The COVID-19 pandemic has changed our way of living in fundamental ways. We are encouraged to stay at home and social-distance, forcing many to shift from on site work to remote work. This has altered the economic landscape globally in significant ways.
Many businesses simply cannot operate without brick and mortar stores, forcing them to close down many of these stores or even go bankrupt. This massive decline of many businesses leads to record high unemployment rates all over the world.
The Social Weather Stations’ (SWS) National Mobile Phone Survey found 45.5% of the adult labor force in the Philippines are jobless. Moreover, in June, Labor Secretary Silvestre Bello III said that the pandemic has affected the jobs of about 343,000 OFW workers and estimated that the number may rise to 1 million. The poor state of the economy also reduces consumer spending, making it even more difficult for businesses to survive.
In general, any companies that depend on the physical presence of customers and staff, and companies that offer products and services that are no longer in demand are struggling.
Retail stores such as malls, department stores, specialty stores, and others had their income reduced significantly due to people not willing to leave their homes or to spend on non-essentials. Many jobs in these stores have been and will be lost due to smaller profit margins or bankruptcy. Aside from supermarkets, the stores that are more likely to succeed are those that can utilize e-commerce and establish a robust online presence.
The service sector is affected similarly to retail. Any service that requires close contact with the customer is not an option. Even services that can successfully implement social distancing will still receive less traffic. People are more hesitant to spend on anything non-essential. Health care services may be exempt from these, but with increased risk to the health of most workers here. Services that can be delivered through an online medium are more appealing to customers.
The travel sector was one of the hardest hit. Flight is banned in many places, but even if it wasn’t, The cost of travel and risk of acquiring and spreading an infection deters most customers. Cruises receive the same treatment as airlines. Hotels and results are luxuries that most cannot afford in this time of economic disparity, even if customers were not so fearful of infection. Jobs in these sectors are rapidly decreasing.
Similarly to other sectors, spending on non-essentials has plummeted; and any form of entertainment that requires people in the same physical space, like sports events, music concerts, theatre, stand-up comedy and others must implement social distancing, limiting the amount of customers that can be accommodated at a time and lowering income. Art exhibits and museums are generally affected the same way, all though some find ways to give customers a similar experience through online mediums.
By comparison, digital forms of entertainment are thriving, with the exception of music, which is experiencing a decline in both live music and streamed music. Time spent playing video games is at a peak globally, good news for developers. While streaming movies has become more prevalent during the pandemic, all major streaming services are based outside of the Philippines, and it is very unlikely for any streaming start up to be able to compete with these services. Journalism should remain mostly unchanged. People have been spending more time on social media, partly for entertainment purposes.
People are relying more and more on technology in every part of their lives. Technology companies are in a good position to meet the various needs of people and companies through digital means. While some companies that rely on selling hardware may experience difficulty in selling products, software is very easily distributed and software developers can usually work remotely quite easily. Technological expertise will only become more valuable as the world becomes more digitized.
Consumer spending is down and demand for apartments and homes are low. Among the people who may still want to purchase real estate for personal use are more hesitant to enter a potential purchase to evaluate it, and those looking to sell are more hesitant to allow others to enter, both fearing infection.
Mining operations were forced to be halted when the pandemic started, though even as operations resume normality demand for base metals and other mining related resources has plummeted. Oil prices have lowered with demand. Renewable energy is generally unchanged.
Story by Samuel Cheng and Ethan Chiuten
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