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On 30 January 2020 the World Health Organization declared that the outbreak of novel

coronavirus constituted a Public Health Emergency of International Concern. On


March 11, 2020 the WHO characterized the novel coronavirus disease (COVID-19) as
a pandemic. As a result, several countries have taken a variety of measures from mass
testing, travel/border restrictions, to lockdowns in a bid to contain the virus.
Governments and central banks have likewise been adjusting the monetary and fiscal
policy to mitigate the economic impact.

This means that we are now in the phase of the crisis where the pandemic has
translated into an economic crisis. In a way that is inevitable since part of the response
to address the pandemic is to slow down economic activity. If we are unsuccessful in
navigating through this pandemic-induced economic crisis, then we enter the social
and political crisis phase.

While there is no way to tell exactly what the economic damage from the global COVID-
19 novel coronavirus pandemic will be, there is widespread agreement among
economists that it will have severe negative impacts on the global economy. Early
estimates predicated that, should the virus become a global pandemic, most major
economies will lose at least 2.4 percent of the value their gross domestic product
(GDP) over 2020, leading economists to already reduce their 2020 forecasts of global
economic growth down from around 3.0 percent to 2.4 percent.

To put this number in perspective, global GDP was estimated at around 86.6 trillion
U.S. dollars in 2019 – meaning that just a 0.4 percent drop in economic growth
amounts to almost 3.5 trillion U.S. dollars in lost economic output. However, these
predictions were made prior to COVID-19 becoming a global pandemic, and before the
implementation of widespread restrictions on social contact to stop the spread of the
virus.

Since then, global stock markets have suffered dramatic falls due to the outbreak, and
reported its largest-ever single day fall of almost 3,000 points on March 16, 2020 –
beating its previous record of 2,300 points that was set only four days earlier.
The economic damage caused by the COVID-19 pandemic is largely driven by a fall
in demand, meaning that there are not consumers to purchase the goods and services
available in the global economy. This dynamic can be clearly seen in heavily affected
industries such as travel and tourism. To slow the spread of the virus, countries placed
restrictions on travel, meaning that many people cannot purchase flights for holidays
or business trips. This reduction in consumer demand causes airlines to lose planned
revenue, meaning they then need to cut their expenses by reducing the number of
flights they operate.

Without government assistance, eventually airlines will also need to reduce lay off staff
to further cut costs. The same dynamic applies to other industries, for example with
falling demand for oil and new cars as daily commutes, social events and holidays are
no longer possible. As companies start cutting staff to make up for lost revenue, the
worry is that this will create a downward economic spiral when these newly
unemployed workers can no longer afford to purchase unaffected goods and services.
To use retail as an example, an increase in unemployment will compound the reduction
in sales that occurred from the closure of shop fronts, cascading the crisis over to the
online retail segment. It is this dynamic that has economists contemplating whether the
COVID-19 pandemic could lead to a global recession on the scale of the Great
Depression.

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 and Philippines exports were to China, the
biggest importer for the country. The Central Bank of the Philippines noted that the
coronavirus outbreak could have a major impact on Philippine economy over the next
few months.
Our government is implementing a three-pronged strategy to mitigate the social and
economic impact of the current global health crisis anchored on providing emergency
aid to marginalized and other vulnerable sectors, protecting health workers while
boosting their capability to defeat the coronavirus pandemic, and keeping the economy
afloat. The primary concern of the government at this time is to ensure that the Filipino
people are able to hurdle the crisis while preparing the economy for its return to
normalcy and quick rebound as soon as the pandemic is over.

Providing economic relief to low-income households and other vulnerable sectors who
need them the most, and providing the necessary support for frontline health workers
in fighting the disease were the main reasons why the President had asked and was
granted by the Congress with special but limited powers to, among others, realign,
reallocate or reprogram savings of items in the 2020 national budget and other legally
available funding sources to support the economy.

As future Customs Broker It is vital that we should be proactive and contribute to


addressing the fast-evolving pandemic that countries are currently facing around the
world. The effectiveness of epidemiological, social, economic, and fiscal measures to
combat the COVID-19 crisis depends not only on the specific measures that
governments implement but also on their timeliness. Customs administration is an
essential service to sustain people’s lives by securing international supply chains,
especially imports of essential goods including COVID-19-related items, as well as
safeguarding tax revenue, the economy and other objectives. In addition, customs will
need to cooperate closely with other government agencies, notably at the borders, to
ensure that public services and processes support the smooth flow of goods.