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1 out of 4 nanoenterprises adopted online selling in response to lockdowns

Summary of findings:

  • Out of 7,675 SEDPI nanoenterprise respondents 26% sold products and 29% bought supplies online to augment their livelihood operations
  • 100% are resumed livelihood operations a year after the hard lockdown
  • 52% added other kinds of livelihoods in response to the pandemic
  • 89% said that those with farms were able to adjust and fair better
  • 40% fully recovered from the negative impact of the pandemic
  • 55% said it will take them up to 2 months more before they get back to their pre-pandemic levels

At least one out of four nanoenerprises are now either selling their products online, or are buying products to be sold in their local communities to cope with granular lockdowns imposed by local government units. Out of 7,675 respondents, 26% sold products and 29% bought supplies online, to augment their livelihood operations.

Nanoenterprise is a SEDPI-coined term that refers to unregistered livelihoods of self-employed individuals that have capitalization of less than PhP50,000 to operate. SEDPI estimates that the vast majority of entrepreneurial poor in the Philippines are nanoenterprises, numbering around 8 million.

Nano level risk diversification

More than half of the respondents or 52% also claimed that they added other kinds of livelihoods in response to the pandemic. Nanoenterprises refer to this as “diskarte” to be able to survive the negative economic impact of the pandemic. Diskarte is the ability to use creativity and resourcefulness to respond to challenges and adversities.

Nanoenterprises involved in the agricultural sector were better able to weather the pandemic compared to their non-agri counterparts. Eighty nine percent of the respondents said that those with farms were able to adjust and fair better.

Farming households were able to harvest produce for consumption. The surplus farm produce were then sold in local markets through ambulant vending and online selling. This resulted in reduced expenses for food and at the same time provided ample additional income

Status of nanoenterprises

A year after the Enhanced Community Quarantine (ECQ) imposed in the whole country, all

nanoenterprises reported that they already resumed operations. At the peak of the ECQ last year, 69% of them stopped operations which prompted the government to distribute cash assistance.

As of March 2021, four out of ten respondents said that they have fully recovered from the negative economic impact of the pandemic; while 55% said that it will take them up to 2 months more, before they get back to their pre-pandemic levels.

During the first quarter of the year most areas in the country were under Modified General Community Quarantine (MGCQ), the lowest quarantine level imposed by the Philippine government. These reinvigorated the local economy due to ease in the flow of goods and mobility of customers.


Social Enterprise Development Partnerships, Inc. (SEDPI)

SEDPI provides capital to nanoenterprises through joint ventures to approximately 10,000 low-income households in Agusan del Sur, Davao de Oro and Surigao del Sur. Its members also benefit from life insurance as well as medical and disaster relief assistance through damayan. SEDPI also partnered with SSS and Pag-IBIG to bring social safety net programs of the government closer to nanoenterprises in rural areas.

This research is part of a series of rapid community assessments that determines the economic impact of COVID-19 to nanoenterprises. SEDPI began the research last March 2020. This latest update was conducted on April 2021 to cover the first quarter of 2021.

The 7,695 respondents is not a representative sample of the entire Philippines. It is highly localized to SEDPI members. However, this is a good case study that reflects the situation of nanoenterprise and the local economy in the countryside. SEDPI believes that the nationwide picture is not far from its research results.

Marylie “Inday” Supanghari, 39, Trento Agusan del Sur.

            Inday owns a sari-sari and an internet café in Santa Josefa, Surigao del Sur. Due to lockdowns to prevent the spread of COVID-19, she estimates that clients from both businesses fell by 50% and 70% respectively.

She turned to her farm to make up for losses. Her family plants lemon and rice which they sell within their neighborhood. She also shared, “I adjusted the way I do business. I tried to sell rice cakes using our harvest and lemon through Facebook. When this picked up, I added clothes in the items that I sell online.” Her lemon reaches as far as markets in Manila and Cebu due to her presence online.

Inday is one of every four nanoenterprise who was able to adopt online selling to cope with the pandemic. She now accepts orders, delivers goods, and then receives payment through using various online platforms.

