MANILA, Philippines – The one-month community quarantine of Metro Manila—the country’s economic and financial hub – to contain the spread of 2019 coronavirus disease (COVID-19) would only have a short-term impact on the economy, Socioeconomic Planning Secretary Ernesto M. Pernia said Friday.
Pernia, who heads the state planning agency National Economic and Development Authority (Neda), said movement of goods and trade will be unhindered despite the quarantine.
As such, the situation will have an “ephemeral hit on the economy at most,” Pernia told the Inquirer.
Prior to the Metro Manila “community quarantine”, Neda had estimated a potential reduction in gross value added (GVA), mainly in the trade and tourism sectors, by P93-187 billion, equivalent to 0.4-0.9 percent of Gross Domestic Product, which may lead to a 0.5-1 percentage point (ppt) cut in GDP growth this year if the COVID-19 threat extends to June.
Hence, this year’s GDP growth may settle between 5.5 percent and 6.5 percent.
The government targets a faster 6.5-7.5 percent GDP growth rate this year after economic expansion last year fell to an eight-year low of 5.9 percent mainly due to late budget approval.
Likewise, Neda estimates showed possible job losses of 30,000 – 60,000 in the tourism sector alone as the COVID-19 situation adversely affected global travel.
Pernia told reporters after last Tuesday’s Economic Development Cluster (EDC) meeting that the impact of last year’s delayed budget episode could be worse than the economic fallout from COVID-19.
GSG