuan diri sa among rental ana maka
cover rapud sa hinayhinay nga... diri ra jud
kani lang gihapon jud wa man mi lain source
A1
nga ma income. Okay raman pud,
hinayhinay lang lage ma cover lang man jud
pud rental sa building, or sweldo ug
expenses sa uban.
Oo, ing ana ra jud among usually ginabuhat,
kay kuan man gud sa mga beauty products
kaning dili nila gina.. bawal gane siya ibalik
gane sa supplier once nga napalit na nimo sa
imoha ra jud siya kutob ingon ana ilaha wala
A2
jud mi kuan… dili pareha sa uban mga
panel… like mga panel pareha softdrinks
pwede ra gane mabalik mga beauty products
dili kami ang ma alakansi pag ingon ana
basta mo taas ang presyo malabay jud siya. .
Ahh yeah, gikan lang jud sa ako a, sa
kanang akong sa nakat unan nako sa gawas
kay naa man sad ko mga business didto so
A3
kung akong mga promotion na akong gi
Kuan gi apply rapud nako sa akong business
so yeah yeah.
A4 None, never… Wala, same rate lang
Oo kana nag pataas ug presyo unya usahay
pag.. pagmagtaas ang palitonon unya mag
A5
taas mi medyo mingaw man siya no so mao
to magpa promo mi.
A6 Iya man gibaba iyang rent so kami nga kuan
business owners, ang among retail price, still
the same. Ang amoang expenses ato na time
baba. Maskin ang amoang gross sales ato na
time baba compared sa katong time nga
walay pandemic, nisurvive lang gihapon ang
 among business kay naka help man ang
katong gmall a gibabaan among rent. Wala.
Ning baba man among overhead expense.
So, to cope with those challenges due to
those inflationary crises, we need to… we
A7 increased the price of our customer service
since I think.. we think that’s the best way
to cope with it.
Unsa to imong question? Sa inflation?
Actually, ready gyud mi pirme. Kay sa amoa
man gud naga base ra man pud mi sa
amoang margin, syempre business man, buy
A8 and sell so dili, kung sa business, dili kaayo
apektado. Kay ug unsay nag taas dinha,
patas an lang pud nimo ang kuan..oo.. ug
mubaba ang.. ang kuan angg ahhh… value
…sales, babaan man pud nimo ang buying.
Coping mechanism nga kailangan dili ka
mag pataka nalang ug kuan…mag pataka ug
ug purchase ug mga goods. So purchase lang
ka kanang mga.. kumbaga mga saleable…
salaeable lang sa imohang store ug mga
basic needs lang sa imong mga customers. If
ever na kelangan mag cut off ug labor, ahh..
muano ka… mag mu cut kag labor or
A9
mutanggal kag tauhan para… para masustain
ang imohang income sa expenses. Mag cut
off ka ug kanang for example, mag tipid ug
kuryente. Mga ing ana. Kung naay mga
ways paano maka tipid kailangan siya
himuon para lang jud nga maano.. ma
survive nimo ang crisis nga imohang gina
face sa imohang business.
Sa pagka karon syempre karon ang tao kuan
mani sila unom. Karon nag bawas ko ug tao
so na upat nalang ni sila karon nya kanang
sa amoa, nangita jud ko ug .. hinuon nangita
A10
mi ug mas taas taas gyud na buyer.
Kuntahay mas taas ang gensan, didto mi sa
gensan. Ug taas pud sa davao, diri mi sa
davao
A11 Gi kuan namo sa consumer - [gipatong] sa
 mga customer namo mam.
Unsaon sya pag address?...unsay
A12 buhaton?....kuan lang jud ahhh social media
and then naga promo mi.
Kuan mi, ga live.. Although naga live man
pud mi ato. Naga post pud mi sa among
products online nya gina share namo..sa mga
A13
online na gud karon - sa mga groups..ana.
Para daghan mu tanaw, daghag makakita sa
among post ug sa among live
Ahh same lang [ang size sa pan] pero
A14
nimahal sya
Oo nag promo si mdm ato. Nagpa free wash
