How the Filipino Markets were affected by the Pandemic

Wazzup Pilipinas!

The close links between China and the Philippines meant that the latter was always at a high-risk of experiencing a significant Covid-19 outbreak, and this was borne out when the nation became the first to record a case outside the province of Wuhan.

To date, the Philippines has recorded a total of 17,724 cases and 950 deaths, and this should be considered something of a triumph given the challenges faced in flattening the curve of the outbreak and the exponential rise of the virus witnessed in regions such as Europe and now the US.

However, the Philippines has still seen a recent uptick in cases, while considerable damage has been done to the nation’s economy and lucrative tourism sector. In this post, we’ll explore the Philippines' fight against Covid further while asking how the tourism market is faring a little further down the line.

How Has Covid-19 Impacted on the Philippines?

In many ways, the success of fighting Covid-19 within ASEAN is relatively mixed, with many nations having recently seen a recurrence and sustained rise in new cases.

This grouping includes the Philippines, with these nations struggling to successfully curb the spread of the virus and subsequently ease social distancing measures in a way that can directly benefit the economy.

In the case of the Philippines, it’s also fair to surmise that the nation’s economy has been one of the hardest hit in the ASEAN region, thanks largely to its strong dependence on tourism and an influx of visitors from across the globe.

This sector of the economy also boomed noticeably in 2019, when the Philippines recorded a record number of international arrivals (8.2 million) who contributed a staggering $9.31 billion (or 482.15 billion Philippine pesos) in visitor receipts. This was up by 20.81% on 2018’s figures, and there’s no doubt that Covid-19 has impacted this markedly.

In total, Q1 tourism revenue in the Philippines dipped to 35% as a result of the outbreak, creating a huge socio-economic challenge within the region.


What’s Next for the Market?

Fortunately, the road to recovery has already begun, with the Philippines’ Department of Tourism (DoT) focusing its efforts on boosting the domestic market rather than inviting visitors from overseas.

The reason for this is simple; as it provides a responsible way of generating tourism revenues while easily maintaining social distancing measures, while respecting the fact that some nations (such as the UK) currently have international travel restrictions and quarantine measures in place at the border.

This approach has already helped the Philippine peso to rebound somewhat, with this currency now the best performing emerging market currency and one of only two within this grouping to outdo the US dollar.

According to Tickmill, most investors sought flight in the relative safe-haven of the greenback following the Covid-19 outbreak, but this trend is now beginning to reverse slightly in the form of the peso and the Hong Kong dollar.

Ultimately, we’ll have to see whether a return of domestic tourism delivers the requisite hit to the Philippines economy, but for now there’s no doubt that this marketplace is at least at the beginning of a potential recovery after a devastating first financial quarter.