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Viral economy

"Many industries are already feeling the effects of the COVID-19 scare."

 

That this year will be a most challenging one not only for the country but the world is beyond question. Not just because of the COVID-19 virus scare, although that has made it even more so. One recalls that in 2019, the tell-tale signs of a global economic downturn were already on the rise as disruptive developments then resulting from the unresolved conflicts in the Middle East, to the lingering concerns over Brexit, to the spiralling US-China trade war to the Australian bush fires and to the escalation of the arms race with the increased possibility of the scuttling of the nuclear arms treaty, among others, clouded any attempts to stabilize and move forward.

And now the COVID-19. 

Although leaders the world over are facing this wildly spreading virus with courage and strong determination to slay the beast, and rev up the growth engines at the soonest possible time, it will not be as smooth and easy as some people would have it. It will be hard and will take time for the world to move on.          

Take the case of the global tourism and hospitality industry. With lockdowns and travel bans all over the place and, get this, with no end in sight, the potential losses across the board in all countries—even in the most isolated ones—are simply incalculable. Coming as it does right after the Taal explosion, it has really been pummeled no end. The most evident scene is in the transport sector where airlines to cruise ships to trains, buses, cars and other land transport are already howling about the huge losses they expect to suffer as a result of the slowdown in travel.

In the Philippines alone, Tourism Secretary Berna Romulo-Puyat has come out with a rough estimate of at least P25 billion in losses so far. That's huge, and I think that may even be on the bright side considering the ancillary industries which support and are attached to the sector, especially in the provinces. Already, we are seeing posts of empty chairs and empty tables in hotels and restaurants even in the urban areas—eerily reminiscent of the war-torn places in conflict areas.  

No less than the country's (warring?) tourism leaders have banded together to unveil an accelerated "Visit the Philippines, Part 2" plan covering reduction in tourist packages, air fares, hotel room rates and other incidentals to encourage domestic travelers to do their share in minimizing the impact of the virus scare on the industry. More than that, Puyat has also urged all LGUs to proceed with their regularly scheduled festivals, the schools with their athletic meets and other gatherings and all other sectors with their scheduled seminars, conventions and get togethers. 

So concerned has the government been about the immediate impact of a slowdown in this sector that the President himself has come out openly inviting one and all to join him in "visiting" the nooks and crannies of the country. Indeed, there is an urgency in ensuring that this sector steadies soon. For it is not just the monetary losses we are looking at here but the prolonged job losses which come in their wake.  

Of course, if we talk about tourism and the hospitality industry, we cannot leave out the gaming and entertainment sub-sector which has its own dynamics. Already, we have certain officials stumping hard on the "POGOs"—the most recent phenomenon in an increasingly lucrative and employment rich section—without as much as advising one and all about the immediate impact of such an abrupt action. 

And this is just the tourism and hospitality industry. We can go on and on enumerating the woes being lamented by leaders of industries and sectors impacted heavily by the COVID-19 scare. There is the migrant workers and overseas diaspora of almost 10 million Filipinos which in 2019 remitted a record $33 billion to the country. The virus scare has certainly limited their movements and their earning capacities. In fact, our overseas workers have been very vocal about their loss of income and possibly even their very employment if we do not consider partially lifting the travel ban specially for the countries where the highest number of Filipino workers are deployed.

How about in health and education, as we get more and more hits not just from the traditional illnesses which go with the weather and the period of the year. A lot of guesses on the impact of the scare on these sectors have been given out. Again, we have to hold our breath. And then there are our export and import sectors, specially with our largest trading partner—China—and the top five or top ten countries we do business with. Definitely, our trading flows will take a hit. By how much, we will still have to account for. Supply chains will break down, orders will lessen and so on and on, down the road.

Certainly, these will run in the billions, if not multi-billions. And again, the impact on employment of these disruptions will be huge even if we try our best to contain the same. 

Which is why we have to caution our economic managers not to play down the impact of this viral scare to the point of being unbelievable. As much as possible, let us be realistic about things and start coming out with the needed coping measures to cushion us from any more damages than we can handle. This is the time to get all hands on deck and check out the best possible ways we can save the economy from spiraling out of control. This is not the time to issue rosier-than-proper prognosis about things. This is the time to get down to the ground, sector-by-sector, stakeholder-by-stakeholder, and make the needed coping measures work. The sooner, the better.

Topics: Jonathan Dela Cruz , Viral economy , COVID-19 , global economy , Tourism Secretary Berna Romulo-Puyat
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