China Reopening to Have Minimal Impact on PH Economy

The reopening of China can trigger a surge in tourists in Southeast Asia but this can have only a small impact on the economy of the Philippines according to analysts.

“Though China’s reopening will bring more tourists to Southeast Asia in general, this will likely have only second-order impacts on the Philippine economy overall,” mentioned S&P Global Ratings Senior Economist Vincent Conti.

The reopening of China’s borders last January indicated the possibility of Chinese tourists visiting Southeast Asian countries.

In a report, S&P stated that emerging markets (EMs) that have previously recorded big numbers of tourists from China “could benefit significantly as travel picks up after a couple of years of virtually no outbound Chinese tourism.”

“The EMs that will benefit the most from China’s lifting of COVID-19 restrictions are those that are exposed to China’s consumption, especially tourism-related. These are mostly EMs in Asia, and include Thailand and Vietnam,” mentioned S&P in their report titled “Which Emerging Markets Benefit the Most From a Reopening in China.”

For countries such as the Philippines, Thailand, and Vietnam, S&P reported that at least one out of every five tourist arrivals came from China before the pandemic.

Before the pandemic, Chinese tourists made up over 21.1% or 1.74 million out of the 8.26 million total arrivals in the Philippines back in 2019. For 2022, Chinese tourists accounted for only 1.49% or 39,627 out of the 2.65 million total arrivals.

Mr. Conti mentioned that the Philippines is “more domestically driven,” specifically by household consumption as compared to other tourism-driven economies. 

Source: Business World