sya sa every bundle sa customer…. Oo after
ato kay nibalik na. Pero dili man jud
malikayan na naay adlaw na mingaw jud.
Pero naa man puy uban na kanang mga loyal
na customer mubalik man jud sila kay
A15
depende man gud na sa pag handle sa mga
tao pud sa laundry. Mao ng mubalik sila dili
pud tungod sa kanang magpa laba sila.
Kanang ganahan lang pud sila sa mga tao sa
laundry ba kay mag “ good morning sir”
ana.
RQ3-Preliminary Question
A:
Have you noticed the
government taking strong or
assertive steps to address the
inflationary crisis?
A1 Wala.. Wala jud.. wala
A2 Ang government… Wala… Wala jud
A3 Wala ko kabalo unsa…ambot lang, naa
siguro. Naa man toy ayuda… para sa
business? Wala man. Wala ambot lang
siguro sa uban nga small business kay kuan
murag naa lang guro sa mga small mga
tindahan tingali nga micro oh yeahh… pero
kaning mga ing ani dili naman na sila wala
naman na silay pakialam ilaha bahala mo
dinha ma down mo okay ma close or ing ana
 ing ana mao na siya.
You mean ang government nakialam sa…
naay natabang.. during the pandemic.. sa
A4 business none. Pero personally sa family sa
kuan.. naa katong nang hatag sila but
actually sa business wala.
A5 Wala.. Wala man.. wala
Ang government? Uihmm. Wala man kaayo
koy ma… aahh wala. Pero ang among
empployees, naa to silay gipanghatag na..
kay since ang employees man gud ato dili na
gyud sya parehas sauna na six days a week
ang ilahang ano no ang ilahang duty. So
kato pud siya, nababa ang amoang ang
A6 overhead expenses kay ang pasweldo namo
imbes na.. murag na cut in half ba kay ang
duty pud sa tao half man nya, pero
gisubsidize siya sa government naa toy
mga.. mga.. pa.. unsay tawag ana.. naayy…
ginahatag ang gobyerno sa ilaha ba. Na
lessen ang days sa ilang pag duty.
natabangan sila sa government
A7 The answer is Yes.
Ambot lang. Tingali.. basin tungod to sa
inflation pero sa kana mang DAR man gud
syempre agriculture naka program naman
A8 pud na sila naay mga assessment sa mga
farmer. Mao rana dili ko sigurado ug tungod
ba sa inflation or program ra gyud to sa
gobyerno.
A9 Sa asa? Here in our community? Uhmm
Siguro kanang ano, pagpanghatag nila ug
mga… mga…sometimes ayuda sa mga ano
sa mga locals. Uhm sa amoa as business
owners. I don’t know ha pero…as long as sa
akoang concern as business owner, murag
never pa man gud ko naka anog help from
the government .naka ano ko ug naay help
pero sa mga tao. Sa mga tao nila gina ano…
ginahatag. Which is okay pud siya kay pag
once nay help ang mga tao from the
government, so pwede man pud siya mahelp
 para sa amoang ano.. sa among business kay
if naay mahatag ang government sa mga tao
so maka luag luag pud sila gamay. For
example naay mga ayuda from government
ah.. money or unsa ba na… just like uhmm..
unsa pa bang mga pantawid pantawid na
mga program or sometimes or naay mga
livelihood programs ilahang ipa implement
for example sa barangay. So kung maka
income ang mga tao sa barangay, ahh
benefit pud… or beneficial ra pud para sa
amoa kay syempre ang tao naa puy ma
purchase or naa puy mapalit sa tindahan.
Mga ing ana.
Sa pagka karon murag… hinuon siguro man
siguro naay gihimo ang gobyerno pero dili
A10
pa man feel. Hahahaha. Dili pa kaayo kay
murag ah.. pait sad kaayo sa nga tanan.
Sa amoa mam wala man mam…kay private
sector man mi then wala man kaayoy need
na kanang murag kuan gud.. Kanang wala
may incentives ginahtag kay murag
A11
kadalasan..depende pud siguro sa type of
