Loss after loss: Locked down restaurants pushed to brink of collapse

LAST KISS. A café crew serves customers at the Chocolate Kiss Café at the University of the Philippines-Diliman’s Bahay ng Alumni in Quezon City. PHOTO FROM CHOCOLATE KISS CAFÉ FACEBOOK PAGE

MANILA, Philippines—The Chocolate Kiss Café was considered a “home away from home” since its establishment in 1997, but 23 years later, the coffee shop, which had served thousands of clients, is blowing its final “goodbye kiss.”

Hailed as the “best go-to place” at the University of the Philippines–Diliman’s Bahay ng Alumni in Quezon City, the café was one of countless of food establishments that decided to “permanently close” because of the impact of the COVID-19 catastrophe, including a series of lockdowns that removed dine-in options.

READ: OCTA: PH needs ‘circuit-breaking’ lockdowns now amid Delta variant

Ina Flores Pahati, the owner, said the losses her coffee shop already incurred since the start of the lockdown, and “the prospect of not being able to operate at full capacity for an indeterminable period” has led her to the difficult decision of closing a “life-changing” business.

With the lockdown in Metro Manila from Aug. 6 to 20, 2021, Chocolate Kiss Café will not be alone in its fate. Hundreds, possibly thousands, of Micro, Small and Medium Enterprises (MSMEs) are on the brink of closure if not already shuttered since a series of lockdowns in 2020.

READ: Metro Manila under ECQ from August 6 to 20

The group Defend Jobs Philippines said 80 percent of establishments engaged in food services were hit by the lockdown implemented in Metro Manila and the provinces of Bulacan, Cavite, Laguna, and Rizal last March.

Graphic by Ed Lustan

Christian Lloyd Magsoy, the group’s spokesperson, explained that of all the food enterprises impacted by the government restriction on dine-in services, only 20 percent were able to recover losses while most are struggling to thrive.

“Now that the enhanced community quarantine (ECQ) will be imposed in Metro Manila, enterprises that are still trying to reel from the impacts of previous lockdowns will find it harder to thrive,” said Magsoy.

“It’s possible that some will decide to permanently close, especially because of the small assistance given by the government,” he said.

READ: Pandemic in PH: Misery beyond numbers

Last July, Trade Secretary Ramon Lopez said that the Small Business Corp., an entity created by law to deal with pandemic effects on businesses, has approved P4.79 billion in loans to 31,409 MSMEs through the COVID-19 Assistance to Restart Enterprises Program that was given P10 billion through Republic Act 11494 or the Bayanihan to Recover as One Act.

Graphic by Ed Lustan

In 2019 data from the Philippine Statistics Authority (PSA), 144,024 MSMEs were engaged in accommodation and food services.

The nature of restaurants

With the lockdowns and restrictions imposed by the government, the Chocolate Kiss Café found it hard to survive as it “has always relied on high volume in sustaining its operations.”

When either ECQ or general community Quarantine (GCQ) with Heightened Restrictions are implemented, food establishments are allowed to accept take-out or delivery orders, but are prohibited to entertain indoor and al fresco dine-in customers.

The 2018 Census of Philippine Business and Industry that was released by the PSA last Feb. 23, 2021, said the average yearly compensation per worker in restaurants and mobile food service businesses is P166,146.

Graphic by Ed Lustan

• Short-term accommodation activities: P204,195
• Restaurants and mobile food service activities: P166,146
• Beverage serving activities: P157,761
• Event catering and other food service activities: P148,528
• Other accommodation: P110,074

In the Philippines, a food establishment has an average of 13 employees, the report said.

In 2019, the food service sector’s sales reached $14.9 billion, but as Filipinos’ consumption of food outside their residences was impacted by lockdowns and restrictions imposed by the government, the United States Department of Agriculture–Foreign Agricultural Service office in Manila said that the sales possibly scaled down to $6.9 billion in 2020.

READ: Sectors that not only survived, but thrived during the pandemic

The 2018 Census of Philippine Business and Industry said that 75.2 percent or 33,451 of the 44,487 establishments engaged in food services and accommodation were restaurants and mobile food service businesses, like food trucks.

It also stated that of the 557,942 individuals employed in the sector, 377,227 workers were employed in restaurants and mobile food service activities.

But Eric Teng, president of Resto PH, a group of restaurant owners and employees in the Philippines, said that “our industry has declined by 56 percent in 2020 and we estimate a further decline this 2021.”

‘No time to prepare’

Last July 29, Metro Manila was placed in heightened GCQ—from July 30 to Aug. 5.

READ: NCR under GCQ ‘subject to heightened & additional restrictions’ until August 5; no dine-in

For Teng, the escalation of restrictions that would immediately take effect prompted his group to think “why such violence is warranted.”

“We agree that a lockdown may be necessary to stem the surge of the Delta variant, and we can agree that earlier lockdown is better before it’s too late,” he said.

“We just hope we had at least a 48-hour window to adjust before such drastic measures were put in effect,” he said.

Teng explained that for an industry that can take pride in its tremendous organic growth year on year, “to suddenly be treated like a disposable industry, that’s just sad.”

TSB