PH ‘20 growth outlook cut due to Covid-19

MANILA – Supply chain issue more than tourism will affect the Philippines due to the impact of coronavirus disease 2019 (Covid-19), a report by S&P Global showed.

In a report dated February 18, the debt rate reduced its 2020 growth projection for the Philippines by 0.1% from 6.2% because of the projected impact of the viral disease that started in Wuhan, China, but kept its 6.4% projection for next year.

It said upstream and downstream flows from China accounts for about 15% of Philippines’ overall trade.

Bulk of the trade with the world’s second largest economy is accounted for by electronics components, which, the report said “may experience region-wide disruptions.”

“The OECD (Organization for Economic Cooperation and Development) estimates that the Philippines domestic value-added in gross reports is over 75% which is high by emerging market standards, although it is likely to be lower in the electronics industry,” it said.

Foreign direct investments (FDIs) inflows from China only accounts for about 3% of Philippines total output, it added.

The report further said Asian monetary officials may implement policy measures to help counter the impact of the disease on their respective economies.

But for the Philippines and Thailand that are less affected, central bank officials may introduce rate cuts but these “may reflect domestic factors rather than the virus.” (PNA)