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Economics On Pandemic

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58 views1 page

Economics On Pandemic

Uploaded by

jasslyne
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The ongoing spread of the new coronavirus has become one of the biggest threats to the economy and

financial markets. As COVID-19 continues its spread across the world, its economic impact has become
more and more evident. Travel industries, such as airlines and hotels, have been hit hard, and events
continue to be cancelled left and right to prevent the spread of the virus. Supply chains have been
disrupted, trade linkages have slowed down, and business travel has practically come to a stop. The
economic impact of COVID-19 can be broken down into two areas of concern: Supply-side and Demand-
side.

The first area of concern is in supply side. The fear of the disease as well as strict Chinese controls on the
movement of people has profoundly slowed China’s domestic economy. Industrial output has slowed
down and so has consumer spending, and both will continue to slow for as long as the epidemic carries
on.

China is a major export market; it is, in fact, the Philippines’ biggest trading partner. Any slowdown in
the Chinese economy will reduce exports, which will, in turn, have negative follow-on effects throughout
our own economy if the slowdown persists. China is also a major source of imports; reduced supplies of
consumer goods and manufacturing inputs will impose constraints here on consumption, which will
eventually be reflected in slower gross domestic product or growth.

The second area of concern is a demand-side. This is now evident in our country as tourism declined and
people avoid large gatherings. The result is less retail activity, empty hotels, vacant tourist attractions as
well as the cancelling of sporting events. While the spread of the virus has increased on-line demand for
goods and services, this had not been enough to compensate for the decline in in-store activity. The
National Economic and Development Authority said two days ago that if tourist arrivals would continue
to deplete until June amid COVID-19 situation, the total number of visitors to the country might drop by
1.42 million, resulting in billions of pesos in losses in the tourism industry.

It is undeniable that the pandemic COVID-19 has a significant impact not just in Philippines but
throughout the world. The coronavirus crisis is a story with an unclear ending. What is clear is that the
human impact is already tragic, and that companies and government have an imperative to act
immediately to protect their peope, employees, address business challenges and risks, and help to
mitigate the outbreak in whatever ways they can.

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