2022, Volume 30, Paper 5
ISSN: 1883-5675

Policy responses of the COVID-19 pandemic in the Philippines: Impacts on the profitability of the agri-food supply chain1

Glory Dee A. Romo – School of Management, University of the Philippines Mindanao, Davao City, Philippines
Jon Marx P. Sarmiento – School of Management, University of the Philippines Mindanao, Davao City, Philippines
Francis Levi A. Durano – School of Management, University of the Philippines Mindanao, Davao City, Philippines
Geraliza D. Wahing – School of Management, University of the Philippines Mindanao, Davao City, Philippines
Adonis M. Traje – School of Management, University of the Philippines Mindanao, Davao City, Philippines
Ian Patrick – UNE Centre for Agribusiness, University of New England, Armidale, Australia
Derek Baker – UNE Centre for Agribusiness, University of New England, Armidale, Australia

Abstract

The Philippines experienced many challenges brought about by the COVID-19 pandemic. In 2020, the country experienced a decline in economic growth. The agri-food sector’s micro, small and medium enterprises (MSME) are amongst the country’s most vulnerable. This study analyses the various policy constraints and enablers related to food manufacturing as well as the distribution in the agri-food supply chain. This study applied a mixed methods approach. Interviews with 30 agri-food enterprise owners and key officers were conducted and concept mapping was applied using Leximancer software. Key themes emerged including introduction of new products, increased online selling activity, limited supply of inputs and packaging materials, increased cost of production and delivery, and availability of government assistance. A subsequent survey (n=125) for the food manufacturers, logistics operators, traders, wholesalers, and retailers was also implemented. The effect of policy measures on enterprises’ profitability was assessed using ordered probit regression. The results suggest that the likelihood of reporting profitability after the pandemic increases when the owner or key officer is male, the business is operating under a partnership, enterprises suspended their operations at some point during the pandemic, enterprises implemented health and safety protocols for their employees, there is no oversupply of employees during the lockdown period, and enterprises increased operation work hours during lockdown. The study also highlighted that manufacturing and distribution of food during the pandemic should be unhampered. However, MSMEs in the agri-food chain experienced delays and increases in prices of raw materials despite clear policy guidelines. Inter-regional trade was affected due to varying localised policies on health protocols and lockdowns. These policy constraints generally affected the profitability of the enterprises.

Keywords: Agri-food supply chain, COVID-19, food manufacturing, mixed methods, profitability

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