Chapter 1

THE PROBLEM

Introduction

The COVID-19 pandemic had significantly affected key industries and

changed the business environment. Micro-business operations have been

particularly hit hard. Whenever crises occur, Micro, Small, and Medium

enterprises (MSMEs) tend to be more vulnerable than large organizations. Small

businesses were typically hit harder, languished longer, and faced a steeper

recovery trajectory than larger enterprises, attributed to the liability of the

smallness of MSMEs (United Nations Office for Disaster Risk Reduction, 2020).

Moreover, in a study of small businesses across several countries in Asia

amidst the COVID-19 pandemic, Francisco et al. (2020) found that with the

sudden onset of the pandemic in 2020, the MSMEs were forced to go online or

find other ways to operate, retraining their staff to provide online sales and

customer service. Due to their high fixed costs and knowledge requirements,

micro businesses were also less able to respond quickly to regulations and

customer demand changes when the pandemic struck. As a result, they faced

more significant challenges when trying to increase their web presence,

increased takeout or delivery services, or dealt with liability uncertainty during the

health crisis.
 In addition, in the wake of COVID-19, an abrupt surge in unemployment

had shaken the US workforce. It is especially acute for small businesses (those

with 500 or fewer employees), which accounted for a disproportionate share of

the vulnerable jobs. Before COVID-19, they provided nearly half of all US private-

sector jobs, yet they accounted for 54 percent (30 million) of the most exposed

jobs during COVID-19. The COVID-19 pandemic has shown how poorly supply

networks were prepared for unplanned disruptions and environmental changes

because so many responses failed, unveiling the actual state of operations and

supply chain management resilience (Polyviou et al., 2019).

Furthermore, in the Philippines, MSMEs played an essential role in the

economy by fostering growth, employment, and income and account for 99.5

percent of established businesses in the country (Department of Trade and

Industry, 2019). MSMEs have also been referred to as the backbone and

economic lifeblood of the Philippines. Because of the COVID-19 pandemic, the

country experienced a hybrid of an economic shock and public health crisis

unlike anything ever seen in decades (Flaminiano, Francisco, & Caboverde,

2021).

However, while MSMEs have fewer resources and operate on a smaller

scale than larger organizations, they have the agility to respond quickly to the

changes in their environment (Lu & Ramamurthy, 2011). In the provinces,

particularly Pagadian City, Zamboanga del Sur, the effects of the COVID-19

2
pandemic reflected the situation faced by micro-businesses during the

pandemic's peak. Some were forced to stop their operations due to the health

protocols and restrictions. However, most micro-business owners coped with the

changes and seized every opportunity to keep their businesses afloat in the

marketplace. Given the nature of micro-enterprises, the need for labor costs was

less, thus allowing these types of businesses to get back faster than those bigger

ones. When approached with the proper attitude, difficult times could become

opportunities for the business to grow. Difficult times challenges creativity and

the ability to decide. Emergencies and catastrophes motivate enterprises to

innovate and be creative.

MSMEs had been of mounting significance for their rolling contribution to

employment and income growth with export earnings and their ability to react to

market alteration and innovative practices in local or global spheres (World Bank

Group, 2018). And because of the pandemic brought by COVID-19, examining its

effect on MSMEs had become more critical, as to discover ways these small

enterprises can survive amid this health and economic crisis. The onset of the

COVID-19 pandemic had been a considerable challenge to the Philippine

economy, especially to micro businesses in Pagadian City. Therefore, this study

intended to investigate how COVID-19 has affected micro-business operations in

the Philippines, specifically in Pagadian City.

3
Theoretical and Conceptual Framework

This study argued that COVID-19 greatly affected micro-business

operations, anchored on the Keynesian theory (John Maynard Keynes, 1936).

The theory stated that demand creates its supply; thus, changes in

aggregate demand cause real GDP and employment changes (Khan Academy,

2020). Aggregate supply and aggregate demand convey how much businesses

were willing to produce and what consumers were willing to demand at all

possible price points. A region's economy might experience a significant

downturn if there was little product demand, indicating that COVID-19 played an

important role.

As explained by the Keynesian theory, COVID-19 has created a scenario

where the supply and demand for goods and services have temporarily halted

due to restrictions and health protocols, which caused a demand reduction (for

goods and services), thus bringing countries on the verge of economic recession

as revenue, production, and manpower were affected. The eruption of COVID-19

has jolted the national and international economies, but most significantly, the

micro ones. In addition, it was mainly daily wage earners and people running

small businesses that had been seriously exploited and subjected to a curfew-

like situation due to restrictions and closures. However, Keynesian theory

4
suggested that supportive macroeconomic policies must restore trust, demand

recovery, and provide interest-free loans to overcome the current and upcoming

crisis (Abbas et al., 2022).

Revenue. MSMEs in developing Asia experienced considerably reduced

employment and sales revenues in the first few months after the outbreak of the

COVID-19 pandemic. It also resulted in a long-term decrease in productivity. The

COVID-19 pandemic's effect on revenue, or the money generated from normal

business operations, was also very severe. Some go out of business, and others

temporarily halted operations because of low sales or income while incurring

higher costs and expenses, especially during the lockdowns, where only

necessary industries were allowed to operate. This scenario had impacted a lot

of micro-businesses from other sectors not included in the "essential goods and

services" during the pandemic. Fairlie & Fossen (2021) added to the scant

evidence on the sales and revenues of micro businesses due to the COVID-19

pandemic.

In addition, tiny businesses were part of an entrepreneurial ecosystem that

depends on other factors rather than working alone. Many small businesses

operate in the retail and service sectors and serve the end consumers through

face-to-face interactions. Owners of businesses who somehow managed to keep

their operations were still impacted by the temporary closure since the income

losses were reflected in their business for the closed months. MSMEs were the

5
most adversely affected by the COVID-19 pandemic, especially concerning how

revenues will be derived from the restrictions imposed and the innovative

competition in the market.

