The rapid spread of the coronavirus disease 2019, or COVID-19, from China to Asia, Europe and the United States has drawn unprecedented responses from many governments.
From a countrywide lockdown in Italy to President Donald Trump’s decision to ban all travel from mainland Europe to the US for a month to fight COVID-19, the state reactions are prompting people to alter their work schedule and lifestyle. Factories and work in offices are slowing down as a result of the anxiety, while consumers are rushing to supermarkets to stack up on food and hygiene essentials.
The global economy is starting to feel the pinch, with nervous stock market investors fearing a global recession. Global stock markets crashed again Thursday after the World Health Organization officially declared the outbreak a pandemic. The disease has virtually affected all sectors of the economy, with tourism bearing the brunt in the aftermath of travel bans and quarantine requirements.
Here in the Philippines, the National Economic and Development Authority is reducing the 2020 gross domestic product forecast by 1 percentage point from a range of 6.5 percent to 7.5 percent to a band of 5.5 percent to 6.5 percent. Reduced economic activities imply lesser job opportunities.
The Department of Tourism said earlier up to 50,000 jobs were at risk in the sector that employs roughly 5.4 million of the labor force. The Philippines received a record 8.26 million foreign visitors in 2019 with tourist receipts reaching $9.3 billion. The figures translated into $128 spent by each tourist based on the average number of days they stayed in the country.
The Philippine economic team and monetary authorities should now craft plans to pump prime the economy and limit the damage of the COVID-19 outbreak. The Bangko Sentral ng Pilipinas, for one, should implement bigger cuts in interest rates this year to spur economic expansion.
The government can also draw up a rescue fund and tax breaks in the tourism sector to assist those reeling from travel bans and dwindling tourist numbers, especially the small businesses.
The Philippine economy, along with the rest of the world, will surely recover from the COVID-19 outbreak. But the government must create the right financial environment that will speed up economic recovery.
