THE Philippine economy is likely to contract this year if the novel coronavirus crisis persists until June, with the National Economic and Development Authority (Neda) estimating the economic loss between P428.7 billion and P1.36 trillion.
The Neda said in a report Tuesday, March 24, 2020, that it estimates a contraction of 0.6 percent and expansion of only 4.3 percent if mitigating measures aren’t put in place.
The Philippine economy last contracted by 0.6 percent in 1998 during the Asian financial crisis.
Economists have suggested a likely global recession in 2020 as the coronavirus pandemic badly hits economies across the globe.
The enhanced community quarantine in Luzon, which accounts for about 70 percent of the country’s economic output, could cost the economy as much as P298 billion to P1.09 trillion.
The Neda also estimated losses in the transport and tourism sectors to reach P77.5 billion to P156.9 billion.
Exports are projected to lose P4.9 billion to P9.8 billion. Remittances are also likely to suffer, with losses pegged at from P3.9 billion to P8.5 billion.
The coronavirus-induced economic crisis widely hurt consumption, as several businesses close shop and consumers stay home.
The Neda estimates P45.1 billion to 93.6 billion in foregone consumption.
Because of this, Neda pushed for a comprehensive plan to mitigate the social and economic impact of Covid-19.
“The response measures should delicately balance the health and economic objectives, particularly as the impact varies by economic class. Otherwise, the situation could deteriorate to a social and political crisis,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement on Tuesday.
The Neda has proposed a three-phase intervention plan for the government to boost public health measures, rebuild consumer and business confidence, and resume a new normal state of economic activity that is more prepared for another possible pandemic.
The public health crisis currently faced by the country shows how crucial a whole-of-government and whole-of-society approach is in addressing the challenge.
“During a crisis, it is best to plan ahead and avoid the worst-case scenario. We have crafted a comprehensive program of actions, learning from experiences and insights from various sectors and countries. This program requires close collaboration among government instrumentalities from national to local, the business sector from micro to large, non-government organizations and citizens alike,” Pernia said.
As Covid-19 cases continue to rise in the country, the Neda pushes for heightened public health measures to contain the spread of the disease.
“The key to a successful medical response is widespread testing. Early detection and diagnosis will lead to early initiation of quarantine procedures, which will therefore limit or prevent the spread of the coronavirus disease,” said Pernia.
“It is crucial to have adequate number of testing kits, medical supplies, facilities, and equipment and health care personnel across the country. This may require the use of makeshift facilities or converted structures, in the immediate term,” he added.