Boracay closure to have minimal effect on GDP

MANILA -- Socioeconomic Planning Secretary Ernesto Pernia does not see that the sixmonth closure of Boracay Island will be hitting the country’s economy hard since there are other world-class destinations in the Philippines that can serve as alternatives.

Following the meeting of the inter-agency Development Budget Coordination Committee (DBCC) which took place at the offices of the Department of Budget and Management (DBM) in Manila Tuesday, Pernia said Boracay’s closure will slightly hurt Western Visayas’ growth.

“But then, on the other hand, there will be other areas in the Visayas earning some increase in growth rates. Also, Luzon and Mindanao will have some increase,” he said.

He added that the negative effect on tourism income will be temporary, citing that closer to 70 to 75 percent of those who used to go to Boracay will simply find another domestic destination.

Pernia placed at a meager 0.1 percent the likely impact of Boracay’s temporary closure on Gross Domestic Product growth.

“This is the reason we maintained our growth rate for 2018 (at seven to eight percent) because we don’t want to be seen retreating from our targets right away because of the Boracay issue,” he said, adding that with the Department of Tourism, they are motivated to work harder to attract more tourists in the country to other destinations.

President Rodrigo Duterte ordered the closure of Boracay Island after citing the island’s degradation due to irresponsible businesses. He said the island has become a “cesspool,” noting the current situation of its sewerage system.

The island of Boracay, which in 2016 registered more than two million tourists, will be closed for business for up to 6-months beginning April 26, 2018. Authorities said the government is allocating some Php2 billion to aid affected workers, who are placed at a little over 17,000 for registered workers alone.

DBM Secretary Benjamin Diokno said officials from various agencies continue to discuss how to utilize the calamity fund and cited that one option is for the island to be declared as calamity area first.

“Once it’s declared as calamity area then you can use the calamity fund for that,” he said.

He declined to give specifics on how much of the fund would be used, citing that this depends on the number of workers who will avail of the aid.

Diokno said disbursement of the funds will be through the agencies like the Department of Labor and Employment and the Department of Social Welfare and Development, among others.