business nimo? Then amoa kay haircut and
nail salon man so wala man kaayoy gihatag
na kuan mam…
Sa karon?..sa kato na time? Murag wala jud.
A12
Wala jud koy na kuan…
A13 wala.
A14 wala.
Wala miy nadawat ato na ayuda. Tabang ra
pud mi ato kami mga trabahante kung
A15
unsaon pag solve na ang customer mu
padayon gani sila.
RQ3-Preliminary Question B:
What forms of government
support would be most
effective in helping your SME
to overcome the challenges
caused by an inflationary
crisis?
 Wala jud… wa jud ayo.. alangan man unsa
man akong I Kuan ana.. maayo sila unya kay
wa man silay suroy-suroy diri sa among
A1 ayuda nga para sa among business.. okay ra
labing maayo.. pero wala jud masking isa,
okay ra balay ana didto pero sa business
wala jud.
Ay ang amo a lang jud..ang amo a lang jud
tang gusto like unsay tawag oy..like mga
DTI or unsa ba nga ma kuan gane nga unta
pag naay ma expire mabalik gane sa .. sa
A2 supplier ang item or pwede rapud I change
ana mao rapud na amo a Ang gusto nga
nahitabo gane sa mga..sa mga Kuan gane
provincial distributor kay kasagaran man
gud didto mi naga kuha sa regional supplier
A3 Kana… oo mababa… baba ang taxes pero
murag lisod naman jud na… lisod na kaya
na anuhon… kanang mag progressive nato
dinhi ah sa ato ang especially ang (name of
place) daghan ang Ang mga tao nga kanang
dayo makahatag jud na sa amo a nga … ug
kanang mga daghan adto an ba pareha anang
(name of place) ohh yeah kanang mga
daghan mga.. unsa gane tawag ato sa bisaya
di kaayo ko maka explain diretso… ahh
kanang mga ing ana tourist spots ano… Kay
diri man mag check in.. mag stay man gud
na sila. Pero kami dili jud noon mi maka
ano… mura mig ma ano diri kay kanang kini
man gud (name of business) known na diri
sa (name of place) kay siya ang pinaka
barato and limpyo kaayo so daghan jud
mi..everytime fully booked . Daghan mig
Kuan… dili lang mi makahulat kanang Kuan
ano.. Kuan among Gina ano diri kay
reservation gi na ano sa among receptionist
nga everyday naa mi reservation in one
room.. tagpila mga 1 week or 2 weeks …
long stay sila naay 3 months.. 6 months
pareha atong nag install Ang (name of
business) dinha so nag stay sila from (,name
of place) nag stay to sila I think mga 6
 months… so long stay mi diri ug kanang
Kuan depende jud sa imoha mag ing ani kag
business ikaw na jud mismo owner how you
run your business… in your own nga
makakuha kag mga maayo man gud man ng
mo adto kag gawas maka ano Kay ma.. ma
rotate nimo nga nag ing ana sila oh.
As I've said Wala siyay natabang… ahhh
during that time or we're going to face the
inflation.. actually maulaw sad mi mangayo
ug tabang kay it's not really Kuan man
gud..tawag ani. Basta kung ano…basta
mayroon kami yung kang naman mi not
necessarily mag ask mi ug help sa
government as I've said dili siya it's not
basic commodities nga kuan..kay occasional
lang man ang rental as long as maka sweldo
m,i makapakaom mi sa among tauhan. Let it
be.. either we can save, either we can.. we
can even extend our help to those who are in
needs.. ana lang . Ahh Kuan. Due to
humbleness ana jud among patakaran even
naay magkinahanglan sa among help
especially rentals sa during the wake of
their love ones we can let them borrow ana
lang naman.. simple lang naman ang kuan
A4
namo… tax incentives… during that time
nag offer ang government ug kanang.. unsa
gane to…nag offer sila ug kanang… sa
bayranan sa mga tauhan there benefits ba
