News

Private sector’s journey amid pandemic marked by fortitude, innovations

September 21, 2020 News

AT the same time a small store’s window is flung open in Muntinlupa, a woman crosses a narrow overpass in the eastern part of the metropolis; a bicycle in tow.

It’s another day of trudging on against the unknown but with a simple plan: both for Loida, the sari-sari store owner, and Elsa, the 30-year-old woman with the bicycle, it’s simply to earn something to get them through tomorrow. The fortyish Loida de la Cruz (not her real name) said earning something is better than shutting down the store entirely and surrendering whatever hope there is amid the Covid-19 pandemic and the lockdown.

These two women symbolize the fortitude and innovations that mark the private sector’s journey since the Duterte administration finally faced up in March to the realization that Covid-19 is a serious threat to public health and thus imposed restrictions. The gears of the economy slowed. A “New Normal” became a concept that must be operationalized immediately.

And like the woman on a foot bridge along Marcos Highway, bicycles are becoming an integral part of this operationalization.


Salary-deductible loan

ACCORDING to Elsa Garcia (not her real name), the bicycle is her only way of going back and forth from her home in Pasig to the office of DM Consunji Inc., the construction firm whose office is located along the stretch of the 117.5-kilometer Marcos Highway.

The series of lockdowns in Metro Manila and nearby areas constricted the movement of people but commuters, essential workers or not, who rely mainly on public transportation, were hit hard.

When asked for comment, DMCI, the listed engineering conglomerate led by the Consunji family, confirmed they have a bike-loan program to allow their workers to go to work when public transportation is impossible and remains a health-risk.

DMCI Homes, which also has several condominium developments along Marcos Highway, offered a bike loan program for qualified workers. According to the company, some 322 workers have so far availed themselves of the interest-free, salary deductible bike loan of a maximum amount of P8,000 (about $165.33), which they can pay for six months to seven months or more than P1,000 a month.

The developer said it is targeting some 4,981 of its workers as beneficiaries.


Expensive bikes

A PERSON familiar with the DMCI program said in response to BusinessMirror’s query said that DMCI Homes buys the bike and turns it over to qualified and interested workers.

“There’s no immediate cashout for workers,” the person said.

Workers can choose one of three types of bicycles the company offers. If they want more than the loanable amount, they will have to pay for the extra, the person added.

Using bicycles, one of the early technologies perfected by men, has become a great tool for commuters. Before the pandemic struck and the lockdown measures were imposed, it was unthinkable for many to ride bicycles to and from work, the person said.

The relatively cheaper price also pushed many companies like DMCI, whose workers are strong enough to bike to work, to offer such loan assistance. Motorcycles are more expensive in terms of outright purchase and in terms of gasoline and maintenance, the person said when asked why DMCI Homes chose bicycles.

Motor bikes or scooters cost at least P43,000 each, which is five times more expensive than a regular bicycle. But the cost, plus the need to have a license to drive one, turns off many people, especially construction workers, in the case of DMCI, or daily wage workers who are needed on site.


Risk of infection

COMPANIES like D and L Industries Inc. are also finding ways to assist their workers going to the site of this manufacturer of food ingredients, such as the oil and fats used to cook food, sanitation chemicals, bio-diesel, exports specialty plastics and other chemicals.

Most of its factory workers live near the plants; so companies that should be operational, as these workers are vital to public sustenance shouldn’t worry about their workforce, according to D and L CEO Alvin D. Lao.

“But those living far away need to sleep at the plants during the ECQ [enhanced community quarantine],” he said.

Living in a dormitory, which in principle should be near the workplace, has now become a critical form of urban affordable accommodation, especially aduring the coronavirus pandemic, according to a study of business school Insead (Institut Européen d’Administration des Affaires). Developers also called this type of dwelling as co-living spaces.

“What has become a thriving real estate sector in normal times, co-living has now proven essential in times of crises,” the study said. “The coronavirus pandemic not only impacts the economy but also affects how corporations operate and people live.”

With many employees unable to go to work or work productively from home, companies are forced to consider all facets of their business operations and craft business continuity plans beyond the corners of the office, according to the study.

“Both employers and employees have increasingly become conscious of the importance around the health and well-being of the workforce; and the coronavirus pandemic has reiterated the responsibility both parties have to ensure they help reduce the risk of community infections,” the study added.


Village store

CONSTRUCTION workers mainly account for the customers of De la Cruz’s store, which opens just before 9 a.m. and closes at 7 p.m.

In the village where her store is, those hours are the right time to do business.

Construction workers patronize her store to eat canned sardines for lunch, chug energy drink in the afternoon and feast on biscuits for snacks.

However, that was before Covid-19 pandemic struck the Philippines and the government enforced quarantine restrictions.

Nowadays, De la Cruz opens her sari-sari store at 10 in the morning and closes it at 6 p.m. The construction workers who used to sit on benches or loiter in front of her store have all travelled home to their respective provinces.

