REAL TALK: 10 Reasons Why Businesses are Closed in GCQ, and 5 Reasons Why Businesses SHOULD Open

The company I’m working with officially opened last June 1 (Monday) at the start of GCQ.

However, I noticed that while we were open, many businesses remained closed despite already being allowed by the government to open. See the scene in SM Megamall, one of the largest malls in the country. Despite retail shops already allowed to open and being charged rent, the stores still remain stubbornly closed.

Mega 3

Here’s a brief summary of this Topic:

SummaryLet’s go into it one by one.

Ten (10) Major Reasons why Businesses Remain Closed in GCQ:

There’s a lot of reasons why a business would remain closed.

From the Employee Side:

1. The Department of Transportation’s policy of banning public buses and jeeps on the street up until June 21, 2020 make it difficult for workers to commute to work.

Commowealth Avenue traffic MECQPhoto Source: Rappler

While shuttle buses are NOT a requirement for businesses to provide during the General Community Quarantine (GCQ), the limitation of public transport give people the excuse of not reporting to work.

2. Most workers are still enjoying the second tranche of the Small Business Wage Subsidy Program worth Php 8,000. If they still have money, they’re not in the rush to report back to work. Deadline is June 15 for the second give.

3. Workers do not feel the excitement of coming to work especially as many businesses did not provide them ANY AID during ECQ. So when their bosses asked them to report, many are not willing to return working for heartless bosses.

Biruin mo naman, for 2.5 months, ni isang ayuda binigay sa kanila. How do you think they would feel when the boss asks them to report? Will they show up or will they look for another employer.

4.  Workers who are 20 years old and below, seniors and pregnant women are disincentivized to leave their home quarantine. Here’s a mother and child who was turned away from the door yesterday. The biggest malls in the country do not allow people to bring their children to the mall out of respect of IATF rules.

Adult

5. There’s an irrational fear that COVID-19 is lethal and dangerous, and hence, many workers refuse to come in because “takot sila sa buhay nila.” Businesses also do not want to be liable if workers contract COVID-19. Presently, here’s the latest numbers from the Department of Health:

DOH

On the Employer’s Side:

6. Everyone is looking at one another for guidance to open. Nobody wants to be the first out the gate. So nobody wants to open and be the guinea pig.

OLYMPUS DIGITAL CAMERA

7. Businesses are worried that if they open, there won’t be enough sales to sustain operations due to the market slump. So they might be bleeding even more money while adding on the burden of paying the payroll. Hence, they remain closed despite the malls charging them the rent:

bleeding money

8. They cannot convince most of their staff to come in and report. Hence, the businesses are forced to stay closed until they get enough people to come in. This is a problem when an employee is under agency, and the principal conveniently forgot about them during ECQ.

9. Businesses are in the process of deeply retrenching. DOLE requires you to provide a 30-day notice period. If they open, they still have to pay the worker for coming in during the 30-day notice.

If the business is fully non-operational, they only need to pay for the final pay + separation pay. Tipid ka ng isang buwan na pasahod. 

10. Businesses are conserving cash in crisis time.They are not thinking about the Employees’ salary and how to sustain a family’s expenses. They just want to save on capital, and will not open until they are really forced to by their landlords or the government.

cash is king

My Personal Opinion: Businesses Must Open from GCQ to Stop the Economy from Falling Off a Cliff.

Businesses SHOULD Open to Avoid a Disastrous Recession

It’s very crucial that businesses open to prevent the Philippines to enter into a recession, if we are not yet there already. According to Fitch Solutions, “The Q120 (first quarter 2020) reading came in below our expectations, and as we flagged, we are becoming increasingly aware of how significant the impact of lockdown measures can be on growth readings. As such, with the Philippines in lockdown through April and into May, the drag on growth will pull the economy into recession.”

The research firm predicts a downturn due to quarantine rules and less external demand for 2Q20 to 3Q20.

Look, the government has already done its part by now lifting the quarantine to GCQ since June 1. The different government agencies has supported the labor market by giving DOLE CAMP and SBWS. Now, it is crucial that businesses open and do their part in making sure the economy runs again.

