The spread of the novel coronavirus (nCoV) to other parts of China, dubbed the factory of the world, will hit not only the tourism sector but also Philippine manufacturing firms and international trade, local economists said on Monday.
Over the weekend, Bloomberg reported that the lockdown imposed in Wuhan is a concern as the ground zero for the nCoV is one of China’s major industry and logistics hubs.
Economist Calixto V. Chikiamco said the spread of the disease has the potential to disrupt trade and affect the Philippine manufacturing sector’s performance this year.
“[If more places in China will be affected], it will affect not only the Philippines, but also global trade since China is an export powerhouse doing trade with many countries,” said Chikiamco.
Government data indicated that China was the country’s top source of imports, accounting for 19.3 percent of the bill in January to November 2019.
China is also the Philippines’s fourth top export market as its purchases accounted for 12.8 percent of the receipts in the same period.
University of Asia and the Pacific (UA&P) economist Victor Abola said the spread of nCoV to other parts of China will be a “different ball game” given the extent of the impact of the disease.
Abola said the spread of the virus is a concern as China is not always “forthright” when it comes to data.
Chikiamco and Abola believe it is the tourism sector that would bear the brunt of the spread of nCoV in China.
Abola said nCoV could easily reduce the growth of the tourism sector by half or even cause the sector to post flat growth.
“There will be some impact on tourism since Chinese tourists represent one of the biggest nationalities arriving as tourists—Koreans and Japanese are the others,” said Chikiamco.
Last week, Tourism Secretary Bernadette Romulo Puyat said there was a 15.6-percent increase in foreign tourists in the country, reaching 7.4 million from January to November 2019.
China was the second top source market for tourists at 1.63 million, after South Korea’s 1.8 million for the year in review.
In the first half of 2019, Chinese tourists spent $979.4 million, or some P51 billion, in the Philippines. They were the second-largest spender as a market, after South Koreans.
However, in light of the ongoing spread of the novel coronavirus, the Tourism Congress of the Philippines has called for a temporary travel ban on Chinese tourists.
The Civil Aeronautics Board has also banned inbound travel from Wuhan, in the Hubei province of China, which was the reported source of the novel coronavirus infection.
National Economic and Development Authority (Neda) Undersecretary Rosemarie G. Edillon said it is “too early” to tell whether the nCoV will affect the performance of the Philippine manufacturing sector and trade in general.
The Neda was also mum on whether it has run simulations to estimate the impact of the disease on the country’s economy.
However, Socioeconomic Planning Secretary Ernesto M. Pernia said the spread of the virus is a concern of authorities. “It will be discussed during the next Cabinet meeting.”
According to the Associated Press report, China’s government said the death toll from nCoV has risen to 80 with more than 2,700 confirmed cases. Beijing’s health minister also warned that the virus’ ability to spread is “getting stronger.”