nga I staggered paghatag okay lang… not
necessarily na during those days, those
months na nagkaroon ug crisis due to
pandemic nga monthly pud mi… pero
kalooy an sa ginooo with humbleness
gibayaran sad to nako monthly kay we
cannot.. kay Kuan man gud di ta makabalo
ato nga time kay pandemic I see to it kana
lang kay naubos jud ang savings kay for that
matter nakaubos jud jay gibayaran nako sila
monthly ato nga time pero nag offer… last
naman nako na recognize nga nag offer ang
government nga they can give benefits like
SSS, PhilHealth, pag-ibig nga I staggered
lang paghatag.
 Ambot Wala koy idea… wala.. okay raman
siya.. ambot Wala koy idea unsay
A5
government support.. Wala. Wala siya na
apektohan.
A6 Siguro through monetary.
I think any form of government support or
government ayy any form of help from the
government could also.. could already be
considered as a great help in the said
problem. Siguro ang gibuhat lang sa
A7
government kanang enough naman para sa
amoa, kanang they.. they went here to check
if still.. kanang… going.. kanang we are still
conducting the said business. Murag moral
support sa among part as a business.
Sa amoa kay katong sa PCA sa kuan sa DA.
A8
Monetary support.
Uhmm sa akoa pud no, much better in form
of ano… in a form of money. Oo, monetary..
even if ahh gamay lang nga ano… gamay
lang nga kumbaga pang additional capital. If
ever lang nga maisip sa government.
additional capital para sa small time… para
sa mga small time business owners kay
syempre affected pud sa ing ana nga
scenario ug taas ang presyo taas ang raw
materials, mutaas ang presyo sa mga
palaliton which is muano pud… mu low pud
A9 ang inomce sa amoang business. Low ang
income sa busines tapos ang expenses kay
steady lang which is burden pud para sa
amoa. So kung… if ever lang nga naay ma-
ano ang government… matabang ang
Government, uhmm.. pwede pud in terms of
goods pwede sila musupport ug kanang
gamay nga goods para sa mga additional
kumbaga additional na mga goods para sa
store para sa small time business or much
better in a monetary nalang. Kung if ever
naa.
A10 Dapat unta pantay no. Kuntahay kuan…
ahh.. mutaas ang kuan. Mutaas ang gasolina
 hinuon ug mutaas ang gasolina, mutaas man
sad ang tanan. Kay dapat unta bagsak pud
ang gasolina unta, mubagsak pud unta ang
palitunon. Dili kay pag bagsak sa gasolina,
hastang taasa.. mao ra man gihapon.. wa
man gihapon. Dapat mao unta nay kuan sa
gobyerno.mapantay unta. Kuntahay ang mga
palitonon mubagsak. Ang gasolina,
mubagsak… ang mga palitonon. Pero karon
dili man.. tanan man nanga saka.
Hmmm…. Sa amoa mam….lower electricity
bill - ahh electric bill po. Mao lang jud
amoang ma kuan… or sa kanang kuan mam,
services pud sa water district siguro. Kanang
kay package namna gud amoa mam. Na
A11
kanang with shampoo na and blow dry. Inig
ka morning kay medjo hinay then affected
mi ana kay mag explain pa mi sa customer
kay kanag ganing wala shampoo then apil
baya na sa ilang services na gibayaran.
Kana lang jud siguro kanang ma less ang
mga…mga…. Unsa ganiy tawag ani…..ma
A12 less lang jud ang pamaliton. Kay at least..
Necessity man kanang importante jud baya
ang glasses.
Exemption sa pag bayad sa mga benefits kay
dili kaya sa among amo mag bayad sa
A13 benefits. Kay katong pandemic man gud
although gi wave nila pero gipabalik man
gihapon gud.
A14 Ayuda..oo siguro additional capital.
A15 we are in need of additional capital
 Thematic Analysis