This most-businesses-are-closed scenario sincerely troubles me. It’s been a week and this is the state of one of the largest malls in Metro Manila:

While some businesses are open — ours included — many others remain closed. This is a big problem, as prolonged closure has long-standing impact to the Philippine economy, labor market and the consumer sentiment.

In April 2020 — Note this is April, NOT May or June 2020 — the Philippines posted a  17.7% unemployment rate due to the ECQ. This is disastrous as the number of 7.3 million Filipinos unemployed underestimates the true condition of the labor market.

unemployment rate

I sincerely believe that the situation is bad enough that for the first time in so many years, the usually pro-Labor DOLE has pre-empted the dire job market situation and asked businesses to scale down, adopt flexible-work arrangements, negotiate with workers a reduction of wages instead of closing down entirely.

DOLE: DON’T CLOSE. JUST SCALE DOWN

MANILA, Philippines — The Department of Labor and Employment (DOLE) urged businesses to scale down and employ flexible working arrangements instead of closing to avoid the displacement of more workers.

“Kaya kinakausap namin yung mga businessmen, mga managers na wag naman kayo magsara, magsuspend na lang kayo. Para sa ganoon ay hindi mawalan ng trabaho yung workers,” DOLE Secretary Silvestre Bello III said Thursday during the Laging Handa briefing.

(We are talking to businessmen, managers not to close and instead just suspend operations. This way, workers will not lose their jobs.)

Bello said the agency recommended businesses to let half of their workers report for a week and the other half the following week so that they will not lose their jobs.

“Our focus is to maintain the employment of our workers. Maaaring mababawasan sila ng kita pero nandyan pa rin yung kanilang status as employees,” Bello said.

(Our focus is to maintain employment for our workers. Their income may be less but at least they retain their employment status.)

Bello said the coronavirus disease (COVID-19) pandemic has so far displaced nearly 2.5-million workers nationwide.

The lockdown measures in several regions since mid-March shuttered most businesses, excluding those involved in basic necessities like food, medicine and health care.

But the government has slowly eased restrictions by allowing the partial resumption of businesses even in areas under modified enhanced community quarantine.

Here are Five (5) Major Reasons why Businesses Should Open:

1) Do it for your Employees. They need to eat.

When a business opens, then everyone gets to come in. Even with a reduced workweek, at the very least, people will get a salary for the days they come in.

The important thing to look at is PAYROLL PERIODS. 

For example, our payroll period is on March 11-25, payout is on April 6. Given that ECQ started on March 16-17, their salary was placed on hold all throughout ECQ. Instead of salary, the company gave conditional aid in April and cash advance in May to tide everyone over throughout the ECQ.

money

This ensured that everyone had enough money to survive all throughout the ECQ period. This also ensured that staff can have money immediately a few days after they return back to work.

When they came back, everyone received their salary on June 8 (As June 6 was a Saturday). This salary consisted of the March 11-25 cut-off, incentives, and what not, which is enough to tide them over the next cut-off.  On June 21, they will receive their pay for May 26 to June 10, which is more than enough to tide them over the next cut-off and more.

The problem is when people are only asked to report on June 22, when buses and jeeps are now allowed to run. If this happens, the next payroll will be on July 6. This is ONE MONTH more for employees to survive just on the second tranche on SBWS alone. By this time, the money is gone, and there’s no more extra money for pamasahe (Commute fare). Employees will suffer if they do not start working and earning money.

Hence, it’s crucial for employers to start giving people work so that employees do not need to suffer with zero income for a prolonged period of time. It is bad enough that during ECQ, people had zero income for 2.5 months. Now that it’s GCQ, people must now earn income so they can quickly return to their normal lives.

2) Do it for your Business. Your customers need to know you are alive so they can seek you out. Your employees know you’re in stable footing to work their best.

If you open, you have made a commitment to restart your operations, and are now fighting to survive. Even if sales are lower due to less people buying, at the very least, you’re signalling to everyone that you’re alive, and ready to rumble.

