By APD writer Melo M. Acuña
MANILA – The ongoing fear of the 2019-nCOV Acute Respiratory Disease (ARD) now known as Novel Coronavirus Pneumonia would affect the tourism industry in the Philippines and may cause a .1 to .4 percent of Gross Domestic Product (GDP).
This was how House Ways and Means Committee Chair and Albay Congressman Jose Sarte Salceda looks at the impact of the coronavirus into the country’s economy.
“You must take into account 25% of foreign tourists come from China and in terms of trade, 90% of our imports from China is basically non-food which could easily be disinfected while the remaining 10% could be replaced from other sources,” he said in an exclusive interview.
He explained as far as remittances are concerned, there may be a dip of 3.1% from Filipinos working in China, Hong Kong and Macau.
The overall impact may range from .1 to .4 percent of the country’s Gross Domestic Product and would amount to P36 billion gross value added from revenue less cost of goods.
Congressman Salceda said the government could mitigate the impact through the aggressive promotion of domestic tourism and holiday economics and increase spending on the “Build, Build, Build” program and address aggregate demand locally because the global demand will be affected due to restrictions on the flow of trade, services and people.
“We can offset the impact domestically through monetary policy 175 basis points in 2018 and we have just utilized 75 by BSP Governor Benjamin Diokno so we have room to offset weakness in aggregate demand to the easing of policy rates,” he added.
The situation could pave the way for the construction of more health facilities as expenses could be easily justified. He cited the case of the 250-bed Bicol Regional Teaching and Training Hospital in Legazpi City which is utilized by 300% serving 650-700 patients a day.
Congressman Salceda said the public hysteria should be addressed as it is more costly than NCP’s impact as it seeps into business confidence.
The country’s economy could range from 6 to 6.5% if the government does nothing.
“Eighty percent of the impact is recoverable through policy action,” Salceda concluded.
Meanwhile, private think-tank IBON Foundation’s Executive Director Sonny Africa said Tourism will be affected because as of 2018, from 7.1 million tourist arrivals, 1.26 million came from China, second only to South Korea’s 1.58 million.
“The Chinese arrivals will certainly fall,” he said. He added it is also likely that tourist arrivals from other countries will fall especially with reports of the first deaths outside of China being in the Philippines. He believes this will affect what might have been potential tourists to China who could have been diverted to the Philippines instead.
“Tourism-related spending accounts for about 10% of GDP. This will be greatly affected by reduced tourism from China but also from other tourists likely avoiding Asia at least in the first semester of 2020 or longer,” he explained.
Mr. Africa said one-fifth or 21.9% of tourism spending goes to transport services especially air travel but also water/land transport, another 1/5 or 21.3% to restaurants and other food and beverage services, ¼ or 19.9% to entertainment and recreation and 14.5% to accommodation and the rest is for retail/shopping and travel-related services.
(ASIA PACIFIC DAILY)