Production. Similarly, due to the novel coronavirus (COVID-19) spreading

worldwide, the global pandemic disrupted multiple supply chains, domestic and

international. Micro-business production or distribution was affected because the

availability of goods was influenced by the lockdowns imposed by the

government in different areas of the country. Often, goods can't pass through

other cities or communities because of the strict protocols being followed. Not

only for the micro businesses that depended on those goods or materials but

also for the suppliers, who at times incurred losses because of the restrictions

and closures imposed by authorities. Situations where spoilage and waste of

goods/products increased because it was impossible to pass through borders

without incurring more costs to comply with the health protocols.

As Harel (2021) noted, small businesses often operate in a niche and

particular market and can provide something different from the standardized

products and services offered by large companies. That is why, the disruptive

changes from COVID-19 have caused severe damage to the global economy,

especially micro businesses. Its impact on public health likely devastated all

economic systems, affecting aggregate demand and the overall level of

manufacturing production and related industries.

6
 Manpower. In the case of manpower or the people available for work or

service, informal-economy workers were particularly vulnerable because the

majority lacked social protection and access to quality health care and had lost

access to productive assets. COVID-19 had shuddered the world economy, and

it was a pandemic that caused a giant distraction to life and livelihoods as well as

social and economic systems in the world. Many cannot feed themselves and

their families without the means to earn an income during lockdowns. For the

majority, having no income means no food or, at most, less and less nutritious

food. The reduction in employment was more severe for non-permanent

employees, but the reduction in work for permanent or regular employees was

also significant. Thus, the effect of the pandemic on employment and the

sustainability of the business was quite severe because of the restrictions and

protocols to be followed, which affect the capacity of MSMEs to operate and the

availability of supplies and labor. The lesser the production of goods/products to

be distributed, the less delivery was needed, and in turn, the less income was

generated. The epidemic's effects go beyond death and indisposition and had an

enormous impact on economic systems with dangerous social consequences

(Abbas et al., 2022).

However, in some cases unique to micro businesses, where owners

employed family members in their operations, the problem of unemployment was

less likely to be impactful if, and only if, the business stayed afloat in the market.

7
Ultimately, it still boiled down to the revenues generated by the business, which

were still greatly affected by the COVID-19 pandemic (Shinozaki, ShigehiroRao,

& Nagraj, 2020).

Therefore, the area of micro-business operations and the theory

previously mentioned were the paradigms that contributed to the investigation of

the study.

8
Level of Effect of COVID-19
Micro Business
Revenue
Operations
Production
Manpower

Figure 1. Schematic diagram of the interplay of variables of the study.

9
Statement of the Problem

This study aimed to determine the level of effect of covid-19 on micro-

business operations in Pagadian City. Specifically, it focused on the following

questions:

1. What were the effects of COVID-19 on micro-business operations in

Pagadian City in terms of:

1.1 Revenue;

1.2 Production; and

1:3 Manpower?

2. What was the level of effect of Covid-19 on the micro-business sectors?

3. Was there a significant relationship between the level of effect of COVID-

19 on Micro-Business Operations?

Hypothesis

Ho1: There was no significant relationship between the level of effect of

COVID-19 on Micro-Business Operations in Pagadian City for the year

2020-2021.

Significance of the Study

The findings of this research study would benefit the following:

10
 Business Owners. The results of the research work might help the

business's operations. This study might be a reference for business owners

operating during an economic crisis or pandemic.

Consumers. The results of this study might help consumers be aware of

the challenges faced by micro businesses and know the importance of

supporting local businesses, especially during disasters or crises.

Crisis Management. The study's findings might provide insight into crisis

management in identifying their survival and strategies if a crisis and challenges

occur.

Future Researchers. The results of this study might help future

researchers conduct further studies about the level of effect of COVID-19 on

micro businesses and contribute to gathering relevant information that will be

useful to their research.

Scope and Delimitation of the Study

The study focused on the level of effect of COVID-19 on micro-business

operations in Pagadian City during the year 2020-2021 in terms of revenue,

production, and manpower and the results brought by the global pandemic. The

respondents of the study were the 60 micro businesses operating in Brgy. Sta.

Lucia, Pagadian City.

11
Definition of Terms

For clarification, the paramount terms used in the study have been

defined. The following terms are used:

Coronavirus disease (COVID-19): The term COVID-19 was referring to

an infectious disease caused by the SARS-CoV-2 virus and was coined from

"coronavirus disease 2019." This virus affected the whole world and led to the

global pandemic, a health crisis that put the economies of all countries on hold

and, in turn, affected businesses, especially the small ones.

Manpower: The term "manpower" was pertaining to the number of people

working or the employees or staff who worked in the business in exchange for

compensation. It can be the cashier, the server, etc.

Micro business: The term was referring to a small business that

employed few people or usually operated with fewer than ten people and started

with a small amount of capital, such as sari-sari stores, retail stores, fruit

vendors, computer shops, etc.

12
 Production: This term was referring to the organized activity of making a

product or service. For micro businesses, the show can be in the form of

transforming resources into a finished product or simply buying the goods to be

sold to customers.

Revenue: The term was referring to the business's income derived from

the total units sold multiplied by the sales price of the products or services sold to

customers.

13
 Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

Various related literature and studies were incorporated into this study to

see the relationship between the identified variables. This chapter represented

an overview of previous research on the level of effect of COVID-19 on micro-

business operations. The discussion was organized based on the topics which

were the focus of the study.

