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77% of nanoenterprises recover from the pandemic

Update 17 of SEDPI’s Rapid Community Assessment (RCA)
July – September 2022

The number of nanoenterprises who said they already recovered from the negative effects of the pandemic as of the third quarter of 2022 grew from 50% to 77% compared to the same quarter last year. In December 2020, only 32% of nanoenterprises consider themselves as recovered.

All nanoenterprises remain optimistic to recover from the pandemic. The remaining 23% of nanoenerprises that are still struggling, estimate that they will be able to recover in the next six months.

The recovery comes as the Philippine gross domestic product grew by 7.6% this quarter. A positive sign that growth and recovery is also felt at the grassroots level amidst persistent high inflation environment.

During this period, the government’s target for initial vaccine shots have been achieved but booster shot uptake remain low. There were 33 confirmed and 204 suspected COVID cases out of the 3,898 respondents which is the highest incidence rate since SEDPI’s rapid community assessment began in 2020. However, no hospitalization cases were reported.

Demand and supply

Nanoenterprises with strong demand for their products and services doubled from 22% in the third quarter of 2021 to 49% of the same quarter this year; while those who experienced weak demand reduced from 66% to 36% respectively. Access to supplies remained about the same at 77% and 73% in the same periods.

E-commerce participation

As mobility improved due to the opening of face to face classes in public and private schools, e-commerce participation continue to decline. There were slightly fewer nanoenterprises selling online this quarter at 19% compared to the same quarter last year at 22%. The peak of online selling among nanoenterprises was in June 2021 at 41%.

Those who buy their supplies online declined from 18% to 13% in the third quarter of 2021 and 2022 respectively. The peak of buying supplies online among nanoenterprises was also recorded in June 2021 at 31%.

Digital profile

Mobile phone and computer ownership remained steady at 79% and 7% respectively when compared to the previous year at 77% and 8% respectively. Interestingly, basic phone ownership increased from 19% last year to 30% this year. Conversely, Android phone ownership decreased from 68% to 52% in the same period.

One could speculate from this that, perhaps nanoenterprises bought lower end Android phones that easily broke last year. As a result, they went back to basic phone which is more sturdy. In which case, there remains an issue of affordability to this vast segment of enterprises.

Internet access dropped from a peak of 61% in 2021 to 39% this year. Perhaps the resumption of face-to-face classes in private and public schools reduced the need for internet access since online learning is no longer needed.

Nanoenterprises who have social media accounts also dropped from 59% to 40% in the same periods. This is in line with the drop in internet access and return to basic phone use. They may no longer be using their social media accounts and deem these as closed due to lack of smart phone and internet connection.

Profile of respondents

Most of the respondents are female (88%), married (66%), and operate their own business or earn wages (84%). Their average age is 42 and are from the provinces of Agusan del Sur, Davao de Oro, Davao del Norte and Surigao del Sur.

Nanoenterprises are smaller than microenterprises. These are unregistered livelihoods of self-employed individuals that have capitalization of less than PhP50,000. SEDPI estimates that the vast majority of the entrepreneurial poor in the Philippines are nanoenterprises, at around 8 million.


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