Neda chief: Coronavirus impact could shed less than 1 percent off PH economy

The impact of a prolonged outbreak of the deadly novel coronavirus (nCoV) could be felt most by the Philippine tourism sector and shave less than 1 percent off the country’s gross domestic product (GDP), the country’s chief economist said on Friday (Feb. 7).

Socioeconomic Planning Secretary Ernesto M. Pernia noted that global travel and tourism—worth $8 trillion or 10 percent of global GDP—were already taking a big hit from the onslaught of nCoV.

In the case of the Philippines, tourism accounted for about P450 billion or around 5 percent of the country’s GDP of about P19 trillion.

China was the Philippines’ second-biggest source of inbound tourists last year.

Citing preliminary estimates of the state planning agency National Economic and Development Authority (Neda), Pernia said if the nCoV outbreak lasted for one month it could cut 0.06 percent from the Philippines’ GDP. This was on the assumption that no Chinese tourists would arrive as a result of travel bans on China and an estimated 10 percent decline in number of visitors from foreign countries other than China.

If the outbreak extended until June at its “steady state” or similar to current conditions, the reduction in GDP will climb to 0.3 percent, added Pernia, who heads Neda.

But if the infection lasted until December, 0.7 percent of the Philippines’ GDP will be shaved off.

“If the situation escalates, we can have a different number,” Pernia said.

But Pernia said he was optimistic that domestic travellers would still continue to visit local destinations and offset forgone revenues from foreign visitors.

Science and Technology Secretary Fortunato T. dela Peña said that while his department was already supporting research to find a cure for dengue and leptospirosis, it cannot be done for nCoV at the moment because the virus was newly discovered.

“If you will start only now the clinical trials, it will not really be timely for this particular occurrence—it will be long-term,” said Dela Pena.

“And besides, it will be very difficult to find the afflicted persons for whom we will conduct the clinical trials,” he said.

Dela Peña nonetheless disclosed that the DOST was “trying to explore the possibility of building on what some are claiming as health supplements because it may help, but not yet as drugs.”

He cited a claim made by Dr. Dayrit of Ateneo that VCO, or virgin coconut oil, could help. “It is something we should look at,” Dela Pena said.

In a statement, the Manila-based multilateral lender Asian Development Bank (ADB) said on Friday that it had approved the release of $2 billion to help China, Cambodia, Laos, Myanmar, Thailand and Vietnam to address the nCoV outbreak.

“The funds will supplement an ongoing regional technical assistance and strengthen response capacity” in the six countries, the ADB said.

The funds, the lending institution said, would help develop recommendations for improved investigation and surveillance and stronger health systems.

“It will support the supply of diagnostic and laboratory equipment for rapid testing,” ADB added.

“The ADB has a track record of providing rapid and targeted support to our members in emergency situations,” it added.

“We stand ready to provide further assistance as required,” said the new ADB president, Masatsugu Asagawa.

The ADB said it was “collaborating closely with World Health Organization officials and other regional experts” for coordinated responses and further financing aid to stop the spread of nCoV.

More technical help “is under preparation to help other developing member countries improve key economic and health systems, including disease surveillance.”

The added technical assistance would also help in providing medical supplies, prepare outbreak response plans and forge regional cooperation.

“Where needed, support may include the procurement of medicines and medical equipment,” said the ADB.

“The ADB’s economists are looking at the impact that the virus could have on the region’s economies,” it added.

Edited by TSB