Effects of COVID-19

Coronavirus disease (COVID-19) was an infectious disease caused by the

SARS-CoV-2 virus. This disease has spread worldwide like wildfire and caused

everyone's lives to change in a blink. Different reports showed it was the most

horrible global crisis since WWII. COVID-19 was a massive health crisis and

much more. This virus has caused a significant short-term economic recession,

causing numerous large and small businesses to close, tens of millions of people

to lose their jobs, and other repercussions on company operations. Micro, Small,

and Medium-sized Enterprises (MSMEs) around the world had played a

14
significant part in preventing unemployment, poverty, and food insecurity rates

from further increasing at any moment (Engidaw, 2022).

MSMEs were among the most severe victims of the COVID-19 pandemic.

Micro businesses carry out a country's economy. They were named "the

backbone of any economy," but with the ripple effect of COVID-19 on economies

worldwide, protecting and sustaining them had become more critical than ever.

According to the results of a poll performed in the Philippines in February 2020,

about 65 percent of respondents predicted that the COVID-19 pandemic would

significantly impact the national economy. As a result of these events, supply

lines were disrupted, economies were virtually shut down for an extended time,

and financial markets were thrown into chaos.

More than that, Hepburn et al. (2020) noted that the COVID-19 pandemic

heavily affected the demand side. At the same time, numerous small businesses

and even companies were encountering various catastrophes with a specific ratio

of income losses. Predominantly, businesses face multiple issues, such as

inventory-supply disturbances, termination of international trade orders, raw

material scarcity, and much more. Lockdowns enforced by the authorities

through micro businesses had harmed people's livelihoods.

It can be mentioned that the Keynesian theory indicated that low demand

for products in the economy of a particular region was considered to play a

15
significant role in causing a major downturn in its respective economy. Due to

high fixed costs and required knowledge, micro-businesses faced enormous

barriers to increasing their web presence, expanding takeout services, adding

delivery services, and coping with uncertainty regarding liability during the health

crisis (Silver et al., 2022).

Revenue

Revenue was the money generated from normal business operations,

calculated as the average sales price times the number of units sold. In this case,

a survey was conducted to analyze MSMEs' performance and behavior in the

National Capital Region (NCR) and Calabarzon Region in the Philippines, about

six months into implementing lockdown restrictions under "community

quarantine" in March 2020. Almost 63 percent of the MSMEs surveyed reported

that their operations had never been affected by disasters in the past before

COVID-19, implying that the pandemic might be the first and most significant

negative shock to their operations that many small businesses had experienced,

resulting in the loss of potential sales or revenue (Flaminiano, Francisco, and

Caboverde, 2021).

Moreover, local restrictions had forced enterprises to reduce their

operating hours or close their businesses because the government had imposed

strict curfew hours (8 p.m. to 5 a.m.) during the community quarantine, resulting

in low customer demand and ultimately low revenues. Small business owners

who shut down their operations because of the pandemic suffered enormous

16
losses during the prolonged period, which resulted in them permanently closing

their businesses. Since micro companies, unlike other industries, likely had a

lower ability to quickly adjust to changes in regulations and demand when the

pandemic hit, the relative revenue losses among these businesses during the

onset of the COVID-19 crisis might be more significant than those among big

companies.

Production

Production was the process of turning raw materials or inputs into finished

goods or products in manufacturing. The untried lockdown undersized the

business activities of the MSMEs sector and mounted adverse shocks in the form

of non-procurement of raw materials, reduced production and supply of final

products, and non-availability of employees to work in the production process.

The consequences were wide and open, like loss of employment, reduction in

revenue generation, declined sales, and a cut back in the income of the working

class (Hariharan et al., 2021).

In addition, the COVID-19 pandemic had brought to light how unprepared

supply chains were to unanticipated shifts and shocks in their environment.

Border closures, trade restrictions, and confinement policies had made it difficult

for farmers to access markets, including buying inputs and selling their produce,

and for agricultural workers to harvest crops. As a result, domestic and

international food supply chains halted, and access to wholesome and

reasonably priced raw materials for production and distribution had decreased.

17
The pandemic situation also raised the demand for rare production items such as

ventilators, gloves, face shields, masks, and sanitizers at a high rate. Therefore,

a flexible supply system for micro businesses must fulfill such necessary items'

requirements.

Manpower

Manpower was the number of people working or available for work or

service. According to a joint statement by the World Health Organization (WHO),

International Labor Organization (ILO), Food and Agriculture Organization (FAO),

and International Fund for Agricultural Development (IFAD) written by

Chriscaden (2020), the pandemic had been affecting the entire food system and

had laid bare its fragility, decimated jobs, and placed millions of livelihoods at

risk. As breadwinners lose jobs, fall ill, and die, the food security and nutrition of

millions of women and men were threatened, with those in low-income countries,

particularly the most marginalized populations, including small-scale farmers and

indigenous people, being hardest hit.

Additionally, the disruption caused by the COVID-19 pandemic also meant

many businesses couldn't operate in the usual way. Many employees couldn't go

to work, and customers couldn't buy their products or services. The challenge

18
was especially acute for MSMEs, which accounted for a disproportionate share

of vulnerable jobs. Lockdown regulations had notably hurt the retail sector,

putting many people's livelihoods in danger.

Micro-Business Operations

The novel coronavirus disease, COVID-19, had brought significant change

to people's lives and business activities nationally, regionally, and globally. The

Philippines took swift action—including enhanced community quarantine (ECQ)

—to contain the pandemic and launched an emergency subsidy program with

massive public spending to support disrupted households and businesses. Six

months after the March lockdown, the Philippine economy has moved to the

recovery stage. Still, micro, small, and medium-sized enterprises (MSMEs)

continued to confront a sharp drop in demand and revenue (Shinozaki,

ShigehiroRao, & Nagraj, 2020).

