How the pandemic is affecting small businesses in the Philippines

September 2, 2020

The following is a transcript of an interview with Kiva Coordinator Horton Caguingin, who is currently based in the Philippines and is working with our Field Partner Alalay sa Kaunlaran, Inc (ASKI). Established in 1986, ASKI is a non-profit dedicated to promoting and developing “micro and small-to-medium enterprises and the delivery of social services.” Some of the responses have been edited for clarity and brevity. 

Tell us a little bit about yourself and how you ended up in your current role as a Kiva Coordinator within ASKI. 

I am a provincial scholar that graduated a couple of years ago with an accounting degree. Before I started working full-time, I worked as an intern in the ASKI accounting department. That same year (2016), I was absorbed into the company as an employee and was designated as an accounting assistant. In 2017, I was promoted and transferred to the ASKI main office in Cabanatuan City. I became a Resource Mobilization Officer and took over ASKI’s Kiva account. 


Small businesses are struggling.

What does your role within ASKI involve? 

I focus on how Kiva works in conjunction with ASKI. I’m essentially the leader of Kiva’s ASKI team and oversee three officers in designated regions. We upload client stories on the website, and I review them before they are sent out. I also facilitate the repayment report that is submitted to Kiva monthly.

How has your work and the work of ASKI been impacted by COVID-19? How are your clients doing?

Before the pandemic, ASKI was doing very well. Obviously, COVID has had a big impact on the industry as a whole. In March 2020, the president of the Philippines issued an executive order for enhanced community quarantine until May 21st. This lockdown affected many of the cities and municipalities, including ASKI’s areas of operation. Many establishments, government offices, and institutions were temporarily closed. Public transportation was not allowed to operate, and people were restricted from going outdoors. 
In addition, the Philippine Congress passed the Republic Act 11469 – also known as “Bayanihan [refers to the spirit of communal unity, work, and cooperation to achieve a particular goal] to Heal As One Act” – in March. It was effective for three months and extended until June, giving the President emergency powers to address the COVID-19 crisis. This act allowed the government to set up a social amelioration program to provide emergency subsidies ranging from 5,000 pesos - 8,000 pesos to low-income households.

There was also a moratorium on loans covered by the act that lasted 90 days. This moratorium definitely affected our operations due to the extensions on client payments without penalty or interest. Of course this was very helpful to the vulnerable clients since their businesses were temporarily shut down, but it was also hard on microfinance institutions.


Horton at work in the Philippines.

ASKI employees currently have reduced working schedules; we’ve gone from working 5 days a week to working 3 days a week. Many of us have to support ourselves and our families with an additional source of income. I have actually been supporting local tailors by selling tailored clothing in my free time.
In September 2020, the Philippines passed another law the “Bayanihan to Recover as One Act” granting another loan moratorium without imposing penalties and charges for 60 days. This situation again impacted our operations, but we regularly monitor clients and accept their payments. The law also enabled us to provide more support in the health, education, agriculture and other small business sectors. 

How has the country been impacted by COVID-19 as a whole?

At the moment, most cities and regions are under a flexible quarantine that allows businesses to stay open at 50% capacity. Mass transportation is also open at 50% capacity. It is very strict here in terms of safety precautions. It is mandatory for people to wear face masks and face shields. They also take your temperature at the entrance of malls and certain establishments. Until this moment, cases were rising. I think the government budget allowed for more quarantine facilities and proper treatment, so that has had a positive effect. In terms of employment, many Filipinos lost their jobs and were given subsidies, but still needed to look for other income-generating activities. This subsidy is not enough to survive on. In addition, there is an economic downturn occurring, which is why many overseas Filipino workers (OFWs) are returning. As of October 2020, around 250,000 OFWs were repatriated. 

Is there anything that gives you hope during this difficult time? 

We have new partners from the government and private sectors who have provided us with rehabilitation loan funds allotted to clients affected by the pandemic. I think that will definitely help us recover.

Aside from financial support, ASKI also helps clients to market their products online. Online business has been a trend in the Philippines since quarantine started and the Philippines’ Travel and Tourism sector was severely affected. Education has also been affected in the Philippines. The government is promoting online classes, but it’s tough for less fortunate families to afford the gadgets and internet required to use them. Families use their money to buy necessities, like food for their families, instead. With the help of ASKI Microfinance, which also offers gadget loans aside from business, agricultural and consumer loans, I think we can help clients’ children with their schooling. In general, management is looking to discover digital solutions for loan disbursement and collection in response to the pandemic. 
The good thing about ASKI's management is that, although they did reduce working schedules, they did not retrench employees. At the beginning of the lockdown, ASKI gave salary advances to help employees with their essential needs.  I’m so grateful to ASKI for the love and care it has shown to employees and clients during this crisis. I’m also thankful to Kiva for the understanding and support during this time of the pandemic, and salute our hardworking front-liners: the doctors, nurses, employees for their dedication and bravery to face and fight this pandemic.


March 2021 update from Horton: 
Regarding the current situation here in the Philippines, the government has been focused on the country’s healthcare system since we have cases of the second variant of Covid-19. They have still been strict when it comes to health protocols and safety measures, since the cases of COVID-19 were continually rising. The implementation of lockdowns was applied to those cities and regions that have higher cases of COVID-19 to avoid spreading the virus. We’re grateful that vaccines arrived at the start of this month. Although the government is currently prioritizing health workers, I hope that everyone will be vaccinated soon. 


To learn more about ASKI, click here. To support borrowers and Field Partners in the Philippines, click here.

About the author

Anna Gravois

Anna Gravois was born and raised in small town Louisiana, surrounded by a mixture of Belarusian and Cajun-French influences. As a result, she has always been curious about the intersection of culture, language, and identity, and how these factors come to shape individual experiences.  This curiosity quickly evolved into an interest in communication between different cultures, which formed the basis of her studies (along with the French language) at Santa Clara University. This is where she first became interested in discovering a way to facilitate local and global connections within the scope of nonprofit work in order to work towards a more equitable world. She is excited to join Kiva as an intern, learn more about the nonprofit sector, and connect with the 430+ international volunteers that are a vital part of the Review and Translation Program.