MANILA, Philippines – (UPDATE) Powerful storms that claimed nearly 1,000 lives in the Philippines have also taken a heavy toll on the nation's economy, with the impoverished Southeast Asian nation expected to take years to recover.

The twin storms that pounded the main Luzon Island with record rains over the past month caused billions of dollars in damage, and the government has said it will have to go further into debt to fund the reconstruction effort.

"This crisis is by no means over. In some ways the hard work is just starting," the United Nations' humanitarian chief, John Holmes, warned last week as he toured some of the devastated areas of the nation's capital.

Indeed, just ending the flooding that still consumes whole districts on the outskirts of the capital, Manila, will take months, officials say, and tens of thousands of business people and farmers have lost their livelihoods.

Tens of millions of dollars are going to have to be spent on repairing roads, bridges and other vital infrastructure across Luzon, while badly damaged hospitals and schools will also have to be repaired or rebuilt.

Finance Secretary Margarito Teves said the government's budget deficit may balloon to 300 billion pesos (6.4 billion dollars) this year to meet the damage bill, up from a deficit target of 250 billion pesos before the storms.

The Philippines sold $1billion bonds on Friday to raise much-needed funds, and President Gloria Macapagal-Arroyo said last week the government would have to raise more money in the coming months.

Teves also warned economic growth this year could fall to 0.4-1.4