Initially, government support tended to treat all MSMEs almost equally.

Since MSMEs were far from homogeneous, there was an expectation that a

specific differentiated approach to MSME support would work better than the

one-size-fits-all approach. Indeed, many governments began treating MSMEs in

different sectors differently after observing substantial industry diversity in the

damage resulting from the pandemic. However, in some countries that lack

adequate government assistance, most MSMEs had financial difficulties and

even go out of business. MSMEs had little capacity and resources to recover

19
from a crisis, particularly those operating in developing countries such as the

Philippines, which had high poverty and low economic and political stability

(Parilla, 2021).

Although carrying out business operations during the pandemic was

challenging for MSMEs, it was not a reason for some to back down. According to

Gurchiek (2020), millions of small-business owners across the country faced a

similar challenge as the coronavirus shut down much of the economy, and

consumers stayed home to slow the spread of the virus. For businesses to

continue operating, owners devised innovative strategies to alter their operating

models to survive.

It can also be mentioned that by allocating resources to pertinent business

divisions, small to medium enterprises raised the possibility of their business

developing a competitive advantage that sets them apart from their counterparts

(Naradda et al. 2020). The challenges were authentic for many disrupted

businesses. However, disruption also bred innovation, as new digital businesses

were created to meet evolving needs and new market opportunities.

Unfortunately, many micro-businesses still failed. Others have survived and used

innovations adopted during the pandemic to drive revenue and generate new

opportunities as the economy recovers. Still, the impact on millions of employees

nationally was uncertain.

20
 The studies and literature mentioned in this chapter provided the researcher

with meaningful insight and relevant information that contributed to the strong

interest in carrying out the findings under investigation.

Chapter 3

RESEARCH METHODS

The chapter presented the research methodology and procedures used to

investigate this study. It also included a discussion of the research design, the

participants, the research instrument, the data gathering, the scoring procedure,

and the statistical treatment used in the research.

Research Design

A descriptive-correlational research design was used in the study. The

research design provided a bigger view of the current state of affairs or described

21
the situation where the variables exist and discovered relationships that occurred

naturally between and among them that allowed the prediction of future events

from present knowledge (Stangor, 2013). In this study, the research design

explored the relationship between the level of effect of COVID-19 on micro-

business operations in Pagadian City (2020–2021).

Participants of the Study and Sampling Procedure

The participants of the study were the micro businesses operating in Brgy.

Sta. Lucia, Pagadian City, in the province of Zamboanga del Sur. There were 70

micro-businesses operating in the area during 2020–2021. From the total

population, 60 microbusinesses were selected to participate in the study. The

final number of respondents was nominated through the use of Slovin's

(Yamane's) formula (n=N/[1 + N(e)2]). The respondents were selected as it was

assumed they had been in operation before and during the COVID-19 pandemic.

Moreover, random sampling was used to ensure that the results obtained

from the sample would approximate what would have been obtained if the entire

population had been measured (Shadish et al., 2002). The simplest random

sample allowed all the units in the people to have an equal chance of being

selected. The participants were selected using this method, as they were chosen

entirely by case based on their accessibility, availability, and proximity.

Research Instrument

22
 Researcher-made survey questionnaires were administered to gather the

data entitled "Level of Effect of COVID-19 on Micro Businesses (2020–2021)."

This questionnaire was used in the study to answer the questions focused on the

problem statement. Structured and closed-ended questions were used to find out

the exact answer to the questions. This research instrument identified the three

components or variables relating to the effects of COVID-19: revenue,

production, and manpower. Specifically, the "Level of Effect of COVID-19 on

Micro Businesses (2020–2021)" survey questionnaire comprised 20 items.

Validity of Instrument

The adviser examined and made modifications to the survey questionnaire

that was utilized in the study before it was given to the panel committee for a final

check and validation. This was done to ensure that the contents of the checklist

were censored and contained no biases or discriminatory statements that would

affect the respondents' or other readers' feelings or insights.

Data Gathering Procedures

Before administering the questionnaires, permission to conduct the survey

was secured from the school's dean of the college of business education

department and the barangay captain/ the head of the association governing the

micro businesses operating in the area of the study. As soon as approval was

granted, the survey questionnaires were distributed personally by the

23
researchers to the respondents. A letter explaining the intent of the study was

attached to each questionnaire.

The following protocols were observed in conducting the survey: First, the

respondents were assured that their responses were confidential and would not

affect their daily operations. They were also reminded of the test's purpose and

the importance of genuine efforts and honesty to ensure the validity of the

survey. Second, to confirm that they voluntarily agreed to participate in the study,

they signed a consent form and were informed how vital their participation was.

Immediate retrieval after the respondents had answered the questionnaire was

done. The data gathered were then tailed, tabulated, analyzed, and interpreted.

Scoring Procedure

The researchers have utilized this scale to determine the effects of

COVID-19 on Micro Business Operations in Pagadian City.

Numerical Rating Range Interpretation

4 3.51 - 4.00 Strongly Agree
3 2.51 - 3.50 Agree
2 1.51 - 2.50 Disagree
1 1.0 - 1.50 Strongly Disagree

24
 Additionally, to determine the level of effect of Covid-19 on micro business

operations the researchers have also utilized this scale.

Numerical Rating Range Interpretation

4 3.51 – 4.00 Very High

3 2.51 – 3.50 High

2 1.51 – 2.50 Low

1 1.0 – 1.50 Very

Statistical Treatment

To obtain an extensive understanding of the data, the following statistical

tools were used: With problem 1; descriptive data were organized using statistics

such as frequency, percentage, mean, and standard deviation to determine what

were the effects of COVID-19 are on micro-business operations in terms of

revenue, production, and manpower.

