Page last updated at 02:10 CST6CDT, Thursday, 09 July 2020 PH
The fourth F (fun that refers to tourism and entertainment) is the one that will suffer the greatest decline. The International Airport Transport Authority (IATA) estimated that there could be a fall of as much as 36 percent in 2020 of air travel resulting in a $3.75 billion hit in GDP. These figures represent a fall of some 21.8 million passengers representing revenue losses of $3.5 billion to the airlines. The ECQ in Luzon alone affected 30,000 flights or 5 million passengers. It was estimated that PAL and Cebu Pacific reduced their work force by 500 jobs over the two months of the lockdown. It has been suggested by IATA that governments should consider supporting the airlines by ensuring cash flow through the provision of direct financial support, facilitation of loans, loan guarantees and support from the corporate bond market. Travel from and to the Philippines will take at least two years to return to normal. In the meantime, even President Duterte himself has suggested that there should be a concerted effort of the government and the private sector to promote domestic tourism. Data on domestic tourism in the past show that some 60 million Filipinos from middle-income and high-income households are the first tourists in their own country. Once there will be more freedom of movement from one island to another, we can expect Filipino families to channel their irresistible urge to travel towards domestic tourism, especially with improved access to numerous very attractive destinations all over the Archipelago, such as Panglao, Siargao, Palawan, Siquijor, Camiguin, Kalamgaman, Pagudpud, etc. etc. For the Metro Manila crowd, the most frequented destination for domestic tourism will be the province of Batangas. The Build, Build, Build program is helping to improve access from one island to another, following the success of the Philippine Nautical Highway that was an important contribution of the Administration of former President Gloria Macapagal Arroyo.
In contrast with Travel and Tourism, the “Entertainment” part of “Fun” can recover more quickly once the pandemic is licked either through a discovery of a cure or a vaccine. One can already observe in the cities where the virus has been brought under control in countries like China, Taiwan and South Korea that restaurants, shopping malls, theaters, museums, amusement parks, sports stadia and other venues where public events are held are already opening up. As long as the health authorities give the go signal allowing for people to congregate in public events, as night follows day i am sure that fun-loving Filipinos will not hesitate to once again celebrate weddings, baptisms, birthday parties, sports events, concerts, and other public ways of having fun. I can say the same thing about religious events like pilgrimages, Masses, Novenas and other ways of manifesting their faith. No matter how we talk about a “new normal” prevailing after this nightmare, Filipinos will always revert to the “old normal” of congregating to show their love for God, for one another and for life. It is not for nothing that we rank very high, not in Gross Domestic Product, but in Gross National Happiness.
As the Philippine economy graduates from a low middle-income economy (average annual per capita income of $1,000 to $3,000) to a high-middle income one ( $4,000 to $10,000), consumer demand will increasingly shift from the basic goods of food, shelter, clothing and leisure to the other F’s of consumption goods and services, which are Fitness, Facebook and Formation. Predictably, the largest increase in consumer expenditures (whether privately or publicly financed) during the next two years until COVID-19 is effectively under control have to do with health services, especially on the curative side such as hospitalization expenses, pharmaceuticals, medical fees, etc. To get an idea of the types of products that will be in great demand for as long as the pandemic has not been completely eradicated, let me quote from the report of Dr. Henry Echeverri, Chair of the UP Medical Alumni Society America on the very impressive response of the Philippine General Hospital (PGH) to the COVID-19 challenge as described in a webinar by PGH Director, Dr. Gap Legaspi. Let me quote from the report: “Our own fight within the PGH is something to be proud of. With the expertise and hard work of our internists, Pulmonologists, and ICU personnel, a 50% de-escalation of severely ill is the norm. Out of the more than 160 severely ill COVID patients, 37 have now been discharged improved. Eleven beds out of 20 are occupied in the ICU because most die upon arrival or upon transfer to the bed. The rest are prevented from getting critical with aggressive treatment from our Pulmonory experts using high flow nasal cannulas, bronchial toilet, and availability of medicines from Hydroxychloroquin, LIpolivir, Tocilizumab and others. Our Hematology Department has started using convalescent plasma for treatment.”
This brief portion of the PGH report would give us an idea of the types of products that would be in great demand for as long as the Corona virus would be rampant. Medical equipment and pharmaceutical products would be in great demand for at least the next two or even more years. We should also mention the products that belong to the preventive measures such as face masks, gloves, disinfectants and a host of Physical Protective Equipment (PPE). In addition, there are both the synthetic and natural products that boost immunity such as ascorbic acid and a myriad of Vitamin products. We can also include among the preventive measures such goods and services that improve the physical fitness of the human body, such as physical exercise machines and all types of sports equipment. All these would constitute the Fitness part of the demand for consumer goods and services. To be continued.