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Yesterday, I was asked for my thoughts on how entrepreneurs can survive this crisis. Here’s an excerpt from my interview with Cito Beltran of One News.
The questions and transcript have been edited for clarity and brevity.
Cito: How do you think we can ‘Go Negosyo’ ourselves out of this situation regarding the economy?
Joey: This is a very challenging situation: a health issue that is now leading to an economic problem. If your business cannot operate under the new normal, then the new normal actually contradicts the business model in the sense that social distancing will really cut the number of people that will be allowed to enter your business. That confidence is not there, the confidence to spend money as well. People are saving because they don’t know how long this crisis will last.
For many businesses, it will be very challenging because it is really a question on buhay or trabaho. We have to save both lives and jobs.
My advice to many entrepreneurs is to close your business if your cash flow is negative, there is no point in maintaining your business under this current situation, wasting your working capital, incurring debt, or worse, eating into your family’s savings. You don’t want that to happen. One should not be embarrassed. It’s not your fault, but it’s the situation.
Unfortunately, many businesses in the Philippines are restaurants, retail stores, spa services, and tourism. Congress is trying to pass a P1-trillion stimulus package. While it’s a great effort, I don’t think that’s the solution here. The problem here is you cannot force businesses to continue to operate because their business models are not viable at this point in time. It all goes back to the point of lives and livelihoods. People will have to close for the time being. Those who have no jobs will have to find a way to reinvent themselves. This is the situation we’re faced with right now.
Cito: What would you tell businesses as far as layoffs and letting people go?
Joey: Unfortunately, the contractuals are really the first ones to go. Most of the labor force are contractual. There are some companies that would give furlough. They try to give them something for six months since these people are quite critical to their operation. This virus will be around for longer, so people will have to shift business models.
The government will have to, maybe, open up a bit more. I shared this with Secretary Dominguez. I agree that the P1.3-trillion stimulus is a great effort on the part of the congressmen, but I don’t think it’s the solution. The solution really is to open up the economy more. But if you open up the economy, there is more risk of the infection spreading. That’s why, in the private sector, our mantra is test, test, test. It’s key to creating visibility.
There are 350 companies from the private sector testing their employees today – I can share with you that many of them are having greater visibility in what’s happening to their situation. They can see who’s infected, who’s past infected (IgG). We are seeing a number of them who are IgG (previously infected). But then, we still cannot allow our guards to (drop), we have to be careful.
Cito: As a businessman, what would you say to some who claim that regular testing is an additional cost? Is it a worthwhile investment?
Joey: In our own company, we have basically seen a couple of employees who are IgG positive, which is good news. But in my mind, we were wondering how they can be IgG positive when they stay in the factory all this time? So we are now interviewing them. So, what does it give us? It gives us visibility and we can now reinforce the kind of protocols. Ricky Razon has been testing his employees every 15 days since March. As Mayor Vico said, if ARK did not come and do a rapid test in Pasig, five people would have infected more people. Visibility is really important and the cost of the rapid test is only P400.00.
The cost to the economy at this point in time is enormous. You can see the number of people losing their jobs because the economy is restricted. The only way is to follow the protocols of social distancing and all of that which will restrict the businesses from operating viably, that’s a fact. What is cheaper? Testing is cheaper. We’re doing rapid tests and it’s growing. More than 350 companies are doing it. I bet in about 15 days, we will hit 400. LGUs are also doing rapid testing. On top of that, we are also contributing to the government’s PCR testing capacity. We are donating to 11 government hospitals.
The third thing that we have discovered is what we call pooled PCR testing. Now, we have the DOH and Sec. Vince Dizon to approve this new strategy. If you practice pooled testing you will increase the PCR testing capacity. What does it give you? It brings down the cost of testing because you will use fewer test kits, more swabs, but fewer test kits. You increase the capacity of the RT-PCR system by the number of samples you put in the test kits. Hopefully, the DOH will give its go-signal as this method is already being used in other countries like China and Germany.
Cito: Have you talked to the Philippine Medical Association about this new idea?
Joey: I am told that the DOH is open to this idea, as well as Sec. Vince Dizon, the PMA is definitely open. We agreed to work together, they are going to support us and they believe that pooled testing is another strategy. But the protocols have to be done. Rep. Garin is working on that right now with the pathology group.
The private sector’s point-of-view is that the only solution to the health problem we have is to really open up the economy, but still be guarded. The only way to guard that is through visibility and visibility through testing.