For problem number 2, descriptive statistics such as frequency,

percentage, mean, and standard deviation were used to determine the level of

effect of COVID-19 on the micro-business sectors.

For problem number 3, inferential statistics such as Pearson's r was

utilized to determine the significant relationship between the level of effect of

COVID-19 on micro-business operations.

25
 Chapter 4

PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA

This chapter presented the significant findings of the study, analysis, and

interpretation of the data gathered to explain the level of effect of COVID-19 on

micro-business operations in Pagadian City. The presentation of results was

organized based on the order of the questions presented in the problem

statement. Furthermore, the research findings in this chapter were supported

with tables to ensure a comprehensive understanding.

26
Problem 1: What were the effects of covid-19 on micro-business operations

in Pagadian City in terms of:

1.1 Revenue;

1.2 Production; and

1:3 Manpower?

Table 1 showed the frequency, percentage, mean distribution, and

standard deviation of the micro-businesses revenue during the COVID-19

pandemic. Overall, the data revealed a high response with a mean of (M = 2.53)

in revenue. The findings implied that micro businesses have been negatively

affected by COVID-19 in their daily operations, from the loss of potential sales to

the worst negative shock to their revenues (Flaminiano, Francisco, and

Caboverde, 2021). Government restrictions, health protocols, and lockdowns

halted their operations, resulting in low sales, a big challenge for micro

businesses.

Table 1: Frequency, Percentage, and Mean Distribution of Respondents'

Revenue
Range Interpretation F %
3.51 - 4.00 Very High 11 19%
2.51 - 3.50 High 21 34%
1.51 - 2.50 Low 16 27%
1.00 - 1.50 Very Low 12 20%
Total 60 100%
Overall Mean 2.53

27
 Interpretation High
SD 0.40

Items Mean Interpretation SD

1. Our business was negatively affected 2.88 High .90
by the COVID-19 pandemic.
2. Our business had the opportunity to 3.02 High .85
thrive amidst the pandemic.
3. The revenue of our business 2.35 Low .86
increased during the first year of the
pandemic.
4. The revenue of our business 2.20 Low 1.05
decreased and incurred a loss during
the first year of the pandemic.
5. Our business stopped operating a 2.18 Low 1.08
few months after the pandemic started
but came back into operation after a few
months.

On top of that, the question in item no. 2 ("Our business had the

opportunity to thrive amidst the pandemic") gained the highest mean of 3.02 and

was rated as high. The results strengthened the researchers' assumption that

micro businesses, even with the restrictions and health concerns during the

COVID-19 pandemic, have come up with ideas and looked for opportunities to

bounce back and continue their operations, thus allowed them to generate

revenue and profit. Additionally, item no.1 ("Our business was negatively

affected by the COVID-19 pandemic") got the second highest mean of 2.88, also

interpreted as high, confirmed the researcher's assumption on the level of the

28
negative effect of the COVID-19 pandemic on micro-businesses operating

revenue, resulting to unfavorable outcomes of business operations.

Table 2 presented the frequency, percentage, mean distribution, and

standard deviation of the microbusinesses' production during the COVID-19

pandemic. The figures revealed a low response, with a mean of (M = 2.48) in

production. The results explained that micro businesses did not stop production

or permanently close a location of their business; however, the pandemic

undersized their production capacity or reduced the number of products they sold

(Hariharan et al., 2021). Because of the protocols imposed to limit physical

contact between people, businesses were given a limited time to operate; thus,

production was reduced to avoid spoilage and losses.

Table 2: Frequency, Percentage, and Mean Distribution of Respondents'

Production

Range Interpretation F %
3.51 - 4.00 Very High 13 22%
2.51 - 3.50 High 18 30%
1.51 - 2.50 Low 13 22%
1.00 - 1.50 Very Low 15 26%
Total 60 100%
Overall Mean 2.48
Interpretation Low
SD 0.68

29
 Items Mean Interpretation SD
1. Our production capacity and 2.97 High .92
output (goods/services) changed
during the first year of the pandemic.
2. We temporarily closed a location 2.08 Low 1.01
of our business during the first year
of the pandemic.
3. We permanently closed a location 1.47 Very Low .79
of our business during the first year
of the pandemic.
4. The availability of supplies or 2.88 High .85
inputs caused by the restrictions and
lockdowns affected our business.
5. The cost of goods or raw 3.02 High 1.00
materials for our business increased
during the first year of the pandemic.

Moreover, the questions in item no. 5 ("The cost of goods or raw materials

for our business increased during the first year of the pandemic") and no. 1 ("Our

production capacity and output (goods and services) changed during the first

year of the pandemic'') gained the highest mean of 3.02 and 2.88, respectively,

and were assessed as high. These results confirmed the researchers'

assumption that since suppliers cannot access markets when COVID-19 was at

its peak, domestic and international food supply chains have been disrupted, and

access to wholesome and reasonably priced raw materials for production and

distribution has decreased. This led to reduced production and fewer products

30
offered in physical stores in response to the limited operating hours imposed by

the local government.

Table 3 displayed the frequency, percentage, mean distribution, and

standard deviation of the micro-businesses manpower during the COVID-19

pandemic. Overall, the results showed a low response, with a mean of (M = 2.21)

in manpower. Since microbusinesses usually operate with fewer than ten people,

hiring additional ones or reducing their number was unnecessary. Moreover, with

the nature of the business being micro, there was no need for a vast labor force,

unlike in big companies. Most even work with their own families in this type of

business, which was why hiring or layoffs were unnecessary. Thus, the pandemic

might have decimated jobs and placed millions of livelihoods at risk, but job

vacancies were back around the summer of 2021 (Bank of England, 2021).

