The ongoing coronavirus disease 2019 (Covid-10) outbreak can materially affect the Philippines and other developing Asian economies, including sharp declines in domestic demand, tourism, trade and production linkages, supply disruptions, and health effects, according to latest analysis by the Asian Development Bank (ADB).
“The magnitude of the economic impact will depend on how the outbreak evolves, which remains highly uncertain,” it said.
Based on the analysis by the Manila-based financial institution, the global impact of Covid-19 ranges from $77 billion to $347 billion, with the People’s Republic of China (PRC), where the outbreak has been concentrated so far, accounting for two-thirds of the total.
It said Philippine tourism revenues could decline $801.4 million under a best-case scenario, $1.16 billion under a moderate scenario, and $2.25 billion under a worst-case scenario.
The authors assumed travel bans and precautionary travel behavior will last for two months in the best-case scenario, three months in the moderate scenario, and six months in the worse-case scenario.
The estimated decline in tourism revenues by percentage of the gross domestic product (GDP) would be about 0.242 percent, 0.352 percent, and 0.681 percent, respectively.
The analysis said ADB developing member countries (DMC) that will be significantly affected are those with strong trade and production linkages with the PRC.
It identified the Philippines among those with global value chain exposure and exports to the PRC.
“…The PRC is also a major destination for these economies’ final as well as intermediate goods and services,” it added.
With this, the ADB said it is supporting its members in responding to the Covid-19 outbreak through finance, knowledge, and partnerships.
“ADB stands ready to provide additional support to DMCs via countercyclical support programs, emergency assistance loans, and other instruments, if needed,” it added.