How SMEs can survive the trade war

The global economic landscape is shifting again, and this time, the tremors are closer to home.

On April 7, US President Donald Trump announced new tariffs on American imports from dozens of countries, including the Philippines, which faces a 17-percent tariff on its exports.

Other tariffs were also levied on our Southeast Asian neighbors: Vietnam, 46 percent; Thailand, 36 percent; Indonesia, 32 percent; Malaysia, 24 percent; and Cambodia, 49 percent.

Despite local officials' and business groups' optimism about the tariffs, small and medium enterprises (SMEs) will undoubtedly take a hit. As other countries threaten to retaliate with countermeasures, a large-scale global trade war may be on the horizon — eroding business confidence and slowing economic development.

SMEs will likely face higher input costs, disruptions in supplier relationships and lower consumer demand. Even when certain sectors appear shielded or advantaged in the short term, long-term volatility in pricing, procurement delays and retaliatory trade policies can lead to an unpredictable and more expensive operating environment.

These are challenges that disproportionately affect SMEs, which are already dealing with elevated borrowing costs. And while some optimism remains in interest rate cuts due to easing local inflation, the prevailing tone in both the market and the business community is caution.

For SMEs, which make up 99.5 percent of all businesses in the Philippines, this caution is not just prudent — it is essential.

Historically, business success is closely associated with revenue growth, expanding footprints, scaling operations. But in an environment where global policies can shift overnight and supply chains are fragile, adaptability and financial resilience are becoming the more reliable indicators of long-term viability.

First Circle, a financing company providing credit lines to Philippine SMEs, has noticed many of its clients adapting to this shift in business priorities — likely due to persistent inflation and ongoing post-pandemic uncertainty in both domestic and global markets.

While some SMEs are still in pursuit of aggressive revenue growth and market expansion, a growing number are redefining success through the lens of resilience: consistently meeting payroll and supplier obligations; keeping operations lean and maintaining enough financial headroom to navigate disruptions.

For these businesses, stability has become the priority. It means managing risk conservatively and staying operational in turbulent conditions.

Credit line

What does it take to operate with resilience in this economic environment? For all SMEs, the baseline starts with access to fast and flexible financing. Business loans and other traditional debt products, while essential, are often rigid.

In contrast, a credit line offers preapproved access to funds that SMEs can quickly tap into only when needed — without being locked into repayments until disbursement. This kind of financing can mean the difference between surviving a temporary disruption and facing a permanent closure.

SMEs must also focus on using their capital to create buffers for uncertainty. Among the most effective strategies is diversifying revenue streams. This could mean expanding with new product lines, targeting different customer segments or developing alternate sales channels such as e-commerce.

The goal is to reduce dependence on any one market or income source — so that, if one part of the business is disrupted, others can continue to generate cash flow.

Another essential tactic is building emergency cash reserves. While many SMEs operate with tight margins, setting aside a small percentage of monthly revenues into a contingency fund can make a difference when unexpected shocks arise.

These reserves serve as a financial cushion, helping businesses cover payroll, rent or critical inventory during lean periods without relying on high-interest credit or delaying obligations.

These strategic adjustments may require discipline and trade-offs in the short term, but they are key to long-term resilience. Adaptability is no longer optional — it is a core business strategy for SMEs hoping to survive and thrive in uncertain times.

As the world changes, so, too, must our definition of success. For SMEs, it may be time to look beyond growth — and start building businesses that are truly built to last.

Source: Manila Times

Sari-sari stores become hubs for women empowerment

Sari-sari stores are becoming hubs for cultivating psychological, social and economic empowerment among Filipina entrepreneurs, according to a study by startup Packworks in collaboration with the Philippine Institute for Development Studies (PIDS).

Findings of the PIDS- published study entitled “Gender, Microentrepreneurship, Human Flourishing: Exploring the Experiences of Women Sari-sari Store Owners toward Inclusive Growth” showed that sari-sari stores are not just a primary source of daily essentials but have also become a vital source of empowerment among women entrepreneurs.

