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THE IMPACT OF THE COVID-19 PANDEMIC ON FIRMS:A SURVEY IN SM CENTER, ORMOC CITY, LEYTEBy: Cortes, Shenitte Jyne G. Destacamento, Kristine Jan M. Eamiguel, Jojie F.Year 2 January 2022, Saint Paul’s School of Professional StudiesA Survey Study Presented to the Faculty of Saint Paul’s School of Professi...

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THE IMPACT OF THE COVID-19 PANDEMIC ON FIRMS: A SURVEY IN SM CENTER, ORMOC CITY, LEYTE

By: Cortes, Shenitte Jyne G. Destacamento, Kristine Jan M. Eamiguel, Jojie F.

Year 2 January 2022, Saint Paul’s School of Professional Studies

A Survey Study Presented to the Faculty of Saint Paul’s School of Professional Studies in Partial Fulfillment of the Requirement for the Degree of BACHELOR OF SCIENCE ACCOUNTANCY MATHEMATICS IN THE MODERN WORLD SAINT PAULS SCHOOL OF PROFESSIONAL STUDIES

Submitted To MMWORLD 497 Instructor Sarah H. Agner, LPT

RATIONALE OF THE STUDY The COVID-19 is a rapidly developing worldwide threat that, like any pandemic, wreaks havoc on health systems, costs lives, and puts the global economy and security at risk. It has marked a turning point in technological development, production, and application.

According to data from World Health Organization (WHO) and Johns Hopkins University, as end- of January 2022, there have been three hundred million cases around the world, causing nearly 5,600,500 deaths in around 215 countries. The COVID-19 pandemic is a public health emergency and is likely to continue to cause serious public health damage including major infectious diseases, mass unexplained diseases, major food poisoning and other serious public health issues. COVID-19 has taken a heavy toll on rural livelihoods. Loss of income and job opportunities were overarching challenges in poor communities in the Philippines. Global economic growth is expected to decrease continually and according to the an OECD forecast, the global GDP growth rate will drop to 2.4% in 2020. The risk of uncertainty and global recession has increased greatly due to disruptions in the supply chain, shrinking demand for consumption and investment, significant weakening of economic activities, and damaged market confidence. These factors are severely testing the resilience of many economies, the level of governance, and the effectiveness of international cooperation.

The impact of the epidemic on Philippines’s economy is significant. The Philippines economy suffered a deep recession in 2020 due to the impact of the COVID-19 pandemic, with GDP contracting by 9.6% year-on-year. This was the largest annual decline ever recorded since National Accounts data series for the Philippines commenced in 1946. The economic impact of the corona virus pandemic reduced foreign direct investment (FDI) by 24.6% to 8.7 billion in

2019. As a result of the COVID-19 crisis, the Philippines’ national debt increased by 26.7% to P9.7 trillion in 2020. As of the end of January 2021, this had risen to P10.3 trillion, thanks to the government’s decision to take out a new bridge loan from the BSP (Bangko Sentral ng Pilipinas, or Philippine Central Bank) to cover its financial obligations.

Revenue fell by 9% in 2020 due to rising expenses. The Bureau of Internal Revenue’s collections fell by 10.3%, and the Bureau of Customs’ collections fell by 14.7%, resulting in an 11.4% reduction in tax revenues. The Philippine government faced a P1.37-trillion budget deficit in 2020 due to higher expenses and decreased revenue.

As the basic unit of the national economy, the operation of firms is key to the development of the national macro-economy. Therefore, it is necessary to understand the status of firms, their coping strategies, and the need for government policies to respond to the impact of the COVID-19 pandemic. Researchers have begun to analyze firms’ marketing innovation strategies and strategic responses to the crisis during the pandemic. In addition, some industries have also been analyzed in order to propose more targeted countermeasures for the pandemic. However, the conclusions of these studies have not been empirically tested.

In this context, in order to explore the impact of the COVID-19 pandemic on firms in Ormoc City, Leyte and to suggest how public policies might be formulated to deal with the crisis, we investigated firms and retail stores renting at SM Center Ormoc (the city with the highest total assets in Leyte). The purpose of this research was to investigate 1) the impact of the pandemic on firms, 2) how they responded, and 3) and their expectations for the future. Some supporting policies are recommended.