De la Cruz expected her customers will be replaced by families ordered to stay at home during the quarantine. She thought the stay at home order would force people to go out less and buy more from their local neighborhood. She was wrong.

“Most of them go to the supermarkets and grocery stores to buy food and essentials,” she told the BusinessMirror. “They buy in bulk as if they are owners of wholesale stores, leaving me with fewer customers.”

Between shutting down the sari-sari store and sustaining it even with fewer customers, De la Cruz said the latter is always the best choice. In the heat of a pandemic, she knows how difficult it is to find an income source.

De La Cruz vowed to ride or die with her business.


Expecting uptick

SUPERMARKETS, for their part, are hanging on a ledge as well.

People may be buying in bulk under the health crisis, but their visits to the malls, grocery stores and brick-and-mortar shops have decreased, thereby negating any gains business owners made from the shift to volume buying.

Steven T. Cua, president of the Philippine Amalgamated Supermarkets Association Inc., said in an interview that supermarket owners like him are waiting for Christmas to come and, hopefully, “save” their year. Cua said sales have been low the previous months, “but they could just improve—a bit—during the holidays.”

Cua told the BusinessMirror: “Technically speaking, it looks like we’re headed for bleak Christmas sales. However, knowing the Filipinos’ penchant for celebration during this season, sales may not be anywhere near last year’s, but expect an uptick from previous months’ low sales,”

If there’s one thing supermarket owners should do to trigger a holiday buying spree, it’s to hand consumers the best value they can get from whatever they have in a time of global crisis, according to Cua.

For one, this could mean more items in the usual noche buena basket or this could also mean the presentation of alternative goods in place of the staples, he added.

“Retailers and consumers alike definitely have to be creative,” Cua said. “The latter will have to highlight substitute products for Christmas celebration: canned luncheon meat [versus] ham, cheese food for real cheese, mayo substitute for real mayonnaise.”


Throw anything

GONE are the days when Filipino families would just throw anything into a grocery cart during their holiday shopping.

According to the Philippine Statistics Authority (PSA),   the jobless rate in July rose to 10 percent, from 5.4 percent during the same period last year. Unemployment rates were at their highest in these growth areas: Metro Manila, Southern Tagalog and Central Luzon.

The unemployment rate in the nation’s capital stood at 15.8 percent, and in Southern Tagalog and Central Luzon, it swelled to 12.4 percent and 10.9 percent, respectively. With the jobless rate still in double digits, the prospect for economic growth remains dim for the Philippines, economists argued.

For Cua, the private sector and buying public can only do so much for business to recover. He pointed to the government as the key player in the reactivation of industries.


Holiday spending

FOR instance, he said consumption during the holidays may receive a boost if the government decides to roll out a final round of its social amelioration program (SAP) for the most affected households.

“This may be helped if government is able to schedule another round of SAP or a form of soft loan nearing Christmas Day to inject some life into our consumer-led economy,” Cua said. As optimistic as this proposal may be, however, the Duterte administration has made it clear it is no longer distributing another round of SAP.

Duterte himself had repeatedly said he will no longer place Metro Manila under the strictest form of quarantine. His reason for such: the government has no capability to roll out another round of social amelioration. Further, locking down the nation’s capital would compel business establishments to shut down again to the detriment of the economy.

Without consumption boost from the national government, businesses are hoping to find an ally in their respective localities.


Extending help

In the case of Makati City, the Abby Binay-led administration in the country’s business center distributed its own version of SAP to its constituents during the first months of the quarantine.

Makati City Hall last month announced it is now directing financial help to businesses in the city struggling to survive the ill effects of the lockdown and the pandemic.

The citymayor said she has ordered the release of a total P2.5 billion worth of grants to be allocated to registered businesses in Makati.

“I have endorsed to the city council today an ordinance for the P2.5 billion Makati assistance and support for the business program,” Binay said in a recent virtual briefing.

Under the portfolio, Makati-based enterprises can apply for up to P100,000 in grant from the city government depending on how many employees they sustain. The grant will not be given to the businesses in the form of cash. Instead, it will be paid out to shoulder the salaries of their workers and payment to suppliers.

In exchange, those who will receive assistance from the local government are required to keep their labor force for a period of two years. Further, they are mandated to sustain operations for until 2022, and are therefore prohibited to close shop.


Physical office

BICYCLES may be of great use for many essential workers but not so for many white-collar workers or those working in offices in central business districts in Makati City or Taguig City.

Some big companies like the Aboitiz Group, for instance, are even discouraged from going to their physical office; they have to work somewhere else.

“You have to prove to them that you need to be at the office to even go there,” according to an employee of the Aboitiz group, whose office is located at Bonifacio Global City.

Before, the work-from-home (WFH) concept was avoided by employers and frowned upon by Human Resource departments, since work was then normally defined as physically going to the office, working at least eight hours a day, or 40 hours per week.


