By Cai U. Ordinario & Ma. Stella F. Arnaldo
TAAL Volcano’s eruption has resulted in economic losses of P7.63 billion for the province of Batangas, but the National Economic and Development Authority (Neda) maintained this amount is not significant enough to slow GDP in the first quarter.
Socioeconomic Planning Secretary Ernesto M. Pernia said the Neda’s preliminary estimate does not yet include the other losses incurred by the government and the private sector.
Pernia said the estimate is not even 1 percent of the country’s P9.2-trillion GDP in 2018, which was estimated using constant prices.
“Total economic losses comprise provincial income—gross value added—plus provincial wealth [and] public and private structures,” the Neda chief told the BusinessMirror via SMS.
When asked about the estimated cost of prolonged volcanic activity for Batangas, Pernia said the Neda has yet to crunch the numbers.
However, De La Salle University economist Maria Ella C. Oplas told the BusinessMirror she expects Taal Volcano’s eruption will “significantly” impact the country’s economic performance, particularly in the first quarter of the year.
Based on the 12 p.m. update from the National Disaster Risk Reduction and Management Council (NDRRMC), around 40,752 persons or 9,527 families were affected by the Taal volcano eruption.
A total of 605 flights were canceled, including 243 international flights and 362 domestic flights.
“This will greatly impact our economic growth for the first quarter of the year,” Oplas said. “Just imagine the flights cancelled, businesses in the area that stopped operations, and [its effect on] tourism.”
On Monday, Pernia told the BusinessMirror on Monday that the eruption will have “some negative effect” on the performance of the economy in the first quarter of the year.
However, given its current scale and intensity, Pernia said this will not have a significant impact on first-quarter GDP growth.
Calabarzon, which includes Batangas, accounted for the second largest share of the country’s GDP at 17 percent in 2018, according to data from the Philippine Statistics Authority (PSA). The National Capital Region (NCR) accounted for the largest share at 36 percent.
Of the 6.2 percent GDP growth recorded last year, the NCR, Calabarzon and Central Luzon were the top three contributors. NCR chipped in 1.8 percentage points; Calabarzon, 1.2 percentage points; and Central Luzon, 0.7 percentage points.
The PSA will release the initial full-year GDP growth estimate for 2019 before the end of the month.
Tourism losses
Losses in the tourism industry in Calabarzon due to the erupting Taal Volcano are expected to be major, but not substantial enough to make a dent in the overall tourism arrivals and revenue of the country this year.
Based on an average room rate of P3,500-P5,000 per night, the 88 accommodation establishments accredited by the Department of Tourism (DOT) in the region stand to lose from P4.62 million to P6.6 million over 15 days, as computed by the Hotel Sales and Marketing Association (HSMA).
The 88 accommodations include hotels, resorts, and mabuhay accommodations (tourist inns, pensions, bed and breakfasts, etc.).
Of the 88 accredited accommodations, 16 are in located in Tagaytay City in Cavite, some of which have a clear view of Taal Volcano, which is still on Alert Level 4, while 30, mostly coastal resorts, are located in Batangas province, now under a state of calamity.
Citing figures from the tourism office of Tagaytay City, the DOT-Region 4A office said, “indirect revenue from tourism was P1 billion in 2018. For 2019, they had 1.1 million overnight tourist arrivals and 6.3 million million same-day tourist arrivals.” The office did not explain what “indirect revenue” meant.
Also, BusinessMirror was informed that DOT-Region 4A “does not collect tourist receipts data.”
In an interview, Tourism Congress of the Philippines President Jose C. Clemente III said, the immediate impact of the Taal eruption would be on “Batangas, which attracts such activities like diving, golf, cultural tours in places like Taal Town, Talisay and so on. In Laguna and Cavite, it also impacts cultural and sports tours. But the numbers to these areas are not as much to greatly impact overall arrivals of the country.”
The DOT reported earlier that overnight tourists in the Calabarzon reached 7.48 million, with Batangas accounting for 34 percent of total arrivals or 2.55 million. Cavite, in which the popular Tagaytay City is located, received 1.08 million overnight tourists that same year. See, “Tourism in Tagaytay, Cavite, Batangas uncertain,” in the BusinessMirror, January 14, 2020.
“The bigger effect is how the duration of the eruption will affect the operations of the airports,” said Clemente. “This will have a greater effect on arrivals. Having regional international airports will help somewhat, but the overwhelming arrivals are still via Manila. A prolonged eruption will disrupt travel patterns to the country,” he stressed.
Total arrivals in the country reached 8 million as of December 27, 2019, while inbound tourism receipts were recorded at P379 billion from January to September 2019.
For his part, Cesar Cruz, president of the Philippine Tour Operators Association, said his own tour operations company, T.R.I.P.S., already had to “cancel one group which was supposed to stay in Tagaytay for two nights January 16-18. This is worth P300,000.” He said these were domestic tourists.
He added, January is still a peak season for tourism because of the cool weather. “[For] those who feel that Baguio City is too far, Tagaytay is a good option,” he explained.
Clemente, who is also president of Rajah Tours Philippines, said their company has “received about 10 cancellations so far due to cancelled flights and general apprehension. It’s a good thing majority of the group is already here. But so far, the guests we have arriving in the next few days are proceeding with their trips here.” He said this is a 130-person tour group from Canada under the Department of Foreign Affairs’ annual Winter Escapade under the Ambassadors and Consuls General Group Tours.
Image credits: Roy Domingo