Government agencies foresee huge economic losses in the wake of COVID-19, with GDP growth poised to drop between 0.5 to 1%, and an expected breach in the projected budget deficit at around 3.4%.
The Senate Committee on Economic Affairs held a session on Monday, March 9, to discuss the matter of the COVID-19 outbreak. Under P.S. Res. No. 315 – Impact-Risk Assessment Report of the Novel Coronavirus Epidemic, the committee discussed the economic impacts and repercussions of the COVID-19.
Resource persons from the Department of Health (DOH), the National Economic Development Authority (NEDA), the Air Carriers Association of the Philippines Inc. (ACAP), and the Philippine Economic Zone Authority (PEZA) were invited to give updates on the matter.
Dr. Alethea De Guzman, a Medical Specialist from DOH, led the presentation from the DOH along with Dr. Gemma Arellano, Program Manager for the Emergency Operations for COVID-19. DOH presented updates on patients under investigations and repatriates, and answered critical questions from Senator Nancy Binay and Senator Imee Marcos regarding the approach of DOH on the matter, the plan to see through the worst scenario, and what needed to be fulfilled to fight the virus – a request of P2 billion supplementary budget.
National Economic Development Authority (NEDA) Undersecretary Rosemarie Edillon presented status updates on the Philippine economy and estimated a .5 to 1% drop in expected Gross Domestic Product (GDP) growth along with a higher expected budget deficit (3.4%) due to the reduction in manufacturing, tourism, and other industries – which will breach the target by P680 billion in actual number.
Recommendations by Usec. Edillon to reduce the negative impacts that the COVID-19 includes regulatory forbearance, budget retooling, and resource management of strategic commodities, among others.
Meanwhile, the Executive Director of Air Carriers Association of the Philippines Inc. (ACAP), Atty. Roberto Lim, presented that the airline industry is suffering both in foreign and domestic tourism. The current loss overall is around 12-20% in flight capacity along with other additional costs from delays, additional operating procedures, and refunds. Currently, “the losses keep on mounting” with an estimated 1.4 million passengers affected, Atty. Lim said.
To mitigate losses, Atty. Lim suggested some contingencies from the government which is currently unavailable. Inspired by other Southeast Asian neighbors, Atty. Lim made two proposals: the cancellation of navigational and landing charges which will provide 500 million monthly savings for the airline industry; and the suspension of travel tax to stimulate demand for travel.
Lastly, Philippine Economic Zone Authority (PEZA) Director General BGen. Charito Plaza reported a slowdown in export manufacturers due to the decline of global demand, closure of suppliers, and other factors such as the Corporate Income Tax and Incentives Reform Act (CITIRA).