Coronavirus in Philippines: The COVID-19 risk, impact and measures

Praveen Duddu

31 March 2020 (Last Updated September 7th, 2020 13:22)

Philippines, one of the high-risk countries from the Wuhan coronavirus outbreak, recorded the first
death outside China. The government has announced lock-down of Metro Manila, followed by the entire
Luzon island and is mulling over more localised lock-downs. The Philippines government declared a state
of calamity in the country for six months on 17 March.

When did coronavirus reach the Philippines?

The first case of novel coronavirus (2019-nCoV, now COVID-19) in the Philippines was confirmed on 30
January 2020, in a 38-year old woman who arrived from Wuhan. Two days later, the Philippines
recorded the first death outside China on 01 February 2020.

The Philippines government declared a health emergency on 09 March, following a spike in new
confirmed cases and local transmission. The move will release funds to local governments and
healthcare officials to handle any further surge in cases.

The COVID-19 Code Alert system was revised upwards to Red Sublevel 2 on 12 March.

Coronavirus: Philippines COVID-19 cases and deaths

As of 31 March, the total Philippines coronavirus cases stand at 1,546. One of the coronavirus-confirmed
on 06 March was confirmed to be a human-to-human transmission putting the nation on a high alert.
The man attended prayer in late February, which increases the concerns of possible transmission to
other devotees who attended the same.

The country’s first death was of a 44-year old Chinese national, who was the relative of the first patient
diagnosed with COVID-19. The patient developed severe pneumonia. A total of 78 deaths have been
reported in the country.

Coronavirus-affected Filipinos on Diamond Princess cruise ship

Seven passengers onboard the Diamond Princess cruise ship and more than half of the crew are from
the Philippines, among who 80 have been confirmed to have contracted the virus.

The Philippines government repatriated 445 of its citizens onboard the ship including ten recovered
cases on 25 February. The evacuees have been placed under a two-week quarantine at New Clark City in
Capas.

A total of 70 confirmed cases were not allowed to board the evacuation flight.

How risky is coronavirus to the Philippines?

Due to its proximity to China, the Philippines is at a far greater risk of witnessing increased cases of the
novel coronavirus infection compared to other countries.

The Philippines is also home to hundreds of workers from China working in the Philippine Offshore
Gambling Operation (firms offering online gambling services). More than 230,000 migrant Filippinos
often referred to as Overseas Filipino Workers (OFW) are also working in China particularly Hong Kong
and Macau as household workers.

A temporary ban was imposed on the workers from travelling to China or its special administrative
regions after the coronavirus outbreak on 2 February. The ban was lifted on 18th February allowing
OFWs to return to Hong Kong and Macau.
Manila is among the top 30 global cities receiving airline passengers from 18 high-risk cities in China,
according to WorldPop which ranked Philippines 14th among the 30 high-risk countries.

Chinese nationals account for the majority of the tourist population visiting the country as trade and
cultural relations have increased between the two countries in the recent past.

State of calamity declared

The Philippines government announced the entire country will be placed under a state of calamity for a
period of six months. The declaration will enable national and local governments to quickly access relief
funds to curb the spread of the disease.

A state of calamity was first declared for Quezon city due to coronavirus on 13 March.

Lock-down of affected areas

The Philippines government started announcing local lock-downs (home quarantine) following the
increase in global coronavirus cases. The entire Luzon island is locked-down affecting more than 50
million people. The lock-down prohibits people from going outside their homes except for getting basic
necessities.

Metro Manila lock-down was announced on 12 March and will continue until 14 April, while similar
quarantine measures are expected in Bohol and Cainta provinces. Davao City has imposed travel
restrictions.

Quarantining (lock-down) will be imposed in the Philippines barangays, municipalities/cities and

What Metro Manila lock-down means for residents and visitors

During the lock-down, domestic transportation of all modes including land, air, and sea are suspended.
Residents are not allowed to leave their homes unless for emergencies. Large gatherings, parties and
concerts are banned.
Thousands of police officers and military personnel have been deployed to ensure that citizens comply
with the lock-down. Checkpoints have been placed at all entry points to Manila to check people for
temperatures with thermal scanners.

Preventive measures by the Philippines government

The Philippines government is taking several steps to control the spread of the virus, including travel
restrictions, closure of schools and colleges, as well as training schools of the Philippines National Police.

Educational institutes in the country are announced to be closed from 09 March to 15 March, whereas
in Metro Manila the classes will be suspended until 12 April.

Stringent social distancing measures will be in place in the National Capital Region (NCR) for 30 days
from 15 March.

The government announced earlier on 2 February 2020 that all persons except Filipino citizens and
permanent resident visa holders were temporarily barred from entering the country.

A temporary ban on Filipinos from travelling to China or its special administrative region was also
imposed. A mandatory 14-day quarantine for Filipinos returning to from China or its special
administrative region was announced.

Further, visa upon arrival for Chinese nationals has been temporarily suspended.

An adviser to the President of Philippines as advised that the government should move to a barangay-
based quarantine system after the lock-down on Luzon ends to save the economy. He noted that
employees involved in production will not be required to carry passes or IDs and security checkpoints
should be removed to enable cargo to move freely.