RESILIENCE IN THE AFTERMATH: UNVEILING THE STRUGGLES AND COPING

MECHANISMS OF SMEs IN THE FACE OF AN INFLATIONARY CRISIS

1. What are the struggles encountered by SMEs due to an inflationary crisis?

Audit Formulated Clustered
Significant Statements
Trail Meanings Themes
Ang presyo namo katong crisis nitaas kay nag
RQ1, Increased prices of
add man pud gud among mdm sa bundle gani.
A15 raw materials

So karon na sigeg taas ang gasolina,

RQ1, Increased prices of
nag sige pug bagsak ang bakal. A10 Price Hike
commodities

Pag increase sa commodities and pag baba sa RQ1, Decrease of

buying A6 customer’s buying
power sa atong mga consumers. power
Makuhaan ang mga customers tungod kay
mahal na RQ1, Forced to cater
OA9 fewer customers
ang pamaliton. Dili na kaayo maka-afford ang
uban ug palit.
Less jud ang customer karon.
Less among pasyente, less pud among
income.
RQ1,
A12, Loss of
Customer attrition Customers
Kato mingaw jud kaayo. Ni baba pud among A13
sales
ato asta among customers nangawala ang
uban.
Sa pag taas sa among price naa juy uban na Customers sought
dili na jud kaya ang price so nangita silag mas RQ1, more affordable
barato. A11 options from other
stores
Dako pud siyag epekto sa amoa as small time RQ1, Unfavorable
business owners kay syempre one factor nga A9 financial condition
because of inflation rate mugamay ang halin.
Mugamay ang imohang halin or mugamay
ang imohang income but still ang imohang
bayrunon, ang imong expenses, labor, mga ing
ana is steady lang gihapon.

Medyo malugi mi basta mutaas ang Experience

panaliton. RQ1, financial loses
Pag mutaas ang panaliton na ginagamit A5 when expenses go
sa pagbuhat sa among mga baligya. up
Less jud ang customer karon. RQ1, Reduction in
Less among pasyente, less pud among income A12 overall revenue
Kato mingaw jud kaayo. Ni baba pud among Decrease in
sales revenue due to a Low income
RQ1,
ato asta among customers nangawala ang A13 decrease in the
uban. number of
customers

Mura syag ni baba jud. Ni baba jud ang

among sales ato na time. Wala kaayoy
RQ1, Level of sales
mamalit mao to ni baba mong sales, unya ni
A14 decrease
baba sad ang amoang income.

Matagbaw kag huna huna ug paano nimo i- Slow

survive Business
ang imohang business kay of course, daghan Operations
ka ug challenges.
Mugamay ang imohang halin or mugamay RQ1, The business is in
ang imohang A9 a steep position
income but still ang imohang bayrunon, ang
imong expenses,
labor, mga ing ana is steady lang gihapon.

So karon na sigeg taas ang gasolina, nag sige RQ1, Decrease in

pud A10 demand
ug bagsak ang bakal. Syempre mag bagsak
ang bakal,
mag mingaw ang negosyo. Mingaw gyud ang
tanan.
Ma feel gyud nako ang ka mingaw sa
negosyo. Mao nang mag bawas gyud ug tao
Nagkahinay jud ang amoang business dri kay
RQ1, Shift in consumer
dili man gud kasya known na paliton
A13 priorities

Ang mga guest namo diri kay nag lessen jud. RQ1,
Lisod i-run ang business namo kay crisis man. A3 Reduction in sales
Wala kaayoy naga check in.
Na apektohan among pag sweldo, nadungagan
ang rest day, ug nakuhaan ang adlaw sa pag Compromise
RQ1,
duty. wages of
A15
Naay uban tag 3 days na lang ang duty. employees
Employee
Syempre sa trabahante nag lay off mi. Tapos
ang imohang sweldo wala nitaas pareho lang. RQ1,
A8 Lay off employees
Unya ang iyahang value mubaba kay
mumahal man ang panaliton
Kanang ang customer kay naa juy uban na mo
Customer
reklamo kay pag mag taas man gud ang RQ1, complaints of
panaliton kay magtaas pud mi. Mureklamo A5 sudden changes of Customer
sila kay inig balik nila matingala sila nganong
price Complaints
nagpataas mi.
Nag bagulbol ug taman pagkabalo nako na
RQ1, Customer unease
nitaas na sad ug maayo ang palitunon. Pati
A15 about elevated
ang customers mag bagulbol kay magpa taas
prices
man pud mi.

