The Philippine economy could lose between $669 million and $1.94 billion as well as lose 87,000 to 252,000 jobs across five sectors due to the COVID-19 outbreak, the Asian Development Bank (ADB) said Friday.
In a report titled “The Economic Impact of the COVID-19 Outbreak on Developing Asia,” the ADB said that among its member-countries, expected to be “significantly affected” by the disease’s economic fallout 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 gross domestic product (GDP) in 2018.
Last year, China was the Philippines’ top trade partner—the biggest source of imports and the third-largest export destination.
“Many of these economies see a significant share of tourists from China and are affected through that channel as well. 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 the 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 $1.16 billion or 0.352 percent of the economy.
As for the “worse-case” scenario where outbound travel from China declines by 50 percent for six months, the Philippines could lose as much as $2.25 billion or 0.681 percent of GDP.
COVID-19’s overall impact on the Philippine economy on a moderate-case scenario—“where precautionary behaviors and restrictions such as travel bans start easing three months after the outbreak intensified and restrictions were imposed in late January”—was estimated by the ADB at 0.3 percent of GDP.
The total impact of COVID-19 on 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/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 in 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.