The Philippines may lose as much as $22 billion or a trillion pesos in revenues or equivalent of 7 percent of its gross domestic product on a prolonged standstill of international tourism, according to a report of the UNCTAD.
Titled COVID-19 (new coronavirus disease 2019) and Tourism: Assessing the Economic Consequences, the report ranked the Philippines as the 14th most affected among 66 countries in terms of unemployment of unskilled workers under this scenario.
The report showed the Philippines, having been placed on a lockdown for four months, could register losses of $7.7 billion or about 2 percent of the country’s GDP under the most optimistic tourism reduction scenario.
Extending the four months lockdown to eight would increase the losses to about $15 billion or equivalent to a 5-percent reduction in GDP.
The estimated GDP losses would be a high of $22 billion or about 7 percent of GDP under the worst-case scenario, or a 7 percent if the standstill is prolonged to 12 months.
The report said under a worst-case scenario, employment of unskilled workers could fall 10 percent in the Philippines if the tourism sector is stopped for 12 months.
The results highlight the impact of tourism in an economy especially for countries like the Philippines which relies on the sector.
“In many developing and least-developed countries tourism provides an opportunity to enter the job market, though often with precarious working conditions. Tourism often serves as a first entry point into work especially for women, youth, migrant workers and rural population,” said UNCTAD citing a study of the International Labor Organization.
In 2019, the tourism industry contributed 12.7 percent to the Philippines’ GDP.
Tourism-related employment accounted for about 5.7 million jobs last year.
The UNCTAD report added low-skilled, casual and temporary workers are likely to be the first to lose their jobs and may find it difficulty in seeking employment in other sectors of the economy.
The report said the world’s tourism sector could lose at least $1.2 trillion or 1.5 percent of GDP having been placed at a standstill for nearly four months due to the coronavirus pandemic.
The loss could rise to $2.2 trillion or 2.8 percent of the world’s GDP if the break in international tourism lasts for eight months, in line with the expected decline in tourism as projected by the UN World Tourism Organization (UNWTO).
UNCTAD estimates losses in the most pessimistic scenario, a 12-month break in international tourism, at $3.3 trillion or 4.2 percent of global GDP.
Developing countries could suffer the steepest GDP losses. Jamaica and Thailand stand out, losing 11 and 9 percent of GDP, respectively in the most optimistic scenario of UNCTAD’s estimates.
Meanwhile, Secretary Bernadette Romulo-Puyat of the Department of Tourism anticipates the reopening of the tourism industry in concurrence with the local government units, with the easing of travel restrictions, as more places around the country transition to a modified general community quarantine (MGCQ).
President Duterte on Tuesday placed more areas under MGCQ where tourism activities can resume between other MGCQ areas provided that tourism businesses open at a maximum of 50 percent operational capacity.
