The Philippine economy could shed between $669 million and $1.939 billion and erase between 87,000 and 252,000 jobs across five sectors due to the coronavirus (COVID-19) outbreak, according to the Asian Development Bank (ADB) on Friday.
In a report titled “The Economic Impact of the COVID-19 Outbreak on Developing Asia,” the ADB said among its member-countries, the ones which were likely to be “significantly affected” by the disease’s economic impact included those with “strong trade and production linkages with China.”
“Developing Asian economies such as Hong Kong, Mongolia, the Philippines, Singapore, Taiwan and Vietnam will be materially affected by the COVID-19 outbreak,” the ADB said.
ADB calculations showed that the Philippines’ value chain had an exposure to China equivalent to 2 percent of the Philippines’ gross domestic product (GDP) in 2018.
In 2019, China was the Philippines’ top trade partner—the biggest source of imports and third-largest export destination.
“Many of these economies see a significant share of tourists from China and are affected through that channel as well,” the ADB said.
“China is also a major destination for these economies’ final as well as intermediate goods and services,” the ADB added.
Citing World Tourism Organization data, the ADB noted that 18 percent of foreign tourists who visited the Philippines in 2018 were Chinese.
Based on ADB staff estimates, in the best-case scenario where outbound tourism from China declines by half for two months, the Philippines would lose $801.4 million in tourism revenues or 0.242 percent of GDP.
In a moderate case wherein the number of outbound Chinese tourists drops by 50 percent for three months, the Philippines’ tourism receipts will be reduced by $1.164 billion or 0.352 percent of the economy.
The worst-case scenario would be outbound travel by Chinese declining by 50 percent for six months, costing the Philippines as much as $2.254 billion or 0.681 percent of GDP.
Overall impact of COVID-19 on the Philippine economy in a moderate-case scenario was estimated by ADB at 0.3 percent of GDP. This scenario was premised on “precautionary behaviors and restrictions, such as travel bans, easing three months after the outbreak intensified.”
The total impact of COVID-19 on Philippine GDP and employment was also measured by the ADB across the following five sectors: agriculture, mining and quarrying; business, trade, personal and public services; light or heavy manufacturing, utilities and construction; hotel, restaurants and other personal services; and transport services.
Using the Philippines’ 2018 GDP of $330.91 billion as basis, the best-case scenario could result into a $669-million loss to the economy: $41 million in agriculture; $158 million in trade; $115 million in manufacturing; $206 million in tourism and $150 million in transport.
Employment loss under the best-case scenario would be 87,000.
Under a moderate impact scenario, 129,000 jobs could be shed and economic loss could reach $990 million—$62 million in agriculture, $236 million in trade, $174 million in manufacturing, $302 million in tourism and $216 million in transport.
A worst-case scenario would lead to a $1.939-billion reduction in GDP—$118 million in agriculture, $465 million in trade, $350 million in manufacturing, $592 million in tourism and $414 million in transport.
A total of 252,000 jobs could be erased in a worst-case scenario.
The ADB also estimated a “hypothetical worst-case” scenario wherein “a significant outbreak occurs”—in which the Philippines may shed 730,000 jobs plus $5.519 billion in economic value: $543 million in agriculture, $2.436 billion in trade, $1.187 billion in manufacturing, $767 million in tourism and $586 million in transport.