Difficulties in the economy are temporary; impact on economy revealed
MANILA – Finance Secretary Carlos G. Dominguez III said the headwinds faced by the country due to COVID-19 would only be temporary and will probably last until mid-year 2020.
After his meeting with the Economic Cluster at the Department of Finance yesterday afternoon, he said losses in employment and reduction in travel and tourism would last until June this year as former crises, including SARS and MERSCOV only lasted from six to seven months.
Labor and Employment Asst. Secretary Dominique Tutay said they are amenable to flexible work arrangements.
“There are 66 establishments covering 4,735 workers who will begin flexible arrangements while there will be 97 who would temporarily close covering over 300 workers,” Asst. Secretary Tutay said.
She explained the establishments affected by the COVID-19 are into hotel, restaurants and tourism-related sectors and a few in the manufacturing sector. Temporary displacements are from Western and Central Visayas and Southern Mindanao.
During yesterday’s meeting, Asst. Secretary Tutay said 734 displaced workers in Macao.
“Some of them have been terminated,” she added.
Meanwhile, Science and Technology Secretary Fortunato dela Pena said they locally-developed diagnostic kit for COVID-19 has been approved.
“We will just wait for the WHO validation,” Secretary dela Pena said. He explained the test kit was developed and funded by the DOST and made by the UP National Institute of Health in Manila. The diagnostic kit would also screed dengue and leptospirosis and recently, COVID-19.
“It would cost P1,320 per test which includes P200 for the RNA extraction compared to the current cost of P8,000,” Secretary dela Pena added. The developer known as Manila Health Tech now has an inventory of 6,000 test kits.
Socioeconomic Planning Secretary Ernesto M. Pernia said on the macro economy, the tourism and travel sector had a direct hit.
“NEDA estimates the combined impact of the corona virus, the tourism sector would suffer a foregone value added for potential output loss of P93 to 187 billion which is equivalent of 0.4 to 0.9 percent of Gross Domestic Product (GDP), the value of GDP,” Secretary Pernia said.
He explained should the COVID-19 crisis would mean a reduction of 0.5 to 1 percent that would bring down the target of 6.5 to 7.5 percent GDP growth period.
“With the slowdown in economic activities, a reduction in employment from 30,000 to 60,000 jobs would be seen in the Tourism sector,” he explained. He added the country’s monthly headline inflation is expected to increase by 0.1 to 0.2 percentage point.
He also mentioned the three-pronged approach to mitigate the COVID-19 including the government’s focus on public health measures to minimize the duration and contain the spread of the virus. The second approach seeks to rebuild confidence in the economy once it is safe for people to resume normal activities of planning measures by promoting domestic travel and tourism. The third approach is to ensure the country is better prepared for the next epidemic or pandemic through strategic investments in medical field established by the Center for Disease Control including epidemiological research system. (Melo M. Acuña)
Economic Cluster meets the Media. From left to right, DOST Sec. Fortunato dela Pena, DTI Secretary Ramon Lopez. DOH Secretary Francisco T. Duque III, DOF Secretary Carlos G. Dominguez III, Socioeconomic Planning Secretary Ernesto M. Pernia, BSP Deputy Governor Francisco Dakila, Labor Asst. Sec. Dominique Tutay. Not in photo, Tourism Asst. Secretary Roberto Alabado III. (Melo M. Acuna)