The National Economic and Development Authority (NEDA) said the economy has a “fighting chance” of growing by around six percent in the first quarter of the year, with growth driven by domestic tourism, infrastructure spending.
In the first quarter of 2019, the economy grew at a slower pace of 5.6 percent, then dampened by the delayed passage of the 2019 General Appropriations Act.
Asked by reporters if it would be possible to grow at a faster pace this quarter, or at around six percent, Ernesto Pernia, socioeconomic planning secretary, said: “I think we have a fighting chance.”
“Maybe domestic tourism will pick up, so (it will) kind of compensate for international tourism (which was affected by the novel coronavirus outbreak). There will be spending on domestic tourism. Airlines are giving discounts so that will entice a lot of (tourists),” Pernia told reporters at the House of Representatives last Tuesday.
Pernia also observed that people are beginning to be less worried of the COVID-19, as he said that less people are wearing masks these days.
Pernia said many infrastructure projects are taking off, and this is also seen to contribute to the growth this year.
“There have been many projects (getting) off the ground, spending will probably increase, because we have already approved 72 of the 100 flagship projects. There are some projects that don’t need NEDA Board approval,” Pernia said.
For this year, the interagency Development Budget Coordination Committee’s growth projection for the economy is 6.5 to 7.5 percent.
Meanwhile, the Asean+3 Macroeconomic Research Office (AMRO) said in a report released yesterday that the COVID-19 is expected to affect not only China’s economic growth, but neighboring countries as well, including the Philippines.
In its latest analytical note titled, The impact of the coronavirus epidemic on the Asean+3 economies, AMRO said China’s GDP growth in 2020 would be lowered by as much as 0.5 percentage point (ppt), already taking into account the supporting measures of the government.
The slowdown in China would then result in a deduction of 0.2 ppt from the Asean+3’s growth, which includes the Philippines.
“The main spillover channels to the region would be through a sharp drop in Chinese outbound travel and tourism, a drop in regional travel and tourism reflecting fear of contracting the disease, a decline in China’s imports through the supply chain as manufacturing production is disrupted and as domestic demand is affected, and the spread of the disease to regional economies,” the report said.
