Economic Impact on Regional Businesses
How COVID-19 is affecting firms
COVID-19 shocks operate through
many channels, but the
magnitude and who is more
affected is hard to predict.
The PH COVID-19 Firm Survey
measured the impact of shocks
on firms' sales and employment,
their operations, expectations, as
well as their adjustment
mechanisms and access to
government support.
Lockdown effects
Public health measures require
non-essential businesses to close
Temporary shock, targeting non-essential
businesses, mostly in retail, hotels/restaurants
(tourism) and personal services.
Demand shocks
Economic downturn drives down
demand domestically and abroad
Broad-based shock. Will especially hit firms
producing durables, apparel/textiles and those
reliant on export (manufacturing & services-
e.g. tourism).
Supply shocks
Decline in labor and intermediate
inputs, global value chains
disrupted
E.g., firms that rely on imports are affected.
Financial shocks
Opportunities for finance
becoming further constrained
Deterioration in availability of credit while
demand increases will affect access to finance
Uncertainty
???
Uncertainty is driving down
investment and innovation
Responses by firms
and government
Employment measures
Firms can adjust by tightening their
labor force and wage bill
Digital Technology
in
Firms can adjust by adopting new digital
technology and business models
Government Support
Governments can provide fiscal
support to firms facing negative shocks
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