Import slowdown seen as coronavirus lingers

MANILA, Philippines — The spread of the 2019 novel coronavirus (nCoV) has caused a slowdown in imports from China, a development which could affect the government’s revenue collections, the Bureau of Customs (BOC) and Department of Finance (DOF) said.

In a press briefing following the BOC’s 118th anniversary celebration last Friday, Customs Commissioner Rey Leonardo Guerrero said several importations from China had been delayed due to the Chinese New Year as well as the nCoV outbreak.

“In February, we were experiencing the effects of the Chinese New Year. We were told that after the Chinese New year, people from China should be reporting for work already,” Guerrero said.

“But because of the nCoV, some of them had to extend their vacation for another 10 days. Because of that, we received reports from some importers that they could not ship their exports from China to the Philippines because of lack of manpower,” he added.

Finance Secretary Carlos Dominguez also noted that some factories in Wuhan, the epicenter of the outbreak, have closed and this could affect the volume of imports.

“We don’t know how many of the factories there are really closing. We might have less imports from the Wuhan area so that might affect our revenues,” he said.

Citing estimates, the finance chief said the outbreak may slash the country’s gross domestic product (GDP) growth by 0.3 percentage point this year.

“The estimates I’ve seen is that if it really turns out bad, we will probably see a hit of about three tenths of one percent of our GDP growth rate. But again, we’re not teetering on the edge of bankruptcy or anything, we have a very resilient economy,” he said.

Dominguez reiterated that the spread of the virus may affect the country’s tourism and manufacturing sectors.

“Some areas will be affected such as areas that are in tourism, particularly

airlines. We’ll probably see a hit in some manufacturing especially those manufacturers who export to the Wuhan area,” he said.

The secretary, in a text message to reporters, also shared a report from the Overseas Development Institute, which put the Philippines among the countries that are most at risk due to the coronavirus outbreak, along with Vietnam and Sri Lanka.

To manage the risks, he said the government and the public should maintain a vigilant stance to assure the safety and good health of the population.

He said the government should also continuously monitor developments in the trade and tourism sector, and be ready to implement monetary and fiscal policies to counter potential economic fallout.

Lastly, he said agencies must prepare marketing and finance programs to assist industries that may be adversely affected by this development.

On the other hand, Dominguez said the eruption of the Taal volcano in Batangas had a minimal impact on economic growth.

“In Taal, the effect on the GDP there is really small. I think it’s 0.17 percentage of the GDP of the Calabarzon area,” he said.

He said the situation may have already reached its peak, unless Taal’s volcanic activities pick up again, which is still unpredictable.

The BOC reported earlier that its collections last January reached only P56 billion, P2 billion short of the P58 billion target. Guerrero attributed this to the eruption of Taal.