The city government is bracing for the economic slowdown as tourist arrivals in the city continue to decline as a fallout of the fuel supply disruption due to the Middle East war.
Mayor Benjamin Magalong said an economic continuity plan is currently in the works and now being finalized following consultations and workshops with stakeholders from the business, tourism, and transport sectors.
The plan aims to address identified risks and outline solutions of each of the affected sectors to help sustain economic activity amid the downturn.
The mayor said the proposed measures will be discussed further in upcoming management committee meetings, along with separate consultations focused on providing additional support to local businesses.
“As we navigate the economic challenges ahead, we remain hopeful that proactive measures and collaboration among sectors will help cushion the impact on the city’s economy,” the mayor said.
The mayor reported on how the ongoing conflict is affecting the city’s economy which is largely tourism-driven.
He said data from the Baguio Tourism Council showed that tourist arrivals have dropped by as much as 40 to 50 percent in recent weeks.
Accommodation facilities across the city have also experienced a general decrease in occupancy rates by 40 to 50 percent, reflecting the broader slowdown in visitor activity.
The downturn is already affecting the local economy, with projections indicating that tourist arrivals could fall even further—possibly reaching a 60 percent drop in the coming weeks.
The mayor said this decline is expected to impact revenues, which may be reflected in next year’s financial performance.
Despite the challenges, the mayor expressed confidence that the city can manage the situation, drawing lessons from its response during the COVID-19 pandemic. However, he noted that the current situation differs, particularly as it coincides with an ongoing energy crisis.
He said economic indicators also show a downward trend. From a 5.6 percent growth rate in the second quarter of last year, the city’s gross domestic product (GDP) has slowed to 4.4 percent, with projections suggesting it could dip below 3 percent in the first quarter of the year.
“This is why we need to adopt new strategies to stimulate economic activity, particularly to support micro, small, and medium enterprises (MSMEs), which are among the most affected sectors,” the mayor said. ** Aileen P. Refuerzo
