Pernia: nCoV to have measly impact on Philippine GDP

The threat of the 2019-novel coronavirus-acute respiratory disease is seen to cause a slight dent on the Philippines’s economic output this year, the country’s chief economist economist said Friday.

Citing preliminary estimates of the National Economic and Development Authority (NEDA), Socioeconomic Planning Secretary Ernesto Pernia said if the nCoV threat persists for the entire year it would slash less than a percentage point in the county’s gross domestic product (GDP).

“If the coronavirus lasts for one month, the effect will be 0.06% of the GDP,” Pernia said.

“If it is up to June, it will be around 0.3% and if stays up to December, the whole year, 11 months, it will be about 0.7% impact on GDP growth,” he said.

The economic impact projections were based on assumptions that Chinese inbound tourism to the Philippines will be cut by 100%, and other foreign tourists will be reduced by 10%, according to the NEDA chief.

“In the Philippines, in terms of travel and tourism, our estimate is about P450 billion out of P92 trillion GDP.”

“If its going to escalate and become very serious, it will have a different number,” the Cabinet official said, noting that NEDA’s figures are preliminary estimations and “would change, depending on how things pan out,” he added.

Nevertheless, the Cabinet official said domestic tourism will be able to offset the potential lessening of foreign tourists arrivals in the country.

“Domestic tourism is bigger actually in terms of, if you combine inbound tourism with domestic tourism, the percentage in GDP is about 12.7%...,” Pernia said.

“More than half of travel and tourism is domestic compared with international inbound tourism. Meaning we might be able to make up a bit or offset a bit of what we will loose from inbound tourism. We might be able to make it up in terms of domestic tourism ... if Filipinos decide to travel internally domestically instead of going abroad," he added.

For his part, Trade Secretary Ramon Lopez said local hotels and airlines will be offering lower promo prices that can encourage domestic tourism.

“The share of domestic tourism definitely we expect it to grow,” Lopez said. —LBG, GMA News