As businesses now have to start paying their rent and their people, you can motivate your staff to fight for their lives, to ensure maximum job retention.  Personally, I told everyone to do their best so that the business can survive and everyone will be gainfully employed. Thankfully, employees understand and everyone will do their part in ensuring that the ship floats.

sink or swim

You can’t swim if you don’t even go near the water. If you close, there’s no way to know how bad sales will be. There’s no way for employees to push, and as time goes on, it becomes increasingly easier to remain closed, as this status quo is easier to maintain.

You may justify closure with, “At least, I’m closed and losing less money than to open and lose even more money if I don’t sell.”

However, this thinking is terribly short term.

If all businesses think the same way, we are SCREWED. For the economy to survive, everyone MUST open.

If many businesses are open, more employees go back to work. If employees go back to work, then they have the money to buy things for themselves and their family, which fuels profits, and enables businesses to employ even more people and drive even more consumerism.

Retail groupsSource: Retail groups in Executive plea: Shops need to open to survive, Irish News

If you prolong the opening, you’re just encouraging uncertainty amongst management and your people. Your employers may think that the business is failing, which is why you’re not opening. Nobody wants to work for a sinking ship. Fear and anxiousness will win.  Opening signals to all stakeholders that the business is strong and ready to ramble. Do not let your fear rule your thoughts in a way that may be a self-fulfilling prophecy.

3) Despite what fear mongers are saying, it is actually “safe” for businesses to open. 

As I’ve mentioned repeatedly before, employers need not be afraid of opening in GCQ. For one, the government has issued very reasonable policies for companies to open as follows:

  1. Employers are not liable for employees when they contract COVID-19 if the staff has SSS and Philhealth coverage.
  2. Employers are not mandated to provide shuttle buses to employees in GCQ and MGCQ.
  3. Employers are not mandated to do mass testing for their employees (except in a few selected LGUs like Paranaque)
  4. Employers do not need to spend a lot of money to test their staff if they choose to do so. FDA approved testing kits cost on average Php 450 per pax.
  5. Employers can now operate provided they follow DTI and DOLE Health Guidelines in the Prevention of COVID-19.
  6. There is a reasonable safety protocol to follow in case someone is COVID-19 positive.
  7. Employers do not need to pay their staff if the staff does not work.
  8. Employers can put their staff on Flexible-Work Arrangements (FWA) following informing DOLE seven (7) days prior.
  9. Employers can legally put their staff on floating status for a limited number of months provided certain conditions are met.
  10. Employers CAN Legally Negotiate for Lower Wages and Wage-Related Benefits with Employees Upon Mutual Agreement for a Limited Time.
  11. Employers can legally terminate and lay-Off a staff for Just and Authorized Causes during ECQ, MECQ and GCQ.
  12. Employers can fully close their businesses without their employees’ consent so long as they follow due process.

The government has done its part by now lifting the quarantine to GCQ since June 1. The different government agencies has supported the labor market by giving DOLE CAMP and SBWS. Now, it is crucial that businesses do their part in opening to ensure that the economy does not fall into a cliff.

falling-off-the-cliff

The economy is hanging at a thread. It is crucial that every business, big or small, do their part in making sure that the economy recovers.

4) There’s no better time to open so you can plan ahead post-ECQ. You will Never Get the Answers Unless You Open.

If your staff is afraid of coming in to work, then so be it. Open operations, ask them to report to see if they’re in or out. If they don’t want to come in, start the due process so that you can find a replacement for them.

If you have uncooperative or pabigat staff, open now so you can retrench them, pay them their separation pay and send them off their way. This is the best time for businesses to lighten the load and come back leaner, stronger and wiser.

retrenchment

If your sales are not doing very well, find out as early as now so you can pivot in the hopes of finding a product that would make you money. A friend of mine was forced to close his massage parlor due to COVID-19, but is pivoting to another service business where his girls can now be hired to do basic tasks for people who do not want to go out of the house.

If your partners do not want to throw money into a losing money, this may be a great time to buy them out when price is cheap.

