The Bureau of Customs (BOC) said it is bracing for the impact of the 2019 novel coronavirus (nCoV) on the trade in goods of the Philippines not only with China but also with other countries.
BOC spokesman and Assistant Commissioner Vincent Philip C. Maronilla said the agency’s estimates show that China accounts for 40 percent of the country’s total trade volume.
“We [all government agencies] are preparing for [nCoV]. I’m sure it will have an economic impact particularly in China, and China being one of the biggest, if not the biggest trading partner of the Philippines, there will be some effect,” Maronilla said in a phone interview on Friday.
The BOC official made the statement on the same day when Manila confirmed the first case of nCoV in the country involving a 38-year-old woman from Wuhan, China.
On Sunday, the Department of Health (DOH) announced the second case of nCoV which is turned out to be the first virus-related death in the Philippines and the first outside of China.
Should n-CoV spread, Maronilla said trade would be hampered as importers may go slow on importing products from China, and other countries where there are confirmed cases.
Wuhan, considered one of China’s top manufacturing areas, is currently on lockdown due to the spread of the virus.
“The fear of the virus could affect all regions,” he said. “Factories that are getting their supplies or the multinational companies that [outsource production] to China would also be affected. Many countries depend on China for production labor there is cheap.”
Maronilla said the bureau remains vigilant when it comes to shipments, especially from countries with confirmed nCoV cases.
While the virus would need a live host for it to survive, Health Secretary Francisco T. Duque III said the agency remains on heightened alert and is particularly concerned about shipments of used clothing.
“We’re just going to tighten up our watch in terms of the permits that are being issued. We are going to coordinate with the Food and Drug Administration, which is under the DOH, and other government agencies when it comes to shipments from China,” said Duque.
Disruptions
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said travel, tourism, hotel accommodations, gaming and the retail sector may be affected by the spread of nCoV.
However, Ricafort noted that the Philippines is less dependent on tourism and as such, will not suffer huge losses compared to other Asean countries that consider tourism as a major contributor to GDP.
“There may be some temporary disruptions [affecting] manufacturers like Toyota, Honda, etc. Some of the workers of firms in manufacturing and service industries are working from home,” he said.
“Realitiscally, the markets are pricing slower economic growth. So if we have slower economic growth, there will be a reduction in demand for oil. That’s why oil has declined by $10 [per barrel] already and interest rates have gone down worldwide,” he added.
Ricafort expects inflation to ease in the coming months due to lower oil prices.
He also noted that the country’s growth following the outbreak of the Middle East respiratory syndrome coronavirus (Mers-CoV) and the severe acute respiratory Syndrome (SARS) even picked up because the economic conditions were different at the time.
The country’s GDP in 2002 and 2003, when SARS broke out, expanded by percent and 5 percent, respectively. The Philippines registered a GDP growth rate of 6.1 percent in 2014 and 2015 during the MERS-CoV outbreak.
“The Philippines is not affected that much when it comes to Mers-CoV and SARS, but there would be sectors that would feel the pain,” he said.