China virus impact could cut 0.7% of GDP
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Fri, 07 Feb 2020 16:56:35 +0000
THE impact of the 2019 novel coronavirus acute respiratory disease (2019-nCoV ARD) outbreak could shave as much as 0.7 percent of the country’s gross domestic product (GDP) if it lasts the entire year, according to preliminary estimates of the National Economic and Development Authority (NEDA).
At the #AskNEDA briefing in Pasig City on Friday, Socioeconomic Planning Secretary Ernesto Pernia said if the outbreak “will last for one month, then the effect would be something like 0.06 percent of GDP. And if…up to June, then it would be about 0.3 percent.”
“And if it is up to December or the whole year, it would be about 0.7 percent [of] GDP growth,” he added.
First emerging in the city of Wuhan in China’s central Hubei province last month, the 2019-nCoV has claimed the lives of more than 630 people — including one in the Philippines — infected at least 31,000 others and spread to more than two dozen countries as of Friday.
Echoing other economic managers, the NEDA chief said tourism would be one of the major sectors to be hit by the outbreak.
Providing context, the Cabinet official said tourism income or expenditure by travelers constitute about 5 percent of the country’s GDP, or about P450 billion of the total P92-trillion size of the Philippine economy.
Latest data from the Department of Tourism (DoT) showed that the number of foreign tourists in the country reached 7.48 million in the first 11 months of 2019, up 15.58 percent from the year-ago figure. Tourists from mainland China were the second-highest in the period, with 1.62 million.
NEDA’s preliminary estimates on the disease’s economic impact for the first half of the year mirrors the figure projected by the Bangko Sentral ng Pilipinas (BSP) on Thursday.
BSP Governor Benjamin Diokno said estimates showed a reduction of a 0.2 percentage point (ppt) in the first quarter GDP and 0.4 ppt in the second, or an average of 0.3 ppt for full-2020 growth.
The government aims to record economic growth of between 6.5 to 7.5 percent for the year.
Several analysts also estimated that the virus’ impact on the economy would reach between $300 million and $600 million.