Experiments, trials

TODAY, such concept of how one should work has been thrown out the corporate window after the government ordered everyone to stay at home. Serendipitously, the Telecommuting Act was already in place—but not quite taken too seriously in many quarters—by the time the pandemic struck. And one of its chief sponsors, Sen. Joel Villanueva, said it didn’t occur to him, when the law was signed a year ago, that a pandemic wold happen and it would become so useful to not just a few people, but the entire economy and work force as well.  (See another Broader Look article, “Work from home: Legislative foresight helps keep economy running amid pandemic,” pages A4-A5, August 20, 2020)

Since the lockdowns started in mid-March, many office workers in Aboitiz have not seen each other, as they work elsewhere other than their office.

All coordination with everyone, such as staff members, are coordinated remotely.

Amy Melissa B. Malaluan of the Aboitiz Foundation Inc. said they coordinate directly with suppliers to pack goods for donation in specific quantities. For instance, she said a thousand pieces of face mask or medical gowns that will be given to a particular hospital must be packed in boxes from the source before these are picked up for delivery.

A chunk of the donation of companies passes through the Aboitiz Foundation, their corporate social responsibility arm.

Malaluan said the organization rents private vehicles or travel agents for delivery if their regular courier services are unavailable. Private vehicles or travel agents were part of the network of the company, normally being utilized day-to-day when needed or when company’s resources are short.

Even before the pandemic, Aboitiz Group’s food unit Pilmico Foods Corp., headed by now Aboitiz Equity Ventures Inc. President and CEO Sabin M. Aboitiz, has been experimenting with the WFH concept for their office workers. The Group allows its employees to work from home at least once a day every week.

The plan was, if the experiment is successful, to cascade the WFH concept to the entire business units of the conglomerate.


Office arrangements

JAIME Augusto Zobel de Ayala, chairman of conglomerate Ayala Corp., admits companies will have to adjust to the new demands posed by the pandemic, which he said should go beyond installing new technologies in a firm’s premises.

The Ayala group, known as a conservative company, has no choice but to implement a WFH policy.

The company said majority of its more than 50,000 employees adopted a WFH arrangement when lockdown measures were implemented mid-March on Metro Manila and key cities.

Zobel de Ayala said in a forum that the company is studying the feasibility of a hybrid work arrangement for their employees. He added they are also “re-imagining” the purpose of its physical office areas wherein only social activities, team meetings, town halls and tasks that require face-to-face interaction, such as collaborative projects and mentorship, should be done there.


Pandemic, possibilities

On the other hand, for tasks that require focus and concentration, such as writing and research, “work-where-most-productive,” or work somewhere else other than the office is more appropriate.

“As it stands, redesigning the relationship between work and the office already requires a high degree of openness, flexibility and trust,” he said. “There is a need for balance in these discussions, particularly in taking into consideration different corporate cultures, the nature of roles and functions, as well as government regulation.”

Zobel de Ayala added that the pandemic “has opened new possibilities that both consumers and companies may not have previously realized.”

“I believe that this shift towards digital, preference for seamless transactions and purchases, and the increased focus on health and wellness will stick even after the pandemic,” he said.

Zobel de Ayala further explained that “perhaps more important than having new tools and gadgets is institutionalizing among our employees a mindset of agility, curiosity, experimentation, flexibility and trust.”

“This [institutionalization] will have significant implications to how our companies operate and how we work,” Zobel de Ayala said in his keynote address at the recent Ayala-Financial Executives of the Philippines summit.


Like a patch

IF foreign investors are to be asked, the national government has to put in more of everything—from funds to efforts to legislations—to pave the way for business recovery.

After all, it’s the national government that decides on the kind of protocols to be enforced in specific areas of the country. Take the recommendation of the dismayed European investors.

In a survey, the European Chamber of Commerce of the Philippines (ECCP) reported nearly 75 percent of European firms in the country are disappointed with how the government is responding to the pandemic. As such, more than half of them declared they are either holding off investment plans or delaying business actions this year.

Nabil Francis, the chamber’s president, said the private sector needs more than just a stimulus now.

As listed in the survey, European firms want the government to relax business regulations, expedite infrastructure buildup and invest on health facilities. This way, they believe measures would be proactive to the pandemic developments rather than retroactive.

“Until this fear factor disappears, until we are happy to go back to the malls, happy to fly again to different regions, to visit the country, things will not recover,” Francis said in a webinar in August. “If we don’t restore consumer confidence, if we don’t restart spending, all the actions that we are taking are just like a patch.”


Essentials, erratic

MAYBE Zobel de Ayala and the ECCP chief are right.

Whoever is right, until the virus is contained and quarantine is lifted, the status quo—wherein people just go out once a week to buy their essentials or go to work on certain days—would remain.

And small enterprises, such as De la Cruz’s sari-sari store, will continue to teeter on the brink of permanent closure.

And Garcia would continue to ride her bicycle to and from work, like many workers similarly situated, who have so little means in a time of crisis, but have shown so much fortitude.


By: VG Cabuag and Elijah Felice Rosales

Image credits: AP/Aaron Favila, Nonie Reyes

Source: Business Mirror