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Perspectives from the Frontline: How ASKI in the Philippines is dealing with the COVID-19 crisis

Updated: May 16

Author: e-MFP.


Like many major microfinance markets, the Philippines microfinance sector is suffering from the twin threats of a public health emergency and the mitigation response which entails economic shutdown, both of which disproportionately impact vulnerable population segments and the financial providers that serve them.


As part of our efforts to understand the impact of the pandemic on our partners, e-MFP reached out to Alalay sa Kaunlaran, Inc. (ASKI), a good and long-time friend of e-MFP, having been a winner and finalist of the European Microfinance Award on multiple occasions. Via an email exchange, ASKI brought us up to speed on the situation on the ground.

On March 16, 2020, through the Executive Order issued by President Rodrigo R. Duterte, the entire island of Luzon was placed under “Enhanced Community Quarantine” due to the increasing cases of COVID-19 in the country. This resulted in total lockdown affecting many cities and municipalities in Luzon including the areas of operation of ASKI. Many establishments, government offices and other private institutions were temporarily closed. Mass/public transportation were not allowed to operate, and people were restricted in going outside their homes and must conduct home quarantine.

This situation greatly affected the whole community including the microentrepreneur clients of ASKI. Restricting people’s movement from one village or municipality to the other made access to basic goods difficult and, in some areas, was exacerbated by the rising cost of commodities.

Since the March 16 Executive Order, the President last week yesterday extended the “Enhanced Community Quarantine” in some parts of Luzon where there are still an increasing number of COVID cases, until May 15, 2020. Some of ASKI’s offices are affected by this extension. There are also however areas of ASKI’s operations now under “General Community Quarantine” where slowly selected businesses will be allowed to open as well as mass transport but following the guidelines of the “new normal”.

As a follow-on to this initial update, ASKI’s President and CEO Mr. Rolando Victoria, sat down with us to discuss their response to the current situation. The following is an edited transcript of the interview.

e-MFP: As we saw in the 2019 European Microfinance Award on Strengthening Resilience to Climate Change, ASKI has developed (with the support of Oikocredit, an e-MFP member) a Disaster Risk Reduction Management (DRRM) program for crisis response. How has this helped you in the current situation?


Rolando Victoria (RV): As soon as the seriousness of the COVID-19 crisis became clear, we implemented our disaster response program. This had a number of steps. Prior to the lockdown, our disaster management team made sure we had the current contact numbers for all clients, and that these were secure and accessible to staff even when they couldn’t be in the office. We took steps to make reports accessible online. We made sure there was a call-tree, from senior management down to branch managers. We helped set up a daily conference call for the national microfinance association to coordinate communications with and advocacy to the government.


Our ASKI Multipurpose Cooperative through its Convenience Store made sure that it has available basic necessities like rice, breads, and other grocery supplies to ensure the continuous flow of goods for the customers. The cooperative also made physical cash available to beneficiaries of the government conditional cash transfer, social amelioration program and savers through the portable POS. Although risky and with restricted people’s movement, ASKI served as a pay-out branch for those needing physical cash to keep or for their purchasing needs in the midst of the crisis. As of now, where lockdown is implemented, a total of Php 4,114,100 (USD 82,282) were paid out by ASKI to 966 customers.

ASKI also coordinated with local government units for immediate food distribution specifically rice to those who belong to the poorest of the poor in the communities. It also took the lead in donating food items for front-liners like doctors, nurses, police and military who are in the health care system and community check points. Although limited and on selected areas only due to travel restrictions.

We have considerable liquidity challenges, like many microfinance institutions. We have to pay more than 1,000 employees their salaries, not just the 815 permanent staff but also non-permanent workers. The funds for this are coming from our own cash on hand, and all repayments from clients have stopped during this period. We have applied for government programs to subsidise the salaries of staff especially the non-permanent staff, however, there is no assurance yet on the application as of the moment. If the lockdown continues beyond the end of May, we will have significant problems.

