Economic Impact of Covid-19 Part 4: Numbers

By Art Jimenez

Still two weeks from the April 30 lapse of the extended ECQ in Luzon and by adoption, here and much of the country, some cabinet officials, legislators, LGUs and the people have been agitating for its non-extension by end-April.

Workers need to return to their jobs, business need sales, transport firms need to move people, government needs taxes to avoid further deficits, and so forth.

The masa are restless, stressed, and distressed. They could be vulnerable to agitators and swayed into a mob if their pockets remain empty from being out of job and from empty promises up to the uncertain future.

Economists, egged on by their businessmen employers, prefer not to see the economy sink any further and deeper. How deep is the hole that Covid-19 led and leading us to?

So let’s look at some numbers.

 

MSMEs

The quarantine, enhanced quarantine, and extended quarantine effectively shut down the doors of micro, small, medium enterprises (MSMEs) numbering 998,342, as of the last count of the Philippine Statistics Authority. DOLE estimated that 1,428,841 workers have been displaced from 52,993 establishments. Guess how many will become jobless if even half of the nearly 1 million MSMEs closed shop. Guess again: how much sales was lost by the closed MSMEs?

Tourism

The Philippines’ tourism revenue has reached US$9.31 billion from 8.3 million tourists last year. The figure was 20.8 percent higher than the US$7.71 billion earned in 2018 from 7.2 million tourists. With the Luzon lockdown and international and domestic travel restrictions (air, sea, and land), we could expect tourism and travel lose much of the above tourists and income during the lockdown from March to end of April.

Tourism Secretary Bernadette Romulo-Puyat was certain 2020 tourism arrival and, therefore revenue, would go south but was uncertain as to DOT’s forecast. However, the National Economic and Development Authority (NEDA) had estimated tourism arrival this year, 2020, could decrease by 1.4 million or around tourism’s 2016 level. Opportunity cost for such reduction in inbound tourists was estimated at between PhP93 billion and PhP187 billion.

Meantime, jobs lost in the industry would come to between 30,0000 and 50,000.

 

Government Revenues

The BIR and the Bureau of Customs (BOC) are the primary revenue raisers of the Philippine government. Latest data from both agencies show the following.

Their combined revenue for January to March 2020 amounted to “only” PhP600.9 billion. It is PhP152.3 billion short of target take for the same three-month period.

Finance Secretary Carlos Dominguez placed at PhP286.4 billion the revenue shortfall for the entire year owing to the community quarantine.

To be continued