Table 3: Frequency, Percentage, and Mean Distribution of Respondents'

Manpower
Range Interpretation F %
3.51 - 4.00 Very High 10 16%
2.51 - 3.50 High 15 24%
1.51 - 2.50 Low 14 23%
1.00 - 1.50 Very Low 22 36%
Total 60 100%
Overall Mean 2.21
Interpretation Low
SD 0.46

31
 Items Mean Interpretation SD
1. Our business had more than 2 2.97 High 1.00
staff/employees before the pandemic.
2. We hired additional 1.88 Low .94
staff/employees after the pandemic
broke out.
3. We ended our work contract with 1.83 Low 1.10
all our employees leaving us to solely
manage our business during the first
few months of the pandemic.
4. We’ve had difficulties hiring new 2.13 Low 1.03
staff and paying existing employees
during the first year of the pandemic.
5. Our paid employees/staff’s total 2.22 Low 1.11
number of hours worked during the
first year of the pandemic decreased.

Furthermore, the question in item no. 1 ("Our business had more than two

staff or employees before the pandemic") gained the highest mean of 2.97,

interpreted as high, which meant most of the respondents already had more than

two people, including the owners themselves, operating the business up until the

pandemic started. However, item no. 5 ("Our paid employees' and staff's total

number of hours worked during the first year of the pandemic decreased") got the

second highest mean of 2.22, rated as low, which supported the researchers'

assumption that even though business operations were limited during the first

year of the pandemic, employees still worked the same hours as before, shifting

their market to a broader scale to cater to online customers and utilize delivery

services.

32
Problem 2: What was the level of effect of Covid-19 on the micro-business

sectors?

Table 4 showed the frequency, percentage, mean distribution, and

standard deviation of the level of effect of COVID-19 on micro-business sectors.

The data revealed the overall mean (M = 2.55) assessed as high, which shows

the COVID-19 pandemic's level of effect on the different micro-business sectors.

The results explained that the COVID-19 pandemic has highly affected micro

businesses in other sectors, including the competition for customers, the

shortage of supplies and raw materials, the limited operating hours, and most

importantly, the health of the staff and the owners. The COVID-19 pandemic's

impact on public health devastated all economic systems, affecting aggregate

demand and the overall level of manufacturing production and related industries,

where most micro businesses source their supplies. The effects go beyond death

or indisposition and enormously impacted economic systems, especially for

micro businesses (Abbas et al., 2022).

Table 4: Frequency, Percentage, and Mean Distribution of the Level of

Effect of COVID-19 on Micro-business Sectors
Scale Interpretation Frequency %

3.51-4.00 Very High 13 21%

2.51-3.50 High 21 35%

1.51-2.50 Low 13 22%

1.00-1.50 Very Low 13 32%

Total 60 100%

33
 Overall Mean 2.55

Interpretation High

SD 0.25

The findings in the overall average of micro businesses meant that as the

coronavirus shut down a large portion of the economy and customers stayed

home to prevent the virus' spread, millions of small business owners across the

nation had a similar problem. As a result, most have stopped their operations,

tried to adjust to the new normal, and developed innovative strategies to alter

their operating models to survive and stay in the market.

Furthermore, micro businesses were more vulnerable than bigger ones,

so they must utilize and adjust their available resources to continue their

operations. Hence, given these circumstances, micro businesses were among

the most affected during the COVID-19 pandemic.

Problem 3: Was there a significant relationship between the level of effect

of COVID-19 on Micro-Business Operations?

H1: There was no significant relationship between the level of effect of

COVID-19 on Micro-Business Operations in Pagadian City for the year

2020-2021.

34
 Table 5 showed Pearson's r values showing the relationship between the

level of effect of COVID-19 on micro-business operations. The data presented a

positive correlation between the level of impact of COVID-19 on micro business

operations. Specifically, the figures confirmed that there were significant

relationships found between COVID-19 and micro businesses revenue (r=.497**,

p=.001), production (r=.489**, p=.001), and manpower (r=.642**, p=.001). It was,

therefore, implied that with every increase in the level of effect of COVID-19,

there was likely an increasing effect on the microbusinesses' operations. Thus,

the level of effect of COVID-19 had a strong correlation to the micro-businesses

revenue, production, and manpower.

Table 5. Pearson's r Values, Showing the Relationship between the Level of

Effect of COVID-19 on Micro-Business Operations

Micro Business Operations

Level of effect Measurement Revenue Production Manpower

Covid-19 Pearson .497** .489** .642**

Correlation
Sig. (2-tailed) .001 .001 .001

**. Correlation was significant at the 0.05 level (2-tailed).

35
 Overall, the null hypothesis, which stated that there was no significant

relationship between the level of effect of COVID-19 on Micro-Business

Operations in Pagadian City for the years 2020–2021, was rejected. Evidence

showed that micro-business operations were significantly affected by the COVID-

19 pandemic. Micro, Small, and Medium-Sized Enterprises (MSMEs) were

among the most severe victims of the COVID-19 pandemic, so protecting and

sustaining them has become more critical than ever (Engidaw, 2022).

Furthermore, the general findings in this study explained that micro-

business owners adapted to the changes brought by the pandemic and has

taken opportunities to make their businesses stay afloat in the market. According

to Francisco et al. (2020), the sudden onset of the pandemic forced MSMEs to

go online or find other ways to operate, retrained their staff to provide online

sales and customer service. Due to their high fixed costs and knowledge

requirements, they could not respond quickly to regulations and customer

demand changes when the pandemic struck. Moreover, micro businesses were

negatively affected, and even the economy as a whole, which was a great

challenge and an opportunity for them to be innovative and creative.

