We call ourselves the Wakanda of the Philippines for being self-sustaining amidst all the challenges brought about by COVID-19. This is not far from truth and we laud the Ilonggo spirit of dagyaw working in all the efforts poured by different sectors of our community – from the local government, businesses, down to civic-minded individuals. We Ilonggos believe that when we fight together, we will win this battle against the deadly virus stronger.

While we set the bar high in addressing the impact of COVID-19 in terms of medical and social response, our businesses need to start planning for a post-crisis recovery plan now to achieve the same result. Sure, we are a resilient breed but we also need to acknowledge that the impact of this current crisis may be long and deep that if we do not start planning for a bounce-back, we may suffer a little bit harder, a little bit longer.

Sure, we enjoyed years of growth and prosperity, yes. Our economy has significantly grown as shown by business expansion in the past four to five years. In 2015 alone, Western Visayas grew by 9.4%, among the highest in the Philippines. In 2018, the regional GDP has grown by about 6.1% which was almost equal to the national economic growth.

The mushrooming of malls and retail outlets in the city and province of Iloilo may be a good indicator of prosperity. Local shoppers carried bigger baskets, bought more clothes and vanity items, hauled more appliances and furniture, dined in the restaurants in bigger groups, bought more cars, and spent a lot more. Hotels and resorts enjoyed healthy occupancy coming from both local, regional, and international guests. Dollars earned by OFW Ilonggos, supported by income from local employment and industries, has buoyed our economy very well. Condominium units and subdivision lots sold out fast and office spaces were easily filled by the burgeoning BPO industry. We were a happy, mostly middle class society, enjoying the comfort and convenience afforded by a highly urbanized city. We had the good old days – just a few weeks ago.

Life was good until everything was put to stop because of the COVID-19 pandemic. Most of us were unprepared, much like the rest of the world.

With the community quarantine in place, malls are padlocked, most offices are closed and only those who run the essential business are allowed to run. Most micro, small, and medium enterprises are forced to stop their operations. With this situation, we ask: what is in store for our local businesses?

Business Unusual

As most pundits predict, the impact of COVID-19 crisis to businesses may extend even after the community quarantine has been lifted. Businesses may crawl from its effects three to six months into the new normal.

The new normal will no longer be business as usual, maybe more of business unusual if we put it bluntly. In the new normal, we may have to let go of those we have been comfortable with and we will be forced to quickly adapt the changes we often dismissed or procrastinated about in the pre-COVID-19 age.

According a report called Addressing the Social and Economic Impact of the COVID-19 Pandemic released by the National Economic Development Authority (NEDA), household consumption of non-essential commodities may see a decline of 5-10%. These non-essential commodities include alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment and routine household maintenance, recreation, culture, restaurants and hotels, and miscellaneous goods and services.

In the same report, the government’s economic authority projects significant hit to the tourism sector due to travel restrictions. On a national level, the sector is projected to lose an equivalent of about 0.4 to 0.8 percent of the 2020 GDP. Due to the slump in economic activities, the industry may let go of about 33,800 to 56,600 employees. We may infer that this national concern may also be felt in a way in Iloilo given the role of tourism in our local economy.

This current state may also impact other industries such as agriculture, manufacturing, and logistics and supply chain, among others.

Once the quarantine is lifted, it will take time for us to come out and do our leisurely shopping. If we indeed go out, we will only shop for essential goods. Our spending will be limited to the very basic things that will give semblance of normalcy. In fact, we may even spend lesser time outside to avoid crowded places for fear of getting infected.

Because of the global nature of this crisis, inflow of money from OFW remittances may be limited. These overseas workers and their families will choose to reserve cash on more important spending such as food, health, and school.

Planning for the new normal

So what can our local businesses do to plan for the new normal?

We need to start this conversation soon so we can cushion the potential impact to our local industries. As I said, the new normal will no longer be business as usual so we have to gear-up and adapt as fast as possible.

Local businesses need to quickly shift to digitization. This means beyond just having a Facebook page and posting on the platform every now and then, or worse not even managing it properly. Digitization means transitioning to genuinely use digital technology – from internal processes, marketing and selling, and even order-taking and delivery – to manage and run the business. Notice that during the lockdown, those that continue to survive and thrive are those who are ahead in the digital platform. Digital transformation and actual adaptation will be the mode of the new business normal after COVID-19.

Ilonggo business players are encouraged to expand their value proposition from just having a basic product or having the cheapest offer. Barato will not be enough a motivator for the customers anymore. Customers in the new normal will demand for more value because money will not be as easy to earn. They will stretch actual benefit from every peso that they let go. Ilonggo customers will demand for better customer support and more value-added services.

For sure, Ilonggo businesses will need to manage cost, moving forward. Extra care must be taken when doing this so as not to compromise quality. Customers will always sense this and the danger is that they can shift their loyalty to another brand as easily as they can. National players with deeper pockets may start to come in (if they haven’t yet!) and they may eat up significant market share!

At the end of the day, for us to survive not just the medical and social impact of COVID-19, we also need to begin thinking about our economy. Local business players, the local government, as well as the whole Ilonggo community need to work together to reduce the painful impact of the crash that the COVID-19 crisis can bring. We need to start talking about the plan. We need to begin drawing and calibrating our bounce-back roadmap as soon as we can.