“The results of the study suggest that women, through their ownership of sari-sari stores, are able to achieve individual well-being while also extending it to their own communities,” the study said.

“Thus, this study offered a nuanced perspective on the significance of sari-sari stores, not only to the economic development of communities, but the individual and social well-being of its women owners,” it added.

The study highlighted that women sari-sari store owners take pride in being considered entrepreneurs and business owners, which provides them a sense of independence, confidence, and fulfillment from managing their micro-retail businesses.

In addition, participants in the study also expressed that managing and operating sari-sari stores gives them a deeper sense of purpose and meaning in their lives.

“I can buy things for myself, my kid and my family now. I am not just a housewife anymore,” one participant in the study said. “Because of my store, I am now busy with other things apart from taking care of my family. I feel more fulfilled.”

The PIDS-published study also demonstrates that women store owners achieve social empowerment by earning higher social status. This is notably observed in their customers addressing them with terms of respect like ‘ma’am’ or ‘boss,’ a cultural marker of their elevated position within the community.

Moreover, women sari-sari store owners who exhibited characteristics of a transformational leader or qualities such as strong empathy, care, and collaboration with the community reported high levels of well-being, empowerment, optimism, and resilience.

“By becoming more independent and confident, women store owners were able to take on important roles within their communities,” Packworks said.

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Source: Philstar

How Mall Culture Moved to the Center of Philippine Life

The Philippines, a country known for its vibrant culture and warm hospitality, has seen a significant shift in its social and economic landscape over the past few decades. One of the most notable changes is the rise of mall culture, which has moved to the center of Philippine life. This phenomenon can be attributed to several factors, including the country’s tropical climate, urbanization, and the multifunctional nature of malls.

Historical Context and Evolution

The concept of malls in the Philippines began to take shape in the 1970s with the establishment of Ali Mall, the country’s first major shopping mall. Over the years, malls have evolved from simple shopping centers to multifunctional spaces that cater to a wide range of needs. Today, malls are not just places to shop; they are community hubs where people gather, socialize, and access various services.

Climate and Convenience

One of the primary reasons for the popularity of malls in the Philippines is the country’s tropical climate. With temperatures often soaring and the rainy season bringing heavy downpours, malls provide a comfortable, air-conditioned environment where people can escape the heat and rain. This convenience has made malls an attractive destination for Filipinos looking to spend their leisure time in a comfortable setting.

Urbanization and Accessibility

As the Philippines has urbanized, the development of malls has kept pace with the growing population in cities. Malls are strategically located in urban centers, making them easily accessible to a large number of people. This accessibility has made malls a central part of daily life for many Filipinos, who visit them not only for shopping but also for dining, entertainment, and even accessing government services.

Multifunctional Spaces

Modern malls in the Philippines are designed to be all-in-one destinations. They house a variety of establishments, including supermarkets, restaurants, cinemas, gyms, medical clinics, and even government offices. This multifunctionality makes malls a convenient place for people to accomplish multiple tasks in one trip. For instance, a person can shop for groceries, pay bills, watch a movie, and have a meal, all without leaving the mall.

Social and Cultural Hub

Malls have also become important social and cultural hubs in the Philippines. They host events, concerts, and exhibitions, providing a space for community engagement and cultural expression. Additionally, many malls hold Catholic masses on Sundays, further integrating them into the social fabric of Filipino life. This role as a community center has strengthened the bond between malls and the people who frequent them.

Economic Impact

The economic impact of malls in the Philippines cannot be overstated. They provide employment opportunities for thousands of people and contribute significantly to the local economy. According to data provided by the Philippine Retailers Association, shopping malls account for about 15% of the country's GNP and 33% of the entire services sector. The presence of malls has also spurred the growth of surrounding businesses, creating a ripple effect that benefits the broader community.

Conclusion

The rise of mall culture in the Philippines is a testament to the adaptability and resilience of Filipino society. Malls have become more than just shopping centers; they are integral parts of daily life, providing comfort, convenience, and a sense of community. As the country continues to develop, it is likely that malls will remain central to the social and economic landscape of the Philippines.

Source: ZRE