carlo s. lorenciana / Reporter
RETAILERS are cutting down on operational expenses as they try to offset the lower sales brought by the virus scare which have rattled markets across the globe.
Business groups in Cebu have called on their member firms to ensure their operations stay afloat despite the crisis.
Robert Go, spokesperson of the Philippine Retailers Association in Cebu, said the industry is now suffering dismal sales, as spending from international tourists plunges amid the government-imposed travel restrictions on China and South Korea, Cebu’s two biggest tourist markets.
“Retailers are asking lower rents in malls and might ask workers to go on leave voluntarily,” Go told SunStar Cebu Friday, Feb. 28, 2020.
He said local retailers are banking on the nationwide month-long shopping sale in March, a move that could reinvigorate the retail sector.
“Retailers are stretching their resources trying to cut operational expenses and hopeful to dispose of merchandise to be able to pay suppliers while cutting down on new buys,” he said.
Low sales are observed particularly in fashion, personal care, home products and non-essential products.
Steven Yu, president of the Mandaue Chamber of Commerce and Industry, said their member companies have been urged “to map out a detailed plan on how to sustain its business operations.”
“The impact will vary per industry. Belt-tightening measures are badly needed for the tourism sector for example. But for as long as the business can sustain it, it should keep its people for humanitarian reasons, and for the business to be ready once the virus has significantly died down and a V-shape recovery sets in,” the business leader told SunStar Cebu.
“We encourage the business community to stay productive and to be innovative like promoting domestic tourism, or holding mall sales, among others,” he said.
Constricting economic activity “might do more harm than good,” Yu said.
“This is a time for belt-tightening and many retailers are just hoping for break-even not even thinking of earnings,” said Go, adding that retailers are just hoping sales won’t dip further.
In a position paper, the Cebu Chamber of Commerce and Industry (CCCI) on Thursday, Feb. 27, 2020, called for the management sector to continue operating even at break-even levels or subsidize operations to keep the business going amid the Covid-19 outbreak.
CCCI also appealed to exhaust all avenues to keep workers in the payroll, instead of resorting to layoffs; e.g. availment of leave credits, allow leave without pay, shorter work week. The chamber also encouraged business owners to voluntarily slice profits or dividends for the sake of survival. It also called the management to implement strategies and implement precautionary measures to protect their workforce while ensuring continuity of operations.
Utilities
CCCI also asked utility companies to suspend some charges or at least reduce rates and provide a leeway or moratorium on late payment penalties or notice of disconnection.
While it commends CCCI for coming up with ways to help businesses and consumers deal with the impact of Covid-19, the Visayan Electric Company, in a statement, said electric utilities are a highly regulated industry.
But the company assured its customers that it will continue to manage its energy purchases so that it can procure electricity at the least cost possible from its suppliers and the Wholesale Electricity Spot Market.
On the call to provide moratorium on late payment penalties or notice of disconnection, the Visayan Electric already gives its customers two months before it issues a notice of disconnection. Also, its notices of disconnection take effect 48 hours after receipt. These timelines already give its customers a reasonable amount of time to settle their electric bills.
“We encourage our customers to manage and control their electricity consumption so they can prevent or lessen whatever impact Covid-19 may have in their day to day activities,” the company said.
Exports up
While the tourism and retail sectors suffer the biggest blow, exporters in Cebu are seeing positive signs.
Allan Suarez, chairman at the Philippine Exporters Confederation in Cebu, said export sales have even spiked amid the Covid-19 outbreak.
But he said that manufacturers at the Mactan Economic Zone are also facing problems in sourcing their raw materials.
“In Cebu, thus far, we are not affected by the Covid-19 situation. We even witnessed a spike upwards of our sales to foreign buyers,” Suarez said.