The Impact of Covid-19 Pandemic on the Financial Institutions in Philippine City

The study was conducted in a Philippine City to determine the impact of the pandemic on financial institutions during the pandemic. The respondents of this study were the employees of a financial institution who worked under administrative office, accounting department, and senior management. The problems encountered by the Financial Institutions were necessary to study as they are the foundation of stable business industry. This study, therefore, delves into the impact of the COVID-19 pandemic on financial institutions particularly Microfinance institutions and Cooperative banks. This paper highlighted financial risks faced by the financial institutions such as the inherent risk of a bank run, credit risk, and liquidity risk. Due to time constraints, the study only emphasized the analysis of the financial risk experienced by the financial institution during these trying times and the researchers will discuss how financial institutions overcome these challenges. Using a quantitative descriptive research design, the researchers utilized survey research in gathering the respondents’ answers using a Likert scale questionnaire. The researchers used the convenience sampling method, with a total of 60 respondents. Before conducting the study, an increase in bad debts, a decrease in credit quality, and a decrease in financing operations are the impacts of the pandemic on financial institutions. It affects their capability to operate and finance operations. However, financial institutions did not experience having not enough funds to support their operation. Likewise, the study identified that the financial institutions develop funding strategies, and support lending operations such as lowering the value of the loan, giving interest discounts, and accommodation to customers to avoid further losses during the pandemic. Thus, it is recommended that employees and financial institutions should serve as the beacons of stability by deferring payments, extending credit limits and payment deadlines to offset further economic effects, and in turn help the financial industry. In addition, customers and clients must communicate with the creditor and discuss their financial and employment situation during the pandemic