The International Monetary Fund said Tuesday the 2019 novel coronavirus outbreak that claimed the lives of more than 1,000 individuals in mainland China will have a negative impact on the Philippine economy this year.
IMF resident representative to the Philippines Yongzheng Yang said in a news briefing at the Bangko Sentral ng Pilipinas the spread of the dreaded disease had caused a lot of anxieties and forced travel restrictions that could heavily impact the tourism industry, which is one of the strengths of the domestic economy.
“It looks that way… We do expect a negative impact to the Philippines due to the outbreak,” Yang said.
“China is one of the largest sources of tourists [for the Philippines],” Yang said.
The IMF, however, retained its 6.3-percent growth projection for the Philippine economy in 2020, saying the growth would be driven by higher government spending and supported by the recent monetary policy easing.
The forecast was contained in the conclusion of the 2019 Article IV Consultation on Jan. 27, 2020 with the Philippines by the IMF executive board.
Yang said that taking into account the outbreak of coronavirus and the Taal Volcano eruption in January, the gross domestic product growth could still be “around that range [6.3 percent] in the first quarter of 2020.”
Yang said one of the measures that would counter the impact of the disease on the economy was the Bangko Sentral ng Pilipinas decision to cut the benchmark interest rate by 25 basis points to 3.75 percent.
The economy grew by 5.9 percent in 2019, an eight-year low and missed the target range of 6 percent to 6.5 percent.
The IMF said the Philippine economy continued to be a strong performer despite the recent headwinds. It said prudent policies and structural reforms supported economic activity and macroeconomic stability over the past decade.
It said the Philippines also has the policy space and could adopt a more expansionary macroeconomic policy stance if downside risks became more pronounced.