We also expect, even though now not all clients are able to withdraw savings as the branches are closed, that about 50% of client savings and the resiliency fund will be withdrawn once clients are able to, which puts further liquidity pressures on the organisation. But we continue to focus on confidence and communication. We’re currently instructing managers to get in touch with clients to make clear that ASKI will be there for them for whatever they need when the lockdown is lifted.

e-MFP: What kind of support has ASKI received from your investors and funders?

RV: ASKI has funding relationships with a broad spectrum of organisations, from local banks to social investors in Europe and development institutions around the world. On the local front, the banks based in the Philippines, which represent a large portion of our funding, have to follow guidelines issued by the Central Bank and comply with the Republic Act 11469 or the Act Declaring the Existence of a National Emergency Arising from the Coronavirus Disease 2019, also known as the “Bayanihan (Filipino term meaning Helping One Another) to Heal as One Act” signed on March 24, 2020. After the lockdown is lifted, we will have to start to restructure loans.

Much of this effort has been taken up by our microfinance association, the Microfinance Council of the Philippines (MCPI), which has sought to negotiate cheaper and longer-term loans from a broad group of local banks, as well as agreeing guidelines for member MFIs to provide repayment moratoria to clients. Moreover, MCPI has been in discussions with the Asian Development Bank (ADB) to receive subsidized loans that may be converted into grants to pay operating expenses. There is no agreement yet on either one of these efforts. MCPI also submitted a request for a subsidized loan to USAID via the MCPI-APPEND programme that has been active in the Philippines for many years.

MCPI has also sought assistance from different government agencies, though there is no final word on these efforts yet. At the same time, ASKI has worked with both Oikocredit and the Grameen Foundation, and we have been in discussions with both since the start of the crisis.

e-MFP: What coordinated efforts are underway in the Philippine sector to address the crisis?

RV: We are in virtually constant communication with the networks we belong to - the Microfinance Council of the Philippines (MCPI) and the Alliance of Philippine Partners in Enterprise Development (APPEND). The network has already agreed to propose to the government institutions a possible funding allocation for the rehabilitation of those affected communities. This will be a low interest rehabilitation loan and with a grace period of three months. The network has agreed to impose a loan payment moratorium for 30 days without penalties to all affected clients. The moratorium can be extended if the community quarantine is also extended as indicated in Republic Act 11469. This will obviously have an impact on the financials of the organisation and the situation will affect the Philippine economy as well since many businesses have been forced to close and will struggle to re-open.

e-MFP: What do you see as ASKI’s priorities once you get out of the lockdown phase of this crisis and try to support clients to get back on their feet?

RV: There are going to be lots of negative impacts on clients and the sector here which we will all have to face. One big factor is the inevitable impact on remittances because of the Philippine diaspora overseas losing income because of lockdowns and economic contractions in their sending countries. We also expect once the lockdown is lifted, there’ll be a large influx of workers back into the country, because of negative opportunities where they’ve been living. They’ll need jobs and support to start a business back home.

Currently, we are exploring how to conduct an online training course since face-to-face training will be affected by the “new normal”. We will also push through the implementation of the digital transactions because the crisis gave us an opportunity to really see the importance of shifting to digitalisation. We have already started the initiative, but it is temporarily affected by the lockdown.

We also need to plan for how to deal with existing loans to clients, who will need loans to recapitalise their businesses as soon as possible. We might have to consider starting again with lower loans (probably under US$500), and in some cases we’ll provide additional funding, but on a case-by-case basis. This will depend on the purpose of the loan and the sector. For example, we really want to be able to support small farmers to ensure food security for our clients, and one option we’re exploring is how to get cheap funding direct to ASKI from the relevant government department to support small farmers. We’re confident that new credit lines will be approved in the first half of May, negotiated via MCPI and through the efforts of ASKI.

In the longer-term, it’s clear that there won’t be any increases in our loan portfolio in 2020, and there will be a need to implement cost-cutting measures too within the organisation. As I said before, we can manage to pay salaries if the lockdown continues until the end of May. Beyond that, there will be liquidity problems, unless we can access new credit lines. Overall, the primary objective at this point is to maintain stability within our portfolio and protect our clients and help get their businesses and livelihoods running again as soon as we can.

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