Micro, small, and medium enterprises (MSMEs) should be financially literate and ready to go digital to adapt to the changing business environment due to the pandemic.

“It is not enough for our MSMEs to narrowly survive the pandemic. What will command success is the digital and financial agility to stay resilient and ultimately thrive,” Clare Cattleya G. Amador, head of public policy at Facebook Philippines, said at the virtual Financial Education Expo held by the central bank on Thursday.

MSMEs are important to the economy as they make up about 98% of all businesses in the country, based on data from the Department of Trade and Industry. These small businesses were among the worst hit during the crisis.

Ms. Amador said the rise in online transactions means small businesses have to deal with challenges that come with using digital platforms.

“As the number of online business and transactions rapidly increase, so do the challenges concerning responsible online platform fees as well as consumer and seller protection,” she said.

A study by Cisco Systems, Inc. released in October found that 57% of small- and medium-sized businesses in the Philippines that went digital experienced a cyberattack in the past year.

George Omer Denis S. Quitoriano, a professor at the Ateneo de Manila University, said owners of small businesses should delineate their personal and business goals for better financial management.

“There should be different treatment for the two because the business goals have a bigger aspect,” he said, noting that some small business owners have the tendency to keep their personal and business funds together.

Mr. Quitoriano added that MSMEs should ensure they are responsibly managing their debt, as this should be used for business expansion and not for personal matters.

“It is dangerous if we keep on getting credit and we just spend it. The scary thing is when we are already getting credit to pay for another credit,” he said.

To help prop up the MSME sector during the coronavirus pandemic, the central bank last year allowed banks to count MSME loans as alternative reserve compliance. Loans extended to the sector likewise were also given reduced credit risk weight. — L.W.T. Noble