IMPORTANCE AND GOAL OF THE STUDY This research is made with the aim to provide to the impacts of COVID-19 to the firms in SM Center Ormoc. This study investigate the specific ways which COVID-19 affect the firms by doing a survey about factors including: how they have been affected, the operating pressures they are facing, current situation of their raw materials, how they are coping with the cash flow shortage,self-help measures they are doing,how government can help them, and employees they have currently. Benefiting the study are the following: Firms in SM Center Ormoc The direct recipients of the output of this research are the firms in SM Center Ormoc that have been greatly affected by COVID-19. Any improvement of this pandemic can pave the way of producing better product and producing abundant materials that could supply the needs of the people in Ormoc. The LGU in Ormoc This study will be beneficial to the LGU of Ormoc because through this research LGU of Ormoc may purposefully discover how they could help the firms in SM Center Ormoc overcome their situations. People of Ormoc The research benefits the people in Ormoc as the direct customers of the firm they could be benefited since if all of the firms are fully open during the pandemic, it will not be difficult for them to access things. LIMITATION OF THIS STUDY Our study has several limitations that provide opportunities for future research. First, this study can only be viewed as a preliminary study and more follow-up tracing investigations at different stages need to be conducted in order to monitor the continuing impact of the pandemic and the effectiveness of public policies and firms’ responses. Second, this study focuses on

Ormoc, more surveys should be implemented in other countries to explore how COVID-19 has impacted other cultural, social and governing systems. A cross-sector analysis is also needed in order to get more specific suggestions for different industries in different regions.

DATA PRESENTATION The research protocol was based from the given descriptive measure and computation of collection and presentation of data, the sample size. A survey was designed to be carried out in the firms and retails store renting in SM Center Ormoc, Ormoc City.

The minimum sample size was calculated based on the formula below:

Sample Size= =

= =

= = 44.24 / 44

(1) where E = 0.05/5% (margin of error); z = 1.96 (confidence level); σ = 0.5; and N= 50 (population) Based on the recommended number of participants, the estimated minimum sample size was 20-30 respondents. However, in order to improve the reliability of the data, the researchers utilized one of the methods in collection of data, the sample size. The estimated minimum sample size is determined to be 44. The survey sample included 44 firms and retail stores in SM Center Ormoc. These firms were selected from a list of 50 firms published by the SM Supermalls website renting at SM Center Ormoc and are drawn via random draws.

Questionnaire Development The questionnaire was developed based on previously mentioned from news and articles concerning the drastic and sudden change of normality. The final questionnaire included 16 questions distributed in four categories: demographic characteristics (3 questions); the impact of

the pandemic on firms (6 questions); firms action (5 questions); and firm perceptions (2 questions) (Appendix 1-Questionaires).

Data Collection The survey was carried out from 06 December 2021 to 08 December 2021. Three researchers personally visited each firms and retail stores with compliance of the health and safety protocols and have asked permission from the executives and employees present of the randomly drawn and picked firms and retail stores. Participation in the survey was fully voluntary and written consent was obtained from each participant. The objectives of the study, confidentiality of individual information, and other ethical considerations mentioned in the survey guidelines were explained to the participants prior to data collection. They were asked to answer as many of the questions as they could. However, if they were not sure about the answer, they could simply leave it blank. Altogether, 44 anonymous questionnaires were collected.

CONCLUSION While many firms in Ormoc City have maintained overall stability, others have experienced a halt in their operations or faced closure. Almost all the firms in our survey are willing to transform into online marketing, remote office work and digital operations. Half of the firms believe that there will be a certain loss this year, and a very high percentage of firms expected a decreasing trend in the city’s GDP growth. There is a need to fully understand the impact of the epidemic on consumption and the difficulty of promoting the recovery of consumption, also in terms of how industry has been affected by this pandemic. Policies need to be introduced to profoundly lower production costs for firms, and help firms survive this difficult period, and gradually return to normal business operations.

RECOMMENDATION

References: 

Banko Sentral ng Pilipinas (2021) About the Bank Retrieved from https://www.bsp.gov.ph/SitePages/AboutTheBank/AboutTheBank.aspx

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The Philippines Economy and the Impact of COVID-19. Retrieved from https://www.futurelearn.com/info/futurelearn-international/philippines-economycovid-19 

Johns H. (2022). COVID-19 Data in motion: End of January. Retreived from https://coronavirus.jhu.edu/

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OECD Economic Outlook. (2021) A Balancing Act Volume 2021, Issue 2 The global recovery from the COVID-19 pandemic is uneven and becoming imbalanced. The OECD Economic Outlook, Volume 2021 Issue 2, highlights the continued benefits of vaccinations and strong policy support for the global economy, but also points to the risks and policy challenges arising from supply constraints and rising inflation pressures.

Retrieved from https://www.oecd.org/economic-outlook/

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Rajiv B. (2021). Philippines Economy Hit by Rising COVID-19 Wave. Retrieved from https://ihsmarkit.com/research-analysis/philippines-economy-hitby-rising-covid19-wave-apr21.html...