Travel ban to South Korea

Further, people from the affected regions of South Korea including Gyeongbuk, Daegu and Cheongdo
have been banned from entering into the country.

Coronavirus in the Philippines: Measures at airports

The Philippines Government announced travel restrictions to and from China, Hong Kong, and Macau to
minimise the spread. It also banned the entry of passengers from the three countries.

Airlines cancelled flights from the Philippines to China resulting in stranding.

Face masks shortage – importing from India and Thailand

The Philippines witnessed a surge in demand for face masks as fears over the coronavirus infection
increased, despite assurance from the government that there is no need to wear face masks yet.

The government reiterated that healthcare workers and patients with symptoms of the disease should
be given priority for masks.

The Philippines International Trading Corporation (PITC), meanwhile, identified two face mask suppliers
from India and Thailand to meet the demand for face masks.

The suppliers are expected to take more than 30 days to supply the masks. The India-based supplier is
expected to supply one million units, while the exact number of face masks that the Thailand-based
supplier can supply is yet to be determined.

The masks will be imported either by the DoH or the PITC.

Impact on the economy

Philippines witnessed a slower economic growth in the first half of 2019, compared to 2018. The country
saw a sustained economic growth of 6.3% between 2010 and 2018, while the growth slowed down to
5.5% in H2 2019. The World Bank estimates Philippines to witness full-year 2019 economic growth of
5.8%.

The ongoing coronavirus impact is expected to result in a subdued growth for the economy in 2020.
China is Philippines’ top trading partner accounting for 18.8% of total trade, according to the Philippine
Statistics Authority (PSA). In November 2019, 22.9% of Philippines’ exports were to China, the biggest
importer for the country.

Philippines imports account for approximately 20% of goods from China followed by Korea and Japan at
10% each.

The Central Bank of the Philippines (BSP) noted that the coronavirus outbreak could have a major
impact on Philippine economy over the next few months.

Ruben Carlo Asuncion, chief economist for Union Bank of the Philippines, noted that the coronavirus
outbreak could cost the Philippine economy $600m or 0.8% of economic growth if it lasts for six months,
as quoted by CNN Philippines.

Fiscal measures to contain the coronavirus impact

With more than 400 economic zones under lock-down, approximately 700 factories have been shut
down displacing hundreds of workers. The Philippines government is a stimulus package of
approximately 200 billion pesos ($3.93bn) to protect the citizens and businesses from the impact of the
coronavirus outbreak. The funds are expected to drawn from non-budgetary sources.

The central bank announced its decision to reduce interest rate on reverse repurchase (RRP) facility by
25 basis points to 3.75% on 06 February 2020. The interest rate on overnight lending and deposit
facilities was also cut to 4.25% and 3.25%, respectively.

The interest rate on RRP was further reduced by 50 basis points to 3.25% on 17 March.

The projected gross domestic growth rate of 6.5%-7.5% for 2020, however, has not been revised.

The Philippines has announced that it will direct P200bn ($20bn) in emergency subsidies to 18 million
poor households. Families will be provided P5,000 ($99) to P8,000 ($110) for two months based on the
minimum daily wage rates in their respective regions.
The Bangko Sentral ng Pilipinas Department of Economic Research has approved a P300bn ($6m) bond
repurchase deal to provide the government with funds to fight the COVID-19 pandemic.

The Asian Development Bank provided $3m in aid to the country and is also planning to provide another
assistance package.

Impact on tourism

Tourism industry is a major contributor, accounting for 12.7% of the Philippine economy in 2018,
according to data from the Philippines Statistics Authority. More than seven million foreign tourists
visited the country during the first ten months of 2019.

Chinese tourists account for majority of Philippines’ tourist population. During the first ten months of
2019, a total of 1.49 million Chinese tourists visited the Philippines, according to the Department of
Tourism (DOT). Philippine tourism officials expected to attract four million Chinese tourists by 2022,
before the outbreak happened.

The tourism industry, however, is expected to witness a major impact as the country closed its borders
with China and other countries due to the coronavirus infection, Philippine Finance Secretary Carlos
Dominguez noted.

Dominguez added that the exact economic impact of the outbreak is too early to be estimated but
remained optimistic that the country can sustain its economic growth.

Impact on businesses

Airline operators have impacted by the coronavirus due to grounding of flights. They have requested the
government to provide assistance in the form of handouts, emergency credit lines and the exemption
from navigation and airport fees.
Mining operations of two mining companies in the Surigao del Norte province, which is home to
majority of the country’s nickel mines, will be suspended from 01 April 1 to prevent the spread of the
coronavirus.

The Philippines is an alternative source of nickle for China, which sources the ore from Indonesia.
Following the ban of export of unprocessed ore imposed by Indonesia, the Philippines serves as the
main supplier.

The two mining companies, Nickel Asia Corp and Global Ferronickel Holdings, account for majority of the
country’s nickel ore output. The suspension is expected to impact the scheduled ore shipments of the
companies.