Gov’t sees ‘short-term’ impact of novel coronavirus on Philippine tourism

MANILA, Philippines — The impact of the novel coronavirus on Philippine tourism is expected to be short-lived, the government’s chief economist said, but policymakers still flagged the health crisis as a risk to economic growth.

This as health officials on Thursday reported the first case of the SARS-like virus in the Philippines.

More than 170 people have died since the new strain of coronavirus emerged in China's Wuhan, and millions are now under an effective quarantine.

The virus has prompted travel restrictions in China, threatening businesses and economies that rely on the huge numbers of Chinese visitors.

“I think it’s likely to just have a short-term impact [on tourism] because given the measures being done to minimize the [spread of the coronavirus],” Socioeconomic Planning Ernesto Pernia said at a press conference on Thursday evening.

“It shouldn’t take long for that to have an effect on the economy,” Pernia added.

While they expect economic growth this year to settle within the state’s annual target, the country’s economic managers said in a press statement that they remain vigilant against headwinds, and counted “global spread of communicable diseases such as the novel coronavirus” as among the external risks to growth.

Finance Secretary Carlos Dominguez III told the same press conference that it is still too early to make projections on the outbreak’s potential impact on tourism receipts.

ANZ Research said a 75% decline in the number of visitors and tourists from China in three months could shave 0.11 percentage points off of annual Philippine economic growth considering that Chinese nationals account for 20.9% of total foreign arrivals in the country.

As businesses and factories in the mainland close due to internal travel restrictions amid the crisis, a 20% drop in imports from China in three months could slash Philippine economic growth by 0.08%, ANZ Research also said.

“A weaker Q1 (gross domestic product) in the region is a near certainty. The production disruptions in China and the timing of the Lunar New Year this year mean that the drag on January data will be pronounced,” the global bank’s economic research unit said.

“The importance of Chinese tourists in the region, and the linkages of China’s production through supply chain networks in Asia mean the drag on GDP growth will be quite apparent in the upcoming data,” it added. — with a report from BusinessWorld