Lawmakers contest projected nCoV impact on economy

MANILA, Philippines — Lawmakers are contesting pronouncements from economic managers that the 2019 novel coronavirus acute respiratory disease (nCoV) outbreak will have minimal impact on the country’s economy.

House economic affairs committee chair Rep. Sharon Garin, Deputy Speaker Mikee Romeo and ways and means committee chairman Rep. Joey Salceda have expressed belief the current health crisis would have “significant impact” on the economy.

Socioeconomic Planning Secretary Ernesto Pernia earlier said the travel ban imposed by government due to the nCoV threat would cut the country’s gross domestic product (GDP) growth by only 0.06 percent.

The economists-lawmakers did not agree and warned that the crisis could cut the GDP growth by about 0.5 percent, citing repercussions on the tourism sector alone.

Garin, representative of AAMBIS-OWA party-list and an economist by profession, explained that tourist arrivals from China constitute 20 percent of the total tourist arrivals in the country.

She said the 360 flights to and from China affected by the government’s travel ban would have “direct impact” on the local economy.

“Tourism constitutes 13 percent of our GDP so if you convert that, the Chinese tourists will constitute 2.2 percent of the GDP and that’s a big impact. This has very substantial economic impact that we have to address,” she told a weekly forum at the Lower House.

Garin said her panel and the committee on tourism will conduct a public hearing next week to help relevant executive agencies address the economic impact of the nCoV outbreak.

She said officials of the Department of Tourism, Department of Trade and Industry, National Economic and Development Authority as well as executives of local government units affected by the disease would be invited to the hearing.

Romero, of 1-Pacman party-list, expressed belief the impact of the contagion would depend on how long the health crisis would last.

“The impact on the tourism industry will depend largely on how long the nCoV crisis lasts. The SARS crisis lasted for around nine months. If it takes the same amount of time before the nCoV crisis abates, the tourism industry may decline to around 2.0 to 2.2 percent of GDP, depending on whether we can effectively come up with a catch-up strategy,” Romero said.

Salceda, for his part, suggested that the government consider “holiday economics” and promote domestic tourism.

“We see the nCoV lowering our growth potential by 0.1 to 0.4 percent from baseline, depending on how protracted the situation becomes. This can be easily mitigated by the prompt delivery of government programs and projects,” he said. “Economically, this is a situation where the only thing we have to fear is fear itself. The impact of the situation will depend squarely on how the government maintains public confidence,” the Albay representative pointed out.