WITH businesses temporarily shutting down, consumers cutting down on expenses and tourism counting its losses, the economy is looking to be heading south, no thanks to the coronavirus pandemic.
Quarantine measures and orders to stay home are pushing businesses in Cebu to stop their operations for the meantime. And it’s costing the economy.
“The long- and short-term economic impact of the novel coronavirus depend on how long it will stay with us,” said Fernando Fajardo, economics professor at the University of San Carlos.
The economic downturn is here to stay if the virus is not contained well, and people may not see things get back to normal soon.
Unless the government moves to flatten the curve, economic losses may even get worse.
“As to the economy, it will be greatly impacted negatively through losses in production, jobs and income in a multiple manner as the demand for goods and services will also decline as a consequence of lost jobs and income. Lack of demand discourages production,” the Cebuano economist said.
The Philippines continues to see a rise in Covid-19 cases, and Cebu is at risk if it is not able to manage the situation well.
“We will only see the light at the end of the tunnel once we succeed in flattening the curve by reducing the number of cases and deaths until there is no more,” he said.
“Flattening the curve also depends on how resolute and effective we are in fighting the virus, both through extensive testing of suspected cases and treatment of confirmed cases and in preventing widespread infection through social distancing and home confinement,” he added.
“As long as we are unable to do our normal productive activities, the economy is doomed,” Fajardo pointed out. “It’s going south for almost everything.”
Many businesses in Cebu, particularly malls and other commercial centers, have temporarily closed doors following a government order.
Hotels have also been suffering dismal occupancy as travel restrictions keep tourists away and locals stay in their homes.
Some workers are losing their jobs.
And whether the economy would be able to recover is a question of how and when.
“The impact of the virus on consumption behavior for Filipinos will also be substantial with fear of contagion likely limiting the number and length of mall visits with possible shift to grocery purchases or food deliver as opposed to malling,” ING Bank senior economist Nicholas Antonio Mapa said.
The Covid-19 global outbreak has already hurt the economic prospects, with restrictions on trade, business activity and travel.
Lower incomes resulting from foregone economic activity will weigh much on Cebu’s growth this year.