Philippine exports are projected to lose this year P4.9 billion to P9.8 billion, or 0.02 to 0.05 percent of the country’s economic growth, due to the impact of coronavirus disease 2019 (Covid-19), according to the National Economic and Development Authority (NEDA).
In a report titled “Addressing the Social and Economic Impact of the COVID-19 Pandemic”, NEDA said foregone revenues could also result in an employment loss of 3,000 to 6,700.
The NEDA estimate was based on the assumption the top 10 exports that are dependent on China, as well as the three consumer products dependent on Hong Kong, declined in February 2020 at rates similar to the contraction seen in partial customs data for February ranging from 11 percent to 100 percent.
The report said China is the country’s single largest trading partner, comprising a fifth of the Philippines’ total trade.
In 2019, trade between the Philippines and China, including Hong Kong and Macau, amounted to $47.5 billion.
It identified mineral products (copper metal, copper concentrates, chromium), veneer sheets, seaweeds, bananas, telecommunications, chemicals, electronic data processing, and automotive electronics with high export dependence on China.
These items together account for about 35 percent of Philippine exports to China.
“The most significant among them are electronic data processing, bananas, and copper metal, as these three account for about 28.0 percent of exports to China. Based on partial customs data for February, total exports to China are down by about 55.0 percent,” it said.
The report further said there are no specific reports of factories or manufacturers within Hong Kong that have stopped operations partially or permanently.
“Business closures are limited to retail shops and service-oriented businesses. Therefore, among our exports that are the most dependent on Hong Kong, those that are more likely to be affected are those that are consumer-oriented such as mangoes, shrimps and prawns, and travel goods,” it added.
However, NEDA said the macroeconomic impact is likely to be limited given that the three items account for only 1.0 percent of Philippine exports to Hong Kong.
It projected the Covid-19 crisis could cost the Philippine economy P428.7 billion to P1.35 trillion and affect up to one million workers, as it also impacts on transport and tourism, remittances and consumption amid the month-long Luzon-wide enhanced community lockdown.
“The estimates assume that the adverse impact will be felt until June, though the brunt will be felt during the one-month ECQ (enhanced community quarantine). External trade, however, is expected to recover beginning March, though will still be affected by the ECQ,” the report added.