2. What are the coping mechanisms employed by SMEs to address an inflationary crisis?
Audit Clustered
Significant Statements Formulated Meanings
Trail Themes
Kay kuan man mam if pababaan namo RQ2, Passing on the burden
[among price]- i-try namog kanang maka A11 of rising costs to
less mi or something unsay maka save customers
me.Wala man gyuy laing option mam mao
lang to na ang electric bill namo na mura
kuan gi pataasan namo. Kay nitaas ang
kuryente mao to nitaas pud among haircut
[pricing]
We need to increase the price of our
RQ2, Choosing to sell at a
customer service since we think that’s the
A7 higher price than usual
best way to cope with it.
Para dili malugi, among gihimo kay nag Increasing price of
pataas lang ug price. Same lang [ang size sa RQ2, products without Increasing
product] pero nimahal sya A14 altering price
size/portion/quality
Actually, ready gyud mi pirme. Kay sa amoa
man gud naga base ra man pud mi sa amoang
margin, syempre business man, buy and sell Using the average sales
so dili, kung sa business, dili kaayo RQ2, to determine how much
apektado. Kay ug unsay nag taas dinha, patas A8 stocks will be
an lang pud nimo ang kuan. Ug mubaba ang purchased
value sales, babaan man pud nimo ang
buying
Kelangan kung unsa lang tong mga
importante nga basic need or basic na kuan
sa store, kumbaga basic needs sa mga tao
mao lang sa jud na imong I priority kaysa.. Lessen
or else kanang never ka mag stock ug Ensuring the purchase Purchase of
daghan… nga muabot lang pud sa time nga RQ2, of necessary products Product
maano ra ma expire or kanang mga dili na A9 to prevent
kay sya mahalin. Para dili pud mag stock up overspending.
imong capital so sa ing ani na panahon,
especially nga naglisod ta, because of mahal
na kaayo na palaliton, so dapat wise ta sa pag
huna huna ug unsa lay maayo para sa store
Correct na pag purchase ug mga product.
Dili ka mag pataka nalang ug purchase ug
mga goods RQ2, Refraining from over-
A9 buying stocks.

Gi sale jud siya dapat para mahalin siya and

di ma abtan ug expire. Ing ana ra jud among
Offering promotions to
usually ginabuhat, kay kuan man gud sa mga RQ2,
capture the customers'
beauty products kaning bawal gane siya A2
attention Sales
ibalik gane sa supplier once nga napalit na
nimo sa imoha ra jud siya kutob promotion

Implementing creative
Nagpa free wash sya sa every bundle sa RQ2,
strategies to market and
customer A15
sell the products
 3. What forms of support do they need from the government to help them overcome
struggles due to an inflationary crisis?
Audit Formulated Clustered
Significant Statements
Trail Meanings Themes
Sa amoa kay katong sa PCA sa kuan sa DA. Monetary support
Monetary support. RQ3, from the
A8 government

Uhmm sa akoa pud no, much better in form of

ano… in a form of money. Oo, monetary..
even if ahh gamay lang nga ano… gamay lang Monetary
nga kumbaga pang additional capital. If ever Support
lang nga maisip sa government. RQ3, Cash assistance
A9, A6,
A15
siguro through monetary

cash assistance
Ayuda..oo siguro additional capital.
Kailangan RQ3, Additional capital
OS3 support for funding Additional
kaayo namo na karon
capital
We are in need of additional capital RQ3, Capital add on for
OS6 the business