Regional economies may shrink by 8%

Gov’t assesses impact of ‘Yolanda’ on Visayas

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This photo from the Facebook group Leyte Community Page shows houses destroyed by the strong winds caused by Typhoon Yolanda in Ormoc, Leyte.

The regional economies of Western, Central and Eastern Visayas are expected to contract by as much as 8 percent next year following the devastation caused by Supertyphoon Yolanda.

The process of recovery is expected to take a while and the calamity can cut growth of the overall Philippine economy in 2013 by 0.5 to 1 percentage point.

This was the preliminary estimate of the government’s economic team, which stressed that the Aquino administration’s focus at the moment was on search, rescue, relief and restoration of basic services like water, electricity and communication facilities.

“A very preliminary estimate is that gross domestic product (GDP) in these regions can be down by up to 8 percent next year. Again these are very preliminary estimates,” Finance Secretary Cesar Purisima said yesterday.

He said the estimates were based on past experiences—which showed an average of 20 typhoons entering the country every year and dragging economic growth by a minimum 0.5 percentage point—and existing statistics on the regional economies.

Western, Central and Eastern Visayas regions, which are also referred to as Regions VI, VII and VIII, respectively, together contribute 12.5 percent to the Philippines’ GDP and account for 20 percent of the country’s population.

Budget Secretary Florencio Abad said the government had yet to come up with a more concrete estimate of the cost of damage of the typhoon. As such, it has yet to determine how much the government has to spend for rehabilitation.

“Because of the difficulty of communicating and the inaccessibility of many areas, to date, there has been no sufficient basis to make any assessment on the extent of damage to personal lives and property, businesses, agriculture and infrastructure, both public and private, and their possible impact on the economy,” Abad said yesterday.

Economic Planning Secretary Arsenio Balisacan said the government also would have to assess the impact of the calamity on the household incomes of affected families.

Balisacan said calamities had a tendency to push some nonpoor households below the poverty line because of the loss of income sources and properties. He said government safety nets and assistance programs should be enhanced based on the results of ongoing assessment.

Balisacan, who is also director general of the National Economic and Development Authority, said the impact of the calamity on overall economic growth of the Philippines was less of a concern than on the probability that some households might fall into poverty.

“The concern is on the social impact on affected families,” Balisacan said.

The Philippines has one of the world’s fastest-growing economies, which expanded by 7.6 percent in the first semester from a year ago. The country, however, is also one of the most vulnerable to the ill effects of climate change.

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  • junior tulo

    With so much devastation….economy will shrink 100%.

  • Ehemalige Schatzkanzler Iris

    A massive reconstruction effort might do the opposite and increase GDP. Take this as an opportunity to rebuild Tacloban into a modern day city with electrical lines underground, wider roads, and stronger structures.

    • http://www.personalfinanceapprentice.com/ Carlos PFA

      possible naman, wag lang ma kurakot yung pondo….

    • socali

      I like your optimism, friend. We need to build smarter where we can.

    • alfie_snydz

      allocate PDAF to rebuild the once beautiful city of Tacloban and stir the economy

  • carlcid

    Balisacan knows the score. He once warned PNoy about jobless, non-inclusive growth and got bawled out for it. Now that the chickens may come home to roost, the “growth” narrative so obsessively pursued by PNoy and his drumbeaters will most likely turn out to be a dud. Not that the pursuit of growth is a bad thing, but being obsessed by it for its own sake, and for propaganda purposes, was one-dimensional and misleading.

  • koolkid_inthehouse

    hopefully the real estate sector will not collapse

    • marienkind

      Demand will actually increase for the affected areas. With the infusion of housing funding pouring in I’d be more afraid of a sector bubble than a collapse.

  • upupperclassman

    It does not need to wait until next year for the regional economies in Western, Central and Eastern Visayas to contract. The contraction started since last Thursday, November 7 and has been felt immediately. The contraction is not only 8% and can be as high as 20-25%. The regional contraction will bring down the over all GDP by at least 3%.

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