How Metro Manila’s COVID-19 community quarantine is affecting the local startup community

The Philippines has become the latest country to join in the lockdown caused by COVID-19 outbreak alongside China and Italy; both are currently among the top five countries with the highest numbers of affected patients detected. South China Morning Post reported that starting on Sunday, March 15 to April 14, Metro Manila will be on a “lockdown” with travel ban.

In a statement, Duterte also said that he might call on China to help with the outbreak as President Xi Jinping had offered help through a letter. The issuance followed Duterte’s meeting with Huang Xilian, China’s ambassador to the Philippines, on Wednesday night discussing the countries’ economic cooperation as well as the challenges caused by the novel coronavirus.

The decision is also supported by experts in the matter such as Dr Anthony Leachon, who is a health reform advocate and former president of the Philippine College of Physicians, who called the lockdown “necessary”. Leachon said that the only way to contain the virus was a lockdown of Metro Manila and its 12.8 million people.

The current situation

So far, the Philippines has 52 confirmed cases and has reported five deaths from the virus. Most of the government officials are of the vulnerable age group (including the President) and had recently been in the same room with a person who is tested positive. This is why most cabinet members have undergone tests and some even decided to undergo self-quarantine for precautionary measures.

The Philippines has a population of more than 100 million, but currently had only 2,000 novel coronavirus test kits available, as assistant health secretary Maria Rosario Vergeire said. Earlier this week, persons could only be tested if they had travelled to a place with a local outbreak or if they had come physically close to an infected person.

The health department said 2,000 more test kits from the WHO would arrive this week. The Philippine Food and Drug Administration on Wednesday approved a test kit developed by the Philippine Genome Centre at the University of the Philippines, which can be made more cheaply and provide results faster than imported kits.

Also Read: Finding solace in Stoicism as coronavirus looms over the economy

Despite the media calling it a lockdown, Cristian Jon Rillera, CEO of Gasmee, corrected the addressing of the situation, saying that the fitting term would be community quarantine within Metro Manila.

How it is affecting the startup community

e27 gathered responses from the startup community in the Philippines and how the government’s decision would affect their operation. The responses have been varied; each one depends entirely on the type of the business and how each runs the day-to-day operation.

For e-commerce, Steve Sy of Great Deal e-commerce Corporation weighed in on the situation. “E-commerce would spearhead the movement of goods for the Filipino people in this time of crisis. We will be in the forefront to deliver essential goods to the people.”

Furthermore, Sy remains positive that this crisis can “produce champions”.

“We need to persevere and we will all bounce back. But to raise funds at such time would be a vulture move from VCs and PEs,” Sy continued.

Another startup that is relatively new in the field, Apex Digital Marketing, has said that the situation is hard on their business, especially having to move the work setting to work from home.

“As a young startup, we really prefer that our employees show up at the office as communication is so much easier when the team is together. But prioritising our employee’s health, we transition to work from home setup after two years of being in operations,” said Edward Solicito, CEO of Apex Digital Marketing Inc.

Solicito added that such force majeure taught the startup that they need to be on top of any situation, especially as managers. “It can be as simple as losing a client or a pandemic. It will affect the team’s productivity and their morale. But if we pull this off, it opens up endless possibilities on how we can scale up our business,” Solicito explained.

Also Read: Coronavirus is driving the world into an economic slump. How to cope up?

However, looking at the bigger picture, Solicito said that the pandemic can be the unexpected cause of closing down of many niched startups, which he believes to be the majority of startups in Metro Manila.

“If you are not a startup that covers the essentials, or a startup that does not have excess capital, it will be tough,” he said.

Pros and cons

Gasmee, an on-demand refueling service, admitted that there are two sides of the situation and both affect the startup. Cristian Jon Rillera, CEO of Gasmee, explained that as an on-demand service, Gasmee’s customers are still able to utilise service even if they are not going anywhere.

The restriction of travel, however, has worked against the startup because it means it has limited people that can be utilised in its service.

As for HR tech field, GrabJobs’ Managing Director Valentin Berard said that the slowdown in hiring and recruitment needs for such industries is to be expected.

In the case of GrabJobs, a SaaS recruitment platform powered by interview chatbots, its mission has always been to help recruiters and job seekers connect smoothly with the help of technology.

