MANILA - Philippine economic managers on Thursday said the economy remained robust and the outbreak of the novel coronavirus was unlikely to cause a recession.
The Duterte administration’s economic development cluster said “the global spread of communicable diseases such as novel coronavirus” is one of the “primary downside risks” to the country’s economic growth this year.
Finance Secretary Carlos Dominguez III, however, added that the fast-spreading 2019 nCoV will not derail the country's growth.
“We are a big enough economy that we can handle this thing. We are not going to go into recession because of it,” Dominguez said, adding that the outbreak has yet to significantly affect domestic consumption.
Socioeconomic Planning Sec. Ernesto Pernia said the outbreak will likely have a “short-term” impact on the country’s tourism. More than a fifth or 1.6 million tourist arrivals in the Philippines from January to November last year came from China, where the virus originated.
“It’s likely to have just a short term effect, because given that there’s a lot of measures being done to minimize Filipinos incurring the coronavirus. It shouldn’t take long for that to have an effect on the economy,” Pernia said.
“Internal travel will probably pick up… and also the business of selling masks will go up, soap and water,” he added.
Dominguez meanwhile said he appreciated the “swift action” of the Chinese government in containing the disease.
“We have to appreciate the Chinese government for these very good measures they’ve taken. In fact, by doing that, they are shortening the length and spread of this virus. It’s a very good start on their side,” he said.
Other downside risks to growth identified by the economic managers are the slowdown in global growth, continuing protectionist policies, and the volatility of fuel prices.
Domestically, risks include the possible eruption of the Taal volcano and the presence of African Swine Fever in the country.
The economic managers assured the public, “the government remains vigilant and well-positioned to address domestic and external risks that can push down the economic growth trajectory over the medium term."
The government’s target growth for 2020 is 6.5 to 7.5 percent. To meet this target, economic managers said the implementation of priority projects should be accelerated, and programs under the Rice Competitiveness Enhancement Fund should be implemented to support agricultural growth.
The cluster also called for the full implementation of the Ease of Doing Business Act, and the passage of the second tax reform package. It added that stricter biosecurity measures and quarantine checkpoints should be imposed to manage and control ASF.
“We expect public spending to spur robust economic activity this year. Substantially higher government spending in infrastructure and social services, stronger domestic consumption, unimpeded by benign inflation and a revitalized agricultural sector are expected to be major growth drivers in 2020,” Dominguez said.