The coronavirus pandemic will long be remembered among the greatest challenges of the modern world, not only because of its long-term impact on the global healthcare system but also because of its effects on the world’s economy.
Estimates of the virus’global impact vary: the Organisation for Economic Co-operation and Development (OECD) predicted that COVID-19 will lower global GDP growth by one-half a percentage point for 2020 (from 2.9 to 2.4%). Bloomberg Economics, meanwhile, warns that full-year GDP growth could fall to zero in a worst-case pandemic scenario.
Worst of all, COVID-19 has an outsized impact on small businesses, many of which have lost revenues to the quarantines imposed by governments worldwide. The same case exists here in the Philippines.
“Of the essential businesses that were allowed to remain open, most of them experienced very low demand, the cost of doing business was higher, their supplies were limited and the personal health risks a constant concern,” BDO Network Bank President Jesus Antonio Itchonsaid in an e-mail.
And for those businesses that were declared non-essential and were not allowed to operate, BDO Network Bank Senior Vice-President and Head of Micro, Small and Medium Enterprises Karen Cua added that the only choice was to shut down their businesses.
“There is now a lot of uncertainty regarding future sales in the new norm, and a recurrence of the lockdown could be possible due to a second wave of infections. Being unable to operate, or else seeing dramatically reduced sales, businesses are now struggling to meet their payment obligations like rent and loans,” Ms. Cua said.
This is why BDO Network Bank has doubled its efforts to meet the needs of Filipino communities. As the country’s biggest rural bank, BDO Network Bank operates more than 220 branches and over 230 automated teller machines across the country. Throughout the pandemic, the bank has kept all of its branches and offices open even during the most challenging periods of the government-imposed community quarantine.
To help their clients during the crisis, Mr. Itchon noted that BDO Network Bank’s account officers have kept regular contact with customers to remain as an accessible avenue for support. This was possible through the support provided by the BDO Group for its employees, such as rapid testing, tele-medical consultation, shuttles, and bonus pay for frontline staff.
“We are fortunate to have been able to keep all of our branches, office and ATMs open during this challenging time. In many of communities where we are located, we are the main provider of financial services. The men and women of BDO Network Bank have endured many personal sacrifices to mitigate the risks and keep the branches and office open to serve the communities. The Bank continues to make significant investments in keeping our workplace safe for our employees and our customers,” he said.
Mr. Itchon added that the bank has been working just as hard to adapt to the environment by promoting alternative banking channels that allow customers to open accounts, avail of loans, administer payroll and other disbursements, as well as manage their accounts. The bank is also ready to make loan repayments much more affordable to ease the burden of its clients and help them recover and restart their businesses.
Bouncing back
Many businesses, Mr. Itchon pointed out, are still not allowed to operate, and are therefore forced to reassess their strategies to adapt for the uncertain future. Such efforts might need further investments into digitalization, identifying new opportunities, updated business models (as in the case of eateries transitioning to takeout and delivery), and managing their cashflow to remain liquid.
But given his experience in working with Filipino entrepreneurs, he remains confident that they will be able to bounce back.
“The communities we serve are very resilient. Many communities have undergone and survived various crises, such as earthquakes, investment scams, and violence. They have managed to adapt, survive and succeed,” Mr. Itchon said.
“Most successful businesses have found their best opportunities in the most challenging crises. Henry Sy’s own personal account described him making his best investments in the most trying periods of our country’s history. The most resilient, diligent and persistent entrepreneurs willcontinue to find new opportunities.”
Aiding in that path to recovery, BDO Network Bank remains open and ready to serve rural communities affected by COVID-19 by offering its clients continued access to financial services and loan consultations for businesses wishing to restart operations. The bank offers entrepreneurs a reworked installment scheme that can reduce their original installment by up to 65%.
“Successful communities work together well. We are all hoping for a quick recovery, but we are also prepared to see our communities through a longer and more challenging journey towards normalcy,” Mr. Itchon said.
