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In the heart of Makati City, Metro Manila, the once-busy nightlife hub Poblacion is quiet. The past year has taken its toll: over the past months, businesses that lined their streets closed their doors. Some have reopened (through an admirable, sheer force of will) but Poblacion’s usual haunts remain haunted, and not in a fun way.
Some might say it’s the same Poblacion, sans the chaos. But the chaos, the old mix of grit and homeliness that served it so well over the years, was the heart of Poblacion.
One of the sunk costs of this pandemic is the value of a night out, and Marco Viray knows this well. His bar, NoKal, closed down during the pandemic; another venture down the drain. Like many Filipinos, Marco feels like he’s lost a part of his identity. The pandemic stole from many a steady job, a career, even a lifelong dream. For Marco, who saw his fortunes reverse overnight, pandemic fallout was all too real. Before going home to the Philippines in 2015, he carved out a relatively successful career as a sales director in the United States. Marco thought setting up shop in Poblacion was a no-brainer; his family has called it home since the 1950s.
It’s easy to dismiss Poblacion—for one, it’s notorious as a red-light district, a throwback to its colorful past. But Poblacion is also a neighborhood that knows reinvention; a place of constant change. Food and beer were what gentrified the neighborhood in 2013, welcoming anyone who wanted a break from Makati City’s frenzied work culture.
Over the past decade, starry-eyed entrepreneurs brought money and shaped Poblacion into what it is now: a nighttime destination for anyone looking to escape the concrete jungle. It was a one-stop shop for Friday night madness; a cup of coffee followed by a rooftop rager, a nightcap to end the saturnalia.
But times have changed. Liquor bans and curfews now take effect at the snap of a finger. In Makati City, officials even prescribed businesses a drink count—the number of alcoholic beverages they could sell—and required them to sell food, as well. Under the Covid-19 pandemic’s quiet oppression, Poblacion’s existential crisis took root.
It is tough to run a business in the Philippines under these circumstances: closures, disappearing profit margins, and expenses follow small businesses that have little protection. In Poblacion, running a small business meant racing against time.
Poblacion’s fiefdoms are micro, small, and medium-sized enterprises (MSMEs). These MSMEs are the lifeblood of the Philippine economy, whose survival hinges on consumer spending. Capitalization for these enterprises can swing from Php 5,000 lows to Php 100 million highs; by the trade department’s reckoning, 99 percent of businesses in the Philippines were of this nature in 2019.
For entrepreneurs with capital and credit brave enough to deal with the red tape in government, some measure of glory awaits. A startup—whether a restaurant, a bar, or a café—materializes and starts the process of carving cultural capital.
In a bid to save MSMEs, the Philippine government released a Php 10 billion stimulus package for entrepreneurs, meant to give them some interest-free wiggle room. After all, MSMEs power 35.7 percent of the economy, employing more than half of the country's labor force.
A laundry list of problems awaited them: few to no customers, curfews, meeting rent, intractable landlords, mounting expenses, lockdown, liquor bans, and clamped cars. It also didn’t help that Poblacion has one of the highest rents in the city.
And this is all because Makati has a reputation to maintain: it almost always ends the year as one of the wealthiest cities in the country.
Take for example, 2018: a year building up into what insiders believe to be the height of Poblacion’s powers. By then, Makati City taxed Php 9.1 billion from businesses, while it brought in Php 6.2 billion in property taxes.
Broken down, Poblacion’s finances in the same period revealed it raked in Php 4.87 million revenues in service and business income, which include paying for permits and fees to keep business above board. This type of government revenue, which rises and falls depending on economic activity, benefitted from the neighborhood’s growing fame.
Poblacion was a one-stop shop for Friday night madness; a cup of coffee followed by a rooftop rager, a nightcap to end the saturnalia.
Come 2019, rent hit at a premium, and Marco notes that there’s been a 20 percent increase since. “Tumaas rent nung kasikatan ng Poblacion, yung ibang landowners tiba-tiba talaga,” he says.
This comes as no surprise: Poblacion is a rental goldmine. Besides its various restaurants and bars, it’s also home to Rockwell Center and Century City Mall. A few kilometers away is Makati’s business district, a financial hub which employs many of Poblacion’s clientele.
Since Makati is the center of all things money, Poblacion’s location was the place to be. It attracted chutzpah, stringing along hardworking youngsters and middle-aged owls out for some culture. These days, cycling around Poblacion late afternoon leaves you wondering where the day drinkers went.
