Gov’t hopeful on hitting 2020 growth target
While first-quarter growth would take a hit from the outbreak of the novel coronavirus (Covid-19), the country’s chief economist sees domestic consumption and public infrastructure spending compensating for an expected slowdown in inbound tourist arrivals.
Socioeconomic Planning Secretary Ernesto Pernia told reporters that if the new virus persisted longer, then it would also weaken global economic growth.
“It will affect exports—our exports to China will be curtailed,” said Pernia, who heads the state planning agency National Economic and Development Authority (Neda).
Pernia noted that the Philippines mostly shipped electronics, the country’s top export commodity, to China.
The latest government data showed that China was the Philippines’ third-biggest export market and top source of imports last year.
The Neda chief had also flagged risks to tourism revenues amid travel bans to and from China to contain the virus’ spread.
Still, Pernia said the Philippines had a “fighting chance” to achieve this year’s higher 6.5-7.5 percent growth target.
“Maybe domestic tourism will pick up, so we’ll kind of compensate for international tourism,” Pernia said, citing that airlines were already giving away discounts to entice travelers to visit local spots.
Pernia said consumer spending was also expected to remain robust even as some consumers might be deterred from going out to avoid coronavirus infection.
According to Pernia, people are now beginning to be less worried, citing fewer people wearing masks compared to before.
The ambitious “Build, Build, Build” infrastructure program would also shield the economy from external shocks, Pernia added.
“There have been many projects taking off the ground. Spending will probably increase because we have already approved 72 of the 100 flagship projects, and there are only about 25 remaining because there are some that don’t need Neda Board approval,” Pernia said.