A collapse of MSMEs, which account for a third of the economy, could set off a snowball effect. Not only would it slash jobs and household spending, it risks sapping demand for suppliers, landlords and lenders. As the financial ordeal ripples through to more businesses, more jobs get threatened. A downward economic spiral ensues.
MSMEs get creative
But Catimbang resists the idea of handing pink slips. Saying employees are his biggest asset, he’s determined to sustain salary payments.
“When things bounce back, we’re going to need everyone, so it’s important that my employees know I share in the pain,” he said.
Another company that was forced to scale back is Mercato Centrale, which runs food markets—huge open tents filled with third-party food stalls—in three locations around the metro. It also acts as an “incubator,” training micro and small food vendors in operations, finance and marketing so they can professionalise their business.
It’s a tough time having to pay rent without sales, but owner RJ Ledesma looks at the crisis as a chance to innovate. Ledesma said Mercato Centrale just launched online ordering on Facebook, providing logistics services to its roster of food vendors. He said he intends to convert this into a cloud kitchen once quarantine measures are lifted. A cloud kitchen provides space for vendors to cook meals, along with delivery services.
Catimbang’s first response to the unfolding crisis was focussed on making concessions. He pleaded with his landlord and spa and restaurant suppliers to postpone collections, essentially halving what Tribu Babaylan was supposed to shell out on a normal month.
Then came the more crucial question: How can the business continue to earn?
Initially barred from operating when the quarantine was declared, restaurants were allowed to reopen on the condition that they’d be restricted to takeaway and delivery. Catimbang saw an opening.
“We’ve never done a single delivery, but I told my team let’s go for it – just so we don’t experience zero sales,” he said.
He reached out to firms that were still operational, and in under 24 hours, heard from local pharmaceutical company Unilab. Unilab sponsors meals for doctors, nurses and other medical personnel on the coronavirus front lines. On the first day of the enhanced quarantine, Catimbang kicked off deliveries for Unilab recipients in top Manila hospitals. To his surprise, orders grew from 10 meals to 300 by the end of the day to 500 the next day. “I was glad I took the chance.”
While the delivery service accounts for only a small share of the overall business, the hope is that it will generate enough income to help support the staff, who’ve been worried about their jobs, said Catimbang.
But the task is neither easy nor 100% safe. He, his wife, three of their closest friends and five employees—all staying at Tribu Babaylan—split the tasks of cooking, packing and delivering meals using their personal cars and motorcycles.
“There’s that fear that you might get exposed to the virus. I have three kids, all of them still young,” he said.
But his biggest motivator is to keep his people employed and support those battling the pandemic. The team does ensure that they take the necessary precautions like wearing protective gear and limiting deliveries to a hospital’s reception area.