When asked what the government could do to assist her business she said, “I pay PhP11,000 a year for business permit. It would be nice if our mayor would waive or reduce this. We would also appreciate if the government could provide us training on online selling so we could do better. They could also provide loan to us at 0% interest rate.”

Armin Quiñonez, Trento, Agusan del Sur

Armin sells rice in her neighborhood. When lockdowns were imposed, she had difficulty selling her products. That’s when she discovered online selling and buying.

“I’m not really well-versed in online business. I just sell things I buy online to my neighbors and within our barangay. I initially tried to buy clothes such as shirts and pants, and sold them around my neighborhood.” Armin’s business picked up and also tried selling rice online. “I used to only buy three sacks of rice, but now I purchase seven or eight. I offer my customers half-sack of rice and then they pay me on an installment basis daily.”

Janice Marangan, 32, Hinatuan, Surigao del Sur[i]

Janice lives in the Hinatuan municipality of Surigao del Sur with her husband, three kids, and sister-in-law. Alongside her husband, who works as a carpenter, she makes a living from her kakanin business to support her family. Catering to her neighbors and nearby communities, she offers a wide variety of kakanin including pichi-pichi, puto, and her famous cassava cake. Although she enlists the help of her eldest daughter and kids to deliver orders to neighbors, Janice operates as a one-woman show majority of the time. She usually takes trips to the market to purchase ingredients, cooks all the kakanin, and travels to farther locations to sell her goods all by herself.

Prior to the pandemic, Janice would often buy ingredients in bulk to get the best possible prices. Her average daily sales then would reach P500. However, this all changed beginning March of last year when the country started to record a growth in the number of cases of those infected with the virus. Janice could no longer afford to purchase in bulk as demand for her kakanin started to go down. She could no longer enjoy the lower prices for the raw materials. To make matters worse, her average daily sales took a dive from P500 to P350 and she now needs to spend longer hours selling as well as travel farther distances just to be able to sell her products. Furthermore, movement restrictions imposed by the local government exacerbated the already difficult situation she was experiencing. Times are tough for her husband as well, as he is often out of a job due to the halting of many construction projects.

Luckily enough, the family’s joint earnings are sufficient to cover their monthly household expenses. Janice broke them down into specific categories: “We usually spend P3,000 on food (rice and viands), P300 on electricity, P200 on water, and P1,000 for my kids’ needs for their schooling.” Although able to get by, it was shocking to hear that her family has not been provided with any form of government assistance. However, with the capital SEDPI provides Janice and her family, they continue to move forward and make the most out of their livelihood.

Lilia Peñora, Trento, Agusan del Sur[i]

Lilia Peñora from Agusan del Sur is one of many business owners who were heavily hit by the pandemic. Lilia owns a sari-sari store and a “carinderia” that caters to students looking for a hearty meal from and on their way to school. Before the pandemic, her two livelihoods earned P5,000 a week which was more than enough to cover the daily needs of Peñora’s family. Alongside these, is her husband’s daily income who works as a tricycle driver.

She had to close down her cafeteria due to imposed lockdown restrictions. Since students are no longer able to attend face-to-face classes, the business lost its customers. She is also unable to restock her sari-sari store due to the lack of steady earnings from her sources of income. Furthermore, her husband is not able to make ends meet due to imposed travel restrictions that hamper public transportation like tricycles.

To compensate for the losses, Lilia has turned to farming vegetables and raising pigs to be sold or eaten. Her vegetable garden consists of squash, green beans, eggplant, and calamansi. She states, “sa awa ng diyos nakakaraos kami kahit papaano dahil sa mga inaani naming.” She adds that they try to find aid through loans to make ends meet.

One of the microfinance institutions Lilia gets funds from is SEDPI, but instead of loans, she enters into a joint venture. This differs from other microfinance institutions that extend interest-bearing loans that continue to accrue and often laden penalties for delayed payments. SEDPI uses service charge to allay this financial burden to low income households.

Lilia says that the capital largely aided her family in getting through the pandemic. She breaks down the costs covered by a loan of P6,000. About P4,000 go to household needs which go to food and water. While the remaining P2,000 go to pig feed and farming needs. With the help of SEDPI, Lilia remains resolute and hopeful in these turbulent times.

