THE SPREAD of the novel coronavirus (2019-nCoV) is estimated to hurt the economic growth by 0.3% if the outbreak stays longer or until June largely due to impact on tourism sector, according to preliminary estimates by the National Economic and Development Authority (NEDA).
In a press conference on Friday, NEDA Secretary Ernesto M. Pernia said the economic impact could further rise to as much as 0.7% of gross domestic product (GDP) if the virus lingers until December.
Mr. Pernia said the estimates were based on a scenario where inbound Chinese tourists will be cut by 100% and foreign tourists coming in will be reduced by 10% from the baseline during the given period, but are still subject to change depending on the gravity of situation.
But if the outbreak will only be felt for one month, the impact on GDP will only be at 0.06%.
“[The estimates were done considering that the outbreak] will be steady state of where we are now because once it escalates and it becomes very serious then we will have different numbers,” he said.
Tourist arrivals from China stood at 1.71 million from January to November last year, accounting for 22.9% of the overall tourist arrivals in the country during the period, based on data from the Philippine Statistics Authority.
According to Mr. Pernia, inbound tourism income or expenditure by travellers and tourists accounted for around five percent of the country’s P19-trillion economy.
However, he said the impact could be mitigated through increased domestic tourism given that local travels accounts for more than half of the total tourism sector, which accounts for 12.7% of GDP.
“Domestic tourism is greater actually. Because if you combine inbound tourism with domestic tourism, the percentage in GDP is about 12.7%… More than half of travel and tourism is domestic compared with international, inbound. So we might be able to make up for.. what we lose from inbound tourism…in terms of domestic tourism if Filipinos decided to travel internally na lng instead of going abroad,” Mr. Pernia told reporters during the briefing.
Meanwhile on the trade side, Trade Secretary Ramon M. Lopez said the impact to the economy will be “minimal” since the country’s trading activities with Hubei, China, where the first case of the virus was detected and is currently on total lockdown, only accounts for roughly one percent of the total trade of the country to China.
“Obviously if you cannot get your supplies from Hubei or Wuhan, we look at alternative sources so our operations here will not be affected…[and] further minimize the impact… [Also], it may (result in) more trade with other countries kung saan ‘yung (where we get our) alternative source,” Mr. Lopez said in the same forum.
In a separate text message to reporters, Mr. Lopez said Philippine trade with Hubei province accounts for less than one percent of the value of the country’s total trade with China.
Mr. Lopez said exports to Hubei comprise just 0.5% of the Philippines’ shipments to China. Imports from the province are at around 1.2% of the total from the country.
Total trade with Hubei is just at 0.9% of the Philippines’ trade with China.
“Assuming companies sourcing from affected areas in China may find temporary alternative sources so as not to disrupt their supply chain. So this would further minimize impact on trade,” Mr. Lopez said.
He said trade with China comprises 20% of the country’s transactions.
Based on data from the Philippine Statistics Authority, exports to China in the first 11 months of 2019 cornered 13.6% of total outbound shipments. Imports from China in the same period were just at 22.7% of total inbound shipments.
Mr. Lopez said the main impact of the coronavirus will be on tourism.
“But it can mean the lowering of hotel and plane rates to encourage more domestic tourism,” he said.
On Thursday, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said their estimates showed that the outbreak could dent the economic growth in the first half by an average of 0.3% — 0.1% for the first quarter and by 0.4% in the second quarter.
Mr. Pernia on Friday reiterated that the country could also save on foreign exchange due to limited international travels and spending.
Finance Secretary Carlos G. Dominguez III had said they are keeping this year’s growth target of 6.5-7.5% despite the coronavirus outbreak and Taal Volcano’s eruption last month.
According to the January issue of the Market Call by University of Asia and the Pacific and the First Metro Investment Corp., the economy could recover this year and grow by 6.2-6.6% from the slower-than-expected 5.9% full-year expansion in 2019.
“The faster pace will likely spill over to the entire 2020 with similar drivers as in Q4-2019-NG operational and capital spending as well as solid consumer spending given the robust job gains in in the last three quarters of 2019,” the report sent to journalists yesterday said.
“However, a much stronger eruption of Taal volcano and prolonged spread of the N-corona virus could slow the economy slightly, but negative investor sentiment from it may delay PSEi’s (Philippine Stock Exchange Composite index) recovery,” it added.
On Friday, the Department of Health reported the death of another of the more than 200 people under investigation (PUI) for the 2019 novel coronavirus due to another underlying illness.
In a briefing, Health Undersecretary Rolando Enrique C. Domingo said there were 215 PUIs as of Friday, Feb. 7.
“The cumulative total of PUIs reported is 215. Of the PUIs, 184 are currently admitted and isolated, nine have refused admission, 17 have been discharged under strict monitoring, while two have died of other causes,” he said.
He added that a PUI died on Thursday, saying: “The second PUI death which was confirmed yesterday is a case of pneumonia in a patient with underlying restrictive lung disease.”
The first reported death among PUIs was Chinese man who died from pneumonia but tested negative of the virus over a week ago.
But also included in the PUIs are the three Chinese nationals who were already declared positive of the virus. The first case is a 38-year-old woman who is in stable condition but is still confined in the hospital, while the second case is a Chinese man who died. The third case is another Chinese woman who has been discharged and has flown back to China.
Globally there are over 31,000 cases of the 2019 nCoV, most of which are in China. The death toll has reached up to 630. — Beatrice M. Laforga with inputs from J.P. Ibañez and G.M. Cortez