We suffered a dent in the national economy in 2018 as a result of the high inflation rate that hit a high of 6.7 percent in September that year. It was a year of high prices – caused by high world oil prices combining with a new Philippine tariff on diesel imports. Our government economic managers slashed the target for Gross Domestic Product (GDP) from 7 to 8 percent, to 6.5 to 6.9 percent,
For 2019, the GDP target was 6 to 6.5 percent, but because of the delayed passage of the 2019 national budget, the goal was not met. At the end of the year, the average growth was determined at 5.9 percent, according to the Philippine Statistics Authority – an eight-year low.
With the early approval of the 2020 national budget of P4.1 trillion, there were high hopes of a rebound this year. But now we have this new crisis – the coronavirus epidemic which has already affected Philippine tourism and Philippine exports to China.
Early this week, Finance Secretary Carlos Dominguez III said ongoing developments might “slightly restrain” the nation’s economic expansion plans, but “we are standing by our working projection of a GDP growth rate between 6.5 and 7.5 percent for 2020.”
The travel and tourism industry around the world has been hit by the coronavirus epidemic as a result of travel bans imposed by so many countries. Dominguez recalled that during the SARS outbreak in 2003, tourist arrivals in the Philippines declined to 1.9 million, but they jumped to 2.3 million by 2004.
Tourist arrivals similarly declined in the H1N1 epidemic in 2009. But by the time of the MERS outbreak in 2012, the Philippine tourism industry had become resilient, he said.
Philippine exports of electronic parts will be affected by the temporary closures of factories in China and disruption of global supply chains, he said. But the Department of Trade and Industry is working closely with Chinese companies looking for production sites outside China, he added.
Tourism and electronic exports – these are the principal sectors that are likely to be affected by the ongoing coronavirus epidemic, but “these threats are not enough to force a dramatic reduction in our growth estimates. We are standing by our working projection of GDP growth rate of between 6.5 and 7.5 percent for 2020,” Secretary Dominguez said.
We welcome this hopeful and positive assessment. It should help ease the worries of some that the ongoing coronavirus epidemic will have such ill effects on our economy, along with the fear of many that they may fall victim to the contagion itself.
The epidemic may continue to spread around the world as people return home from their travels, but our precautions at our airports as well as monitoring by the Department of Health assure us that this epidemic, like the ebola, SARS, MERS, avian flu, and other viral epidemics before them, will soon be over with only a slight dent on our economy. And life — both the daily life of people and the economic life of the nation—will soon be back to normal.