SMALL-BUSINESS access to credit in the Philippines remains irregular during the pandemic, according to a survey conducted by CPA Australia.
The survey, which took in input from 300 small businesses, CPA Australia found that 64% of respondents sought external financing last year to either grow their businesses or survive the pandemic.
The study took in the responses of 4,227 small firms in 11 markets across the Asia-Pacific last year, including the Philippines, Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Singapore, Taiwan, and Vietnam.
Only 13% of Filipino respondents said accessing external funding was easy or extremely easy — the lowest rate in the entire survey. CPA Australia said 21% opted to tap their family and friends rather than go to banks for loans. Only 15% chose formal financing.
It said only 16% of Filipino respondents expect to have easy access to external financing this year. The survey average was 28%.
“Difficulties in accessing external finance may hinder business plans to hire more employees, invest in technology or expand to new markets. Small businesses in the Philippines should consider seeking professional advice to maximize their success in obtaining external finance,” Mark Chau, regional general manager of business development international at CPA Australia said in a statement.
However, Mr. Chau said the study also revealed that small firms in the Philippines are willing to innovate and connect with their customers through social media.
He said the young workforce and growing demand supported small Filipino companies last year.
Around 62% of respondents in the Philippines said their businesses grew last year, higher than the regional average of 46%.
The online boost that these companies experienced was mostly higher than average, with 56% of small businesses in the Philippines saying their operations were more profitable after investing in technology. The regional average was 48%.
Around 62% earned 10% of their total income from online sales, above the 58% average, while 61% of small companies in the Philippines generated 10% of their sales through online payments, against the survey’s 64% average.
This year, 73% of respondents in the Philippines are expecting growth, 52% are likely to grow their headcount, 31% will launch new products and services, while 22% are projecting more revenue from overseas clients.
“Pending the effectiveness of the rollout of COVID-19 vaccinations and the control of COVID-19 cases, the dynamism of Filipino small businesses should help drive an economic rebound this year as restrictions are gradually eased and global economic activity returns to normal,” Mr. Chau said. — Beatrice M. Laforga