Maybank sees minimal impact of nCoV on PH economy except on Pogos | Inquirer Business

Maybank sees minimal impact of nCoV on PH economy except on Pogos

By: - Reporter / @bendeveraINQ
/ 04:39 PM January 30, 2020

The Philippine economy will be shielded by robust domestic demand from any global or regional economic impact from the deadly nCoV virus but Philippine Offshore Gaming Operators (Pogo) face downsizing when China keeps its citizens from traveling to prevent the virus’ spread, Malaysian financial giant Maybank said.

Just like the SARS outbreak in 2002-2003, the Philippines and Indonesia “will likely see the least impact, given that they are more domestic-oriented economies and less reliant on tourism receipts,” said Maybank Kim Eng in a Jan. 29 report titled “Wuhan Virus: Anatomy of an Outbreak.”


In the case of the Philippines, tourism receipts accounted for only 2.3 percent of gross domestic product (GDP) or about $7.6 billion in 2018, said the report by Maybank analysts Chua Hak Bin, Lee Ju Ye and Linda Liu.

“Within Asean, we think that Singapore and Thailand will probably be the most affected and will likely see
some growth downgrades,” the report said.


“Malaysia and Vietnam will see a smaller negative impact, while Indonesia and the Philippines will probably be least affected,” it said.

“However, the Philippines may still see some impact given the spillover effects on industries like Pogos, which account for around 10 percent of total office space with employees mostly coming from
China,” the report added.

“A long-term outbound travel ban from China could thwart Pogo expansion plans if they have limited manpower,” it said.

In a separate Jan. 27 report titled “Tension in the air,” Maybank ATR Kim Eng Securities Inc. said China’s travel ban on its citizens due to nCoV “would largely affect the Philippine tourism industry.”

China, the Jan. 27 report said, was the fastest growing source of tourists in the Philippines with a 24 percent annual growth from 2013-2018.

It said Chinese nationals accounted for 22.1 percent of tourists in the Philippines as of end-October 2019. Second are South Koreans.

It said tourism earnings and gross value added contributed 2.3 percent and 12.7 percent to Philippine GDP in 2018.


Maybank said at most risk are companies involved in airport operations, airlines, casinos, property developers and consumer companies.

“Lower tourist arrivals translate into lower hotels and resort occupancy rates,” said the Jan. 27 report.

In the event of a larger outbreak of nCoV, second round effects “could expand to lower foot traffic in public spaces such as malls.”

“Malls comprise 26 percent of total sector revenues,” the report said.

“For now, we see limited direct impact on the consumer names under our coverage as their dependence on Chinese tourist arrivals remains small,” it said.

“In our view, consumer names are more exposed to second-round effects—if the outbreak prolongs,” it added.

Edited by TSB

For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link .

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: casinos, coronavirus, economy, POGOs, Tourism, Virus
For feedback, complaints, or inquiries, contact us.

Curated business news

By providing an email address. I agree to the Terms of Use and
acknowledge that I have read the Privacy Policy.

© Copyright 1997-2022 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.