Kheman (2020) explained that developing a competitive advantage during

economic crises was essential. It allowed MSMEs to sustain business operations

during extreme problems and become more resilient to shocks. Many continued

to struggle; however, disruption also spawned creativity, and many small digital

36
enterprises were established to satisfy changing requirements and new market

opportunities.

This assumption from the argument that COVID-19 greatly affected micro-

business operations, was supported by the Keynesian theory of John Maynard

Keynes (1936), which explained that due to regulations and health precautions,

COVID-19 has created a situation where the supply and demand chain for goods

and services has been temporarily stopped, especially during the early days of

the pandemic, which greatly affected it's revenue, production, and manpower.

In conclusion, micro businesses' operations stopped when they failed to

grasp the sudden changes in the market and the environment due to the global

health crisis brought by COVID-19. However, with proper implementation of

strategies and sound decision-making, MSMEs could quickly spot opportunities

even during the challenging situations like a pandemic.

Chapter 5

SUMMARY, FINDINGS, AND CONCLUSION

This chapter presented the summary, conclusion, and recommendation of

the study on the data presented in the previous chapter.

SUMMARY

37
 The Problem. This study aimed to determine the level of effect of COVID-

19 on micro-business operations in Pagadian City. Specifically, it focused on the

following questions: 1.) What were the effects of COVID-19 on micro-business

operations in Pagadian City in terms of revenue, production, and manpower? 2.)

What was the level of effect of COVID-19 on the micro-business sectors? 3.)

Was there a significant relationship between the level of effect of COVID-19 on

Micro-Business Operations?

Methods. A descriptive correlational research design was used in the

study to explore the relationship between the level of effect of COVID-19 and

micro-business operations in Pagadian City during the year 2020-2021. A total of

60 micro businesses operating in a district of Pagadian City participated in the

study. The data were analyzed using descriptive statistics such as frequency,

percentage, mean, and standard deviation to determine the level of effect of

COVID-19 on micro-business operations. Pearson's (r), or the correlation

coefficient, was utilized to determine the significant relationship between the level

of impact of COVID-19 on micro-business operations.

FINDINGS

The following results were disclosed after analyzing the data gathered.

1. The effects of COVID-19 on micro-business operations in Pagadian

City in terms of revenue were rated as "high." This implied that

micro businesses had been negatively affected by COVID-19 in

their daily operations, being the worst negative shock to their

38
 revenues. On the other hand, its effects on production gathered a

"low" response, which explained that micro businesses did not stop

producing goods or filling up inventories, but the pandemic truly

undersized their production capacity. Lastly, regarding manpower,

the effects of COVID-19 were graded as "low." This signified that

since micro businesses usually operate with fewer than ten people,

hiring additional ones or reducing them was not necessary, given

the nature of the business being micro.

2. The micro businesses garnered a mean of 2.55. This indicated that

COVID-19's effect on micro-business sectors was at the "high"

level. This also meant that the COVID-19 pandemic has highly

affected micro-business operations, from the lockdowns and

restrictions on the availability of goods and materials.

3. There was a significant relationship between the level of effect of

COVID-19 on Micro-Business Operations in Pagadian City for the

year 2020-2021. This implied that the degree to which the COVID-

19 pandemic has affected micro businesses was related to their

overall performance in their daily operations.

CONCLUSIONS

The COVID-19 pandemic significantly affected enterprises, most

significantly, the micro ones, as their capacity to withstand crises was weaker

than that of those bigger ones. The results confirmed the theory of John Maynard

39
Keynes (1936), the Keynesian theory stating that COVID-19 had created a

scenario where the supply and demand for goods and services had temporarily

halted due to restrictions and health protocols, thus affecting businesses'

revenue, production, and manpower. As such, when these businesses cannot

adapt to these changes, their operations stop. However, with the correct

decision-making, micro-businesses could easily take on opportunities given

these situations.

Generally, the study's findings confirmed the researchers' assumption that

the level of effect of COVID-19 was significantly related to micro-business

operations. Moreover, micro businesses needed to adjust or adapt to changes

and look for opportunities for the company to stay in the process despite a global

crisis like the COVID-19 pandemic that shocked all sectors and industries

worldwide.

RECOMMENDATIONS

Based on the preceding findings and conclusions of the study, the

following recommendations were drawn:

1. To the business owners:

40
1.1 consider some insights from the study to be beneficial to business

operations and to serve as a reference for business owners operating their

businesses during an economic crisis/pandemic.

1.2 create new or refine current business strategies, find the main points

in their customer experience, or even create new internal policies and

processes to become more efficient in times of crisis/pandemic.

1.3 discover the next new thing and understand the evolution they must

undertake to stay relevant to their target audience, especially in times of

economic crisis.

1.4 gather relevant information and strategies derived from the above

recommendations (1.1-1.3) and create an association for individuals

planning to startup a business, educate them about the implications of

sound decision making and effective strategies during an economic crisis

on business operations.

2. To the consumers:

2.1 be aware of micro businesses' challenges and know the importance of

supporting local businesses, especially during disasters/crises.

2.2 be informed about how the crisis affects MSMEs especially micro

businesses.

2.3 find out information about customer behaviors during the pandemic,

which may be helpful when starting a business.

41
 3. For crisis management:

3.1 identify survival techniques and strategies for MSMEs if a crisis like

the COVID-19 pandemic occurs.

3.2 Identify and respond to an unanticipated event or any negative

disruption with the potential to harm business processes.

4. To future researchers:

4.1 conduct further studies about the effect of covid-19 on micro

businesses and gather relevant information that will be useful to other

studies.

4.2 conduct further studies on other factors contributing to the level of

effect of COVID-19 and how it affects micro businesses.

