ADB: PH tourism to lose up to $2.2 B due to COVID-19

Published March 6, 2020, 12:00 AM

by manilabulletin_admin


The ongoing coronavirus disease(COVID-19) outbreak would cost the Philippines billions of dollars in losses from the tourism sector alone, the Asian Development Bank (ADB) estimated yesterday.

Based on the new analysis by the Manila-based financial institution, the magnitude of the economic losses on the Philippines will depend on how the COVID-19 outbreak evolves in the Philippines, which remains highly uncertain.

But what is certain for the ADB is that the outbreak would result in sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions, and health effects.

The range of scenarios explored in the ADB analysis revealed that Philippines’ decline in tourism revenues by percentage of the nation’s economy, as measured by the gross domestic product (GDP), would be about 0.242 percent to 0.681 percent.

Under the best-case scenario, or an assumption that travel bans and precautionary travel behavior will last for only two months, the local tourism sector would incur $801.4 billion in losses.

In a moderate scenario, where precautionary behaviors and restrictions such as travel bans start easing three months after the outbreak intensified, the decline in tourism revenues is about $1.16 billion, or 0.352 percent of GDP.

But if the ill-effects of the COVID-19 would last for six-months, the worse-case scenario would cost the tourism industry about $2.25 billion.

Yasuyuki Sawada, ADB chief economist admitted that there are many uncertainties about COVID-19, including its economic impact.

“This requires the use of multiple scenarios to provide a clearer picture of potential losses. We hope this analysis can support governments as they prepare clear and decisive responses to mitigate the human and economic impacts of this outbreak,” Sawada said.

In a global scale, ADB estimated that COVID-19 would cost about $77 billion to $347 billion, or 0.1 percent to 0.4 percent of global GDP.

The People’s Republic of China (PRC) would account for $103 billion of those losses — or 0.8 percent of its GDP. The rest of developing Asia would lose $22 billion, or 0.2 percent of its economy.

But Sawada clarified that the ADB estimates “should not be interpreted as predictions that an outbreak will occur but are meant to provide guidance for governments as they consider appropriate responses.”

To date, ADB’s response to COVID-19 includes $2 million to enhance detection, prevention, and response in China and the Greater Mekong Subregion.