In the context of this health crisis, replacing renters is a tricky business for landlords. This means finding people to take on a contract, a process that could take months. The lease is a sore point because it’s difficult to find new tenants these days.
And yet, some landlords still insist on keeping rent, baffling entrepreneurs in Poblacion. Rae Lim Pineda, managing partner of the now-defunct creative space Dulo, said the situation deserved a second peek.
“They could come to an understanding and not force tenants out. If the business leaves, no one is jumping up and down to rent the space; no one is moving around and paying exacting the price that they’re asking,” Rae says. “It’s either they’re forced to lower the rent or be left empty.”
On the other side of the fence, some ventures like Commune benefitted from kind landlords. Operations Manager Iñigo Alvero says they were lucky. “Our landlord offered to help us; we were given a 50 percent discount. That’s the only reason we earned profits this year,” he says.
This is because rent ends up costing business owners—especially those renting on location—half of their operating expenses. Take for instance Marco’s businesses, resto-bars, and breweries. Before 2020, they were raking in Php 1 million each week. “Safe to say [these days] we’re hitting 20 percent of our usual sales, which also took a while to build up,” says Marco.
To succeed in a country where bureaucracy and corruption are king is a testament to mettle. If anything, the pandemic is an ongoing litmus test for the fragility of businesses in the Philippines. Making rent is the first in a long list of problems, and it won’t be the last.
Pivoting became a sort of codeword in these interviews, the light at the end of the tunnel for Poblacion’s leaders.
For entrepreneurs, this is a rite of passage—it spells out their odds of survival. Where can they afford to change? They look to their business model, end product, or customer service.
Iñigo homed in online orders. Rae set up a new venture. Marco says he’s spent up to a quarter of a million pesos on new chairs and acrylic dividers, just to keep his businesses on the right side of the law. His pivot also meant turning to food deliveries, a common strategy as Metro Manila went into lockdown since March last year.
“Things that we did other than making sure everyone was safe was really to setup yung online shop. It was in the plans na rin na online. Pero never lang namin na-asikaso since happy naman na kami,” says Inigo. Commune circumvented usual delivery platforms, preferring to employ staff for deliveries. Still, it hasn’t completely canceled out the loss of revenue from live events, which had been a big portion of their income.
Meanwhile for Rae, pivoting meant re-analyzing the market and studying new habits. After Dulo closed in August 2020, she's had to recalibrate her steps.
Her latest business venture (which she’s keeping under wraps) is her pivotal act—and as with Dulo, she doesn't mind taking her time. She's also fortunate enough to have the support of experienced entrepreneurs: friends with a deep understanding of the Philippine market, and even deeper pockets, who can help bring her new vision to life.
Still, not everyone is as lucky; other entrepreneurs have had to bid farewell to ideas, ventures, establishments, and ‘essential businesses’ after long months of burning through their savings and testing their sanity.
The chaos, the old mix of grit and homeliness that served it so well over the years, was the heart of Poblacion.
There were those who counted on the government for support, but government policies made it very difficult for businesses to survive.
Take the case of checkpoints: Police draped in camo decorate the open roads, stopping to check motor vehicles for who knows what. A businessperson understands that this slows down the domestic supply chain, a necessity for the movement of consumer goods. Checkpoints meant that businesses in pandemic-era Philippines had to contend with another layer of the bureaucracy. In 2020, the ensuing lockdown left countless Filipino workers on their own, to find makeshift ways to get to their “essential” work as public mobility ground to a halt.
But the national government’s gravest sin against business was the absurdly slow vaccine procurement. Scientific evidence made clear that the quickest way out of the pandemic is vaccinating the public. In July 2020, when news of vaccines in development made headlines, the administration shrugged; then asked private businesses to donate half of their vaccine purchases in solidarity.
If and when the pandemic ceases to exist, these entrepreneurs can call themselves survivors—behind closed doors, local business owners have been strategizing like never before; fighting tooth and nail to keep going.
To protect themselves, entrepreneurs from Poblacion pulled together in a 133-strong WhatsApp group; they even wanted to register as a corporation at the Securities and Exchange Commission, a process that could take months but could also end up shoring valuable government support for them once the pandemic blows over.
“Because of the pandemic, we’re all pushed to be our best selves,” Rae says.
Make no mistake: its determination and sense of community is why some businesses (like Commune) have survived. And yet, despite the efforts, some fall short. But who can blame them?
“I think part of what makes Poblacion what it is, is yung character and yung grit niya,” Inigo says. “Nandyan yung kakapit pa rin, magsusurvive pa rin.”