MANILA, Philippines — Economic growth in the first quarter can be expected to remain at around six percent as the economy remains resilient to headwinds and public sentiment on the novel coronavirus COVID-19 outbreak begins to improve, the National Economic and Development Authority (NEDA) said.
“I think we have a fighting chance,” Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia told reporters. “People are now beginning to be less worried (about the spread of the COVID-19).”
He said despite COVID-19’s initial impact on travel and tourism, Filipinos may soon take to local travel, offsetting the blow to inbound tourism.
“Maybe domestic tourism will pick up, so we’ll kind of compensate for international tourism,” he said. “Airlines are giving discounts so that will entice a lot of travellers.”
He likewise noted that a lot of infrastructure projects under the government’s infrastructure program are now being implemented, boosting government spending.
In a joint inquiry of the committees of tourism and economic affairs of the House of Representatives yesterday, NEDA Undersecretary Rosemarie Edillon said the Philippine economy can be expected to remain resilient despite the spread of nCoV as it is not strongly dependent on tourism and international trade.
She recognized, however, that the travel and tourism industry will take a beating in the current environment, standing to lose P22.7 billion per month including domestic airline receipts.
Travel and tourism – both foreign and domestic – makes up 12.7 percent of the country’s gross domestic product (GDP).
NEDA’s preliminary estimates show that if the coronavirus contagion persists for one month at the current pace, 0.06 percent age point of the GDP will be impacted.
If the contagion extends up to five months from now, 0.3 percentage point of the GDP will be affected.
If the present level of contagion lingers on for 11 months, however, as much as 0.7 percentage point of the country’s economic output will be affected.
These estimates were arrived at assuming a 100 percent reduction on the number of tourists coming from China and a 10 percent reduction on the number of tourists coming from other countries.
The government has already imposed travel restrictions for China, Hong Kong, and Macau.
Another assumption made in coming up with the estimates is that present interventions implemented to curb the spread of the virus and interventions for the economy remain the same.
To encourage domestic travel, Edillon said the government and the industry must exert effort to address fears in travelling.
“I think the approach to this is to manage the fear (of travel). We only have three positive cases so far. It’s also important to have lull for two up to three weeks before we have the domestic tourism promotion,” said Edillon.
Edillon also noted that if the contagion persists six months onwards, several tourism-related industries should brace for greater impact as letting go of some workers may be neccesssary.
In which case, pertinent government agencies should be prepared to provide assistance to those affected.