If your landlord is unreasonable, now is the best time to pre-term the contract and move to another office that’s smaller and more reasonably priced.

RC99 719 SqM PEZA Accredited Office Space for Rent in Cebu Busin

You can only do these ONCE you open. Before you open, everything’s just a plan in your head, and you won’t have the actual numbers to back up your studies on what to do to survive post-COVID-19 season. But if you open, you can see the actual situation and make better decisions than just jotting down ideas on the back of a tissue.

5) Businesses Should Do our Part and Take Responsibility in Making Sure the Economy Runs Back Again

So many companies are waiting and seeing if the government is giving them additional aid to motivate businesses to open. Presently, DTI has unveiled a low interest 0.5% loan for MSME to Medium Sized Business to help companies open. However, many businessmen feel that this is not enough.

The amount of Php 500,000 is way too small!” A businessman may complain. “I have 100 people. That Php 500,000 is not enough for my payroll.”

The biggest misunderstanding businesses may have with government is that businesses feel that the government SHOULD support them bounce back. They feel that given that COVID-19 was a black swan event, it is the government’s obligation to ensure businesses do not die.

Drawing of graph

To be fair, they have a basis for their cry for help. According to the National Statistics Office:

It is widely accepted that micro, small, and medium enterprises (MSMEs) are a major driver of the Philippines economic growth. MSMEs accounted for up to 99.6 percent[1] of total enterprise and employ at least 62 percent1 of the Philippines workforces. MSMEs also contribute to a significant portion of the country’s Gross Domestic Product (GDP) with 36 percent[2] of the total GDP. However, like many other MSMEs around the regions, MSMEs in the Philippines have difficulties in sustaining and growing their businesses.

Source: Asean.Org

According to Senate.Gov:

Sector Profile

I’m employed in a small business so I should know — Getting capital now is hard. We are barely getting by. The market is experiencing a big slump. And there’s too much uncertainty in the environment.

However, the wheel must start turning so that we can get the market cycle back up:

Healthy

One business cannot do it alone. Majority of the businesses must work together to restart the economy and lift it up to the point that it would seem that COVID-19’s ECQ was just a blimp in a bad dream. Now is not the time to think of capital preservation, but rather for businesses to work together so that we can boost the economy back to where it was where it was before.

Now is NOT The Time to Be Swapang 

Employees, please do your part in reporting to work when your Employer asks you to.

Let’s not be selfish and ask for hazard pay, shuttle services, or too many conditions just for the employer to get you to work.

For One, Hazard Pay is NOT MANDATORY for the private sector. Unemployment is in a rise, and if you lose your job, it’s not easy to find another job short term given that too many companies are freeze hiring and laying off people.

hazard

Huwag na tayong mapili sa trabaho. Gawin na lang ang ating makakaya to help our employers open so that the business will survive and everyone can have jobs.

To Employers,  please help the Employees get back in their feet by starting operations.

I know it’s a very uncertain market nowadays, but trying to preserve cash and stopping employees from working is doing nobody any favors. They and their family also need to eat, and they need the salary — albeit reduced hours — to survive.

Love your Employees.

You cannot say that you love your Employees and then tell them to stay at home and not work. That’s not loving your employees. To love your employees is to ensure that if they are GOOD WORKERS and are willing to work, to give them enough work so that their family can eat.

This is NOT charity by the way.

Charity is to give a hold out. To give them money that they do not deserve. What we are asking employers is to continue giving people jobs, even on a limited capacity. So that they can find their footing and walk ahead together.

back on feet

Let’s rip off the bandage and open our businesses. Because if we don’t do it now, then when will we do it? When our staff are starving and have no more money to report back to work?

Let us retrench if we need to do so. Let us make another strategy if that’s what we need. However, regardless on what you decide, it’s crucial that businesses decide to open together. Because while it may hurt us a little bit in the short term, it’s one way for us to WIN in the long-term and get ourselves out of this recession.

Are you game?

I am.

Please let me know if you’re opening soon. And if you’re not, why not?

Have a great week ahead!

 

 

 

About Tina in Manila

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