Angelita Petin, 30, Lingig, Surigao del Sur[ii]

Angelita operates a sari-sari store that she was forced to close down during the first national lockdown in March last year. The business saw a much weaker demand after quarantine restrictions eased in much of Mindanao by June. Since reopening, Angelita’s sari-sari store has managed to stay afloat—albeit barely.

Okay naman kami, pero hindi pa po kami nakakabawi kagaya nang dati.” (We’re doing okay, but we haven’t recovered to how we were before.) She said, “Kahit kaunti lang [kita namin] (Php 1,000 per week), at least mayroon pa. Wala rin naman kasing [nakakaahon] kagaya ng dati.” (We only earn very little, but at least there’s something. Besides, no one’s really fully recovered yet.)

The crippling of her livelihood adversely affected Angelita’s household income. She recounted how difficult the beginning of the pandemic was for her and her family, when strict quarantine measures left them without a source of income: “[Noong] Nag-umpisa ng March, sobrang hirap talaga,” she recounted, “Hindi kasi kami makalabas para makapagkita. Kinailangan namin magtipid [at] naghingi kami sa aming mga kamag-anak.” (When it began in March, it was so hard. We couldn’t leave the house to earn money. We had to lessen our expenses and ask our relatives for money.)

Angelita and her electrician husband, Mark Anthony, struggled to support their three young children who are all still in grade school. They were desperate to meet their average weekly expenses of Php 3,000 on food, water, electricity, and basic amenities; “Naghanap kami ng extra income,” said Angelita, “Kahit anong trabaho, gagawin namin.” (We looked for any source of extra income—we would take any job.)

SEDPI extends joint venture capital to women in rural areas such as Angelita. Instead of a creditor-debtor relationship in most microfinance institutions; SEDPI chose to partner with nanoentrepreneurs to share in the profit  and absorb most of the losses, if unsuccessful. This frees them from the debt cycle that spirals them deeper into poverty.

“Mabuti naman nakasali kami ng SEDPI kasi may pinagmumulan kami ng pera,” she said. (It’s a good thing that we’re part of SEDPI because now we have a source of capital.) She initially accessed Php 6,000 for capital to put up her store, then later accessed another Php 9,000 to invest in inventory. She typically invests Php 5,000.00-7,000.00 to replenish her weekly inventory.

“Nakakatulong para makadagdag sa aming puhunan,” Angelita said, “Maliit po ‘yung service charge.” ([SEDPI] helps increase the amount we can invest in our business. The service charge is low.) SEDPI has also supported some of her neighbors in starting businesses and has been compassionately lenient with their collection policies during the pandemic.

SEDPI’s Branch Manager at Bislig, Joe Zaldivida, says that their organization strives to help their members by facilitating access to financial services. “Magkakaroon sila ng pandagdag puhunan sa kanilang hanapbuhay, at puwede makapag-save at makakakuha sila ng insurance.” he says. (Their investment in their livelihoods is increased, so they can save money and get insured.) He hopes that SEDPI will be able to further assist their members in securing insurance benefits: “Makakatulong din ang SEDPI sa kanila na magkaroon ng maayos at sapat na life and health insurance at maging bahagi ng SSS at Pag-ibig program.” (SEDPI helps them have good and sufficient life and health insurance and helps them become beneficiaries of the SSS and Pag-ibig program.)

Mr. Zaldivida is spurred by his goal to strengthen the nanoenterprises’ profitability so that they are no longer reliant on loans. “Gusto ko kasi mag-improve ang kanilang hanapbuhay hanggang sa dumating ang araw na ‘di na sila aasa sa loan,” he said, “Nang sa ganon naka-focus na lang sila sa pag-save at magpa-insured.” (I want them to improve their livelihoods so that one day, they will no longer be dependent on loans. Then, they can focus on saving money and getting insured.)

[i] Interview conducted by Famarin, Jerika; Francisco, Yanni; and Ramos Joan.

[ii] Interview conducted by Bicomong, Celestine; Bongolan, Luis; and Elicaño, Carlos.

[i] Interview conducted by Abella, Henry Elijah; Oblenida, Armand Eduard; and San Miguel, Jaime Luis.                     

Previous rapid community assessment updates. The titles are hyperlinked. Click on the titles to full read article online.


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