REFERENCES

Abbass, K., Begum, H., Alam, A.S.A.F., Awang, A.H., Abdelsalam, M.K.,
Egdair, I.M.M., Wahid, R. (2022) "Fresh Insight through a Keynesian
Theory Approach to Investigate the Economic Impact of the COVID-19

42
 Pandemic in Pakistan " Sustainability 2022, 14, 1054
https://tinyurl.com/3tauwn72

Bank Of England (2021). "How has the Covid pandemic affected jobs?".
https://tinyurl.com/yyhks6mp

Bartik, A., Bertrand, M., Cullen, Z., Glaeser, E., Luca, M., & Stanton, C. (2020).
"The Impact of COVID-19 on Small Business Outcomes and
Expectations." https://tinyurl.com/mryrr8hj

Behera, M., Mishra, S., Mohapatra, N., & Behera, AR. (2021). "COVID-19
Pandemic and Micro, Small and Medium Enterprises (MSMEs): Policy
Response for Revival." https://tinyurl.com/337xxkfj

Chriscaden, K. (2020)."Impact of COVID-19 on people's livelihoods, their health,

and our food systems." World Health Organization (WHO), International
Labor Organization (ILO), Food and Agriculture Organization (FAO), &
International Fund for Agricultural Development (IFAD) Joint Statement.
https://tinyurl.com/fjwdvtcp

Engidaw, AE. (2022). "Small Businesses and their Challenges during COVID-19
Pandemic in Developing Countries: in the Case of Ethiopia." Journal of
Innovation and Entrepreneurship volume 11, Article number:1
https://tinyurl.com/sfhp72yp

Fabeil, NF., Pazim, KH., & Langgat, J. (2020). "The Impact of Covid-19
Pandemic Crisis on Micro-Enterprises: Entrepreneurs’ Perspective on
Business Continuity and Recovery Strategy." https://tinyurl.com/3564zfw6

Fairlie, R. (2020). "The impact of COVID‐19 on small business owners: Evidence

from the first 3 months after widespread social‐distancing restrictions."

43
 Journal of Economics & Management Strategy
https://tinyurl.com/3h9x27pu

Fairlie, R., & Fossen, F. (2021). "The early impacts of the COVID-19 pandemic
on business sales." https://tinyurl.com/3pahkk6f

Flaminiano, JP., Francisco, JP., & Caboverde CE. (2021). "Road to Recovery
and Resilience for Philippine MSMEs During the COVID-19 Pandemic."
https://tinyurl.com/pnwmytcc

Gurchiek, K. (2020). "Small Businesses Get Creative to Survive During the

Pandemic Innovations adopted during the coronavirus crisis drive revenue
and generate new opportunities." https://tinyurl.com/3fjb7cxp

Harel, R. (2021). "The Impact of COVID-19 on Small Businesses’ Performance

and Innovation." https://tinyurl.com/4fpxdd8n

Kalogiannidis, S. (2020). "Covid Impact on Small Business."

https://tinyurl.com/45zbvmtr

Khan Academy (2020). "Aggregate demand and aggregate supply curves."

Article https://tinyurl.com/55hxw5zj

Kumara, A., Luthrab, S., Manglac, S.K., & Kazançoğlud, Y. (2020). "COVID-19
impact on sustainable production and operations management."
https://tinyurl.com/2mtdr97a

Mehrotra, A., Gayatri, Cepe, L., Srivastava, M., Narain, N., & Mishra, S. (2020).
"Impact of COVID-19 Pandemic on Micro, Small, and Medium Enterprises
(MSMEs). https://tinyurl.com/btauss5t

44
Nugroho, Y., & Negara, SD. (2020). "COVID-19’s Impact on Micro, Small, &
Medium Enterprises and Tourism in Indonesia."
https://tinyurl.com/45ydhxs7

Parilla, E. (2021). "Effects of COVID-19 Pandemic on Micro, Small,.and Medium

Sized Enterprises in the Province of Ilocos Norte Philippines."
https://tinyurl.com/3pv99hmb

Rashid, S., & Ratten, V. (2021). "Entrepreneurial Ecosystems During COVID-19:

The Survival of Small Businesses Using Dynamic Capabilities". World
Journal of Entrepreneurship, Management, and Sustainable Development.
https://tinyurl.com/2p92cxn5

Silver, C., Attkinson, A., Gould, H., Ghahremani, Y., McCabe, A., Woolsey, B.,
Krishna, M., Osoba, S., Tompkins, T., Wrenn, S., Halton, C., Feldman, J.,
Laidley, C., Williams, W., & Hyatt, D. (2022). "Keynesian Economics
Theory: Definition and How It's Used." https://tinyurl.ph/qsKGC

Schleper, M., Gold, S., Trautrims, A., & Baldock, D. (2021). "Pandemic-induced
Knowledge Gaps in Operations and Supply Chain Management: COVID-
19’s Impacts on Retailing." https://tinyurl.com/2p92cxn5

Shinozaki, S., & Nagraj, L. (2021). "COVID-19 Impact on Micro, Small, and
Medium-Sized Enterprises under the Lockdown: Evidence from a Rapid
Survey in the Philippines." https://tinyurl.com/3pv99hmb

Sonobe, T., Takeda, A., Yoshida, S., & Truong, HT. (2021)."The Impacts of the
COVID-19 Pandemic on Micro, Small, and Medium Enterprises in Asia
and Their Digitalization Responses." ADBI Working Paper 1241. Tokyo:
Asian Development Bank Institute. https://tinyurl.com/mtwap9fk

45
Sun, T., Zhang, W., Dinca, M., & Raza, M. (2021). "Determining the impact of
Covid-19 on the business norms and performance of SMEs in China."
DOI: 10.1080/1331677X.2021.1937261 https://tinyurl.com/3afkvpay

46
APPENDICES

47