By Vanne Elaine Terrazola
The Philippine economy will be able withstand the impact of the novel Coronavirus (2019-nCoV), Finance Secretary Carlos Dominguez said Tuesday.
Finance Secretary Carlos Dominguez III
(Facebook / File Photo / MANILA BULLETIN)
While admitting that it was "too early" to assess the economic impacts of the new Coronavirus strain, Dominguez, in a Senate hearing, said they continue to believe that the economy will meet their gross domestic product (GDP) growth goal for this year.
"It is reasonable to expect that while these developments might slightly strain our economic expansion, these threats are not enough to cause dramatic reduction in our growth estimates. We are standing by our working projection of the GDP (gross domestic product) rate between 6.5 percent and 7.5 percent for 2020," he told members of the Senate health committee.
But a "significant impact" on the economy would involve the country's tourism sector.
"The travel and tourism sector around the globe is taking a hit as result of the various levels of travel bans imposed by natl governments and voluntary decision of airlines to stop flights to and from China," Dominguez said.
With the 2019-nCoV outbreak is still at its early stage, Dominguez said the government may look to the negative effects of previous global epidemic.
He cited for instance the outbreak of the severe acute respiratory syndrome (SARS) in 2003, which caused a 1.3-percent drop in tourist arrivals, particularly from 1.93 million arrivals recorded in 2002, to 1.9 million in 2003.
But the effect of the disease did not last long as tourist arrivals "rebounded quickly" in 2004 by 20.1 percent or 2.3 million, Dominguez said.
The tourism sector continued to grow until the discovery and spread of the new the influenza A (H1N1) virus in 2009, which again resulted in a decline in arrivals, but only aggravated by the financial crisis that gripped world economies, he pointed out.
He said the Philippine tourism likewise remained "resilient" during the spread of the Middle East respiratory syndrome (MERS)-CoV.
According to Dominguez, tourism direct gross value added, or the contribution of the tourism industry to economy, had "rapidly increased" over the past years, due to the spike in arrivals from China.
The Finance chief said he expects this to be affected by the travel restrictions implemented by the government amid the 2019-nCoV outbreak.
Despite this, Dominguez said he sees growth in domestic tourism as Filipinos are expected to travel to local destinations, especially those who have postponed international travels.
The Department of Tourism (DOT) will also intensify its promotion of domestic destinations for local travelers, he said.
Meanwhile, the lockdown currently being implemented in Wuhan, China, is expected to also have an effect on Philippine trade and industry.
Wuhan, the epicenter of the 2019-nCoV outbreak, is considered as China's transport hub, and "China has been Philippines' stock trade partner," Dominguez said.
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He said more than half of the country's exports to China last year were shipments of electronic parts.
"In the immediate term, the temporary closure of factories and disruption of global supply chain may cause temporary, slight decline of exports, particularly electronic and auto parts," he told senators.
"Incidentally, out top imports from China such as steel, machinery and petroleum, are products that do not seem to carry nCOv," he, on the other hand, said.
Dominguez said the DOF will continue to monitor development relating to the 2019-nCoV, and its impacts to the country.
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