“We feel this is even more relevant in this climate of crisis,” Berard said.

How the startups plan to continue

Most of the startups have taken precautionary measures such as temperature scanners, continuous cleaning of our facilities, social distancing as well as encouraging digital-enabled meetings. They also include their team in the decision-making, such as Solicito of Apex Digital Marketing, who asked employees to give suggestions on how they will best implement the work-from-home setup.

As for Gasmee, the precautionary measure that the company take should not compromise the business by “enhancing the technology that it has developed”.

“We need to think about ideas that can utilise our resources, not just the person who can deliver our fuel but also the safety process and other internal processes that we need to enhance,” CEO of Gasmee Rillera, explained.

Venture Capital’s woes

For Venture Capitals, the stakes are higher.

“The business of venture capital is built on relationships and so any situation that restricts our ability to meet others face-to-face and to travel affects our business,” said Bit Santos, Portfolio Operations Director of Kickstart Ventures, Inc.

Santos further breaks down the process of taking pitches and doing diligence in a VC’s daily operation.

“The community quarantine has been heavily impacted as meeting and getting to know the people and teams behind the startups that we meet with are key parts of the process,” he said.

Also Read: Blessing in disguise: How coronavirus is helping China’s tech sector

“We do a lot of business development in support of our portfolio companies, and we’re also facing many challenges to continue conversations with potential partners and customers as they themselves are having to figure out how to continue their operations while keeping their people and partners safe,” Santos added.

Santos admitted that the VC suffered lost opportunities due to cancelled and postponed events, originally scheduled for the first half of the year, as there was also uncertainty about how the COVID-19 situation will unfold beyond the next few months.

For safety measures, VC’s approach is similar to the startups’, with moving all the company’s communications digital. But in the case of Kickstart Ventures, they are also responsible for supporting their portfolio companies.

“We’ll be working closely with our portfolio companies to ensure that they have the necessary support to continue their operations. We’ve been able to extend connectivity support to our portfolio companies so that they can ensure business continuity with alternative work arrangements for their people,” Santos explained.

CEO of Talino Venture Labs, Winston Damarillo, approaches the situation by making sure the VC has instituted business continuity plans within each of its startups and teams.

“We now have a ‘buddy’ system in place to ensure that deliverables do not fall through the cracks, in case someone from the team falls ill. This buddy system also allows us to check up on each other and make sure that nobody gets left behind as we continue to operate remotely,” Damarillo explained.

Taking things to the next level, the VC has already started building a studio to deliver digitised services to partners and clients.

Damarillo also said that the VC learned the importance of being prepared.

“In times like this, having internal systems and tools from Day 1 of any operations is crucial. There’s also a need to create tighter digital collaboration with partners and clients. Being prepared helps ensure that our systems, tools, policies, and culture will be able to support such conditions,” Damarillo added.

Also Read: Finding solace in Stoicism as coronavirus looms over the economy

The takeaways
To have optimism in such distressing time is not foolish, but rather a sign of strength. That was the sentiment most of the Filipino tech communities have shared with us.

“COVID-19 crisis presents opportunities for startups–and many other companies–to seriously think about how they will continue to operate, create products and services, and reach out to their customers digitally, but without losing the human connection. We see opportunities in e-commerce, AI and automation, fintech, logistics, healthcare, foodtech. We just need to reframe ourselves and look beyond COVID-19 and ask ourselves:

“What is the COVID-19 situation teaching us about the future of work?” said Damarillo.

Santos added, “The global economy undoubtedly will slow down and it will affect all businesses, whether established or new, traditional or startup. It may affect some startups harder than others, depending on the nature of its business, its geography and market, and many other factors.”

Also Read: Keep calm and remain communicative: Startup founders share how they cope with coronavirus crisis

“If anything, the COVID-19 crisis has increased the need for everyone to review and reconsider how we live, how we work, and how we conduct business. We’ll all have to make changes and with these new needs may be the kinds of opportunities that startups are well-positioned to address.”

Anisa Menur Maulani, Lyra Reyes, Nina Palad, Sainul Abudheen K., and Shagun Karki contributed to this story.

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