Virus scare to hurt Cebu’s economy

CEBU, Philippines — The current situation in the country, including in Cebu, brought about by the novel coronavirus acute respiratory disease has the potential to affect trade and commerce but players on the ground believe economic stagnation will be temporary.

“Based on the expected travel restrictions and related effects, the nCoV scare can shave off on percent of GRDP in the region but will rebound strongly by July when colder temperatures in China become warm. We expect the virus to dissipate/die down by then,” said Mandaue Chamber of Commerce and Industry (MCCI) President Steven Yu.

The 2019-nCoV ARD is said to survive less in warmer temperatures.

While it may be too early to quantify the effects of the situation to the economy, Jette Gamboa, Metrobank head for investor relations and strategic planning, is optimistic the effect would be minimal and brief, and the economy won’t be crippled because it rests on a strong foundation.

She explained that the country’s economy is fuelled highly by government spending, thus, economists are optimistic of sustained economic growth.

Analysts at ANZ Research said that because businesses and factories in mainland China have closed due to internal travel restrictions amid the crisis, a 20 percent drop in imports from the country in three months could slash Philippine economic growth by 0.08 percent.

Meanwhile, Philippine Retailers Association (PRA-Cebu) President Robert Go expressed fears that the outbreak may cause huge economic loss in Cebu and Central Visayas as the region’s economy is driven by tourism.

“We are a very tourist oriented economy,” Go said, explaining that aside from the temporary cancellations of some direct flights from China, travelers around the world both for business and leisure have to postpone their travels until the “air is cleared.”

Go said Chinese tourists contributed a significant share in tourism-related income pie in Central Visayas. Under the current situation, Cebu and the region may easily loss a billion pesos in revenue.

“Chinese tourists contribute huge income to hotels, restaurants, retail shops, tour groups, tour buses, and related to tourism. We will see empty hotels, restaurant catering to tourists specifically Chinese restaurants. Other country tours are also affected like Hong Kong,  Macau, and Taiwan,” Go said.

Yu appealed that everyone instead focus on cost saving measures and increase productivity.

“The last thing we need to do is panic. We need to be creative and use excess capacity for other productive means,” Yu said.

Tourism

Over the weekend, House Deputy Speaker and Surigao del Sur Rep. Johnny Pimentel also expressed concerns of the effects of the outbreak on tourism.

"The entire Philippine tourism sector – airlines, resorts, hotels and restaurants, possibly even gaming – is bound to be adversely affected by the sudden decline in the number of Chinese vacationers,” Pimentel said.

China is the Philippines’ second-largest supplier of foreign visitors after South Korea.

Chinese tourists accounted for 21.73 percent of the 7,484,115 foreigners that arrived in the Philippines from January to November 2019, according to the DOT.

The Philippines received a total of 1,626,300 visitors from China in the 11-month period, up 40.20 percent from 1,159,998 in the same period in 2018.

The number of Chinese travelers was just 159,048 shy of the 1,785,357 vacationers from South Korea in the 11-month period.

The number of Chinese tourists has soared since 2016 on account of warmer government-to-government relations between Manila and Beijing under President Rodrigo Duterte’s administration.

The Philippines received 394,951 Chinese visitors in 2015; 675,663 in 2016; 968,447 in 2017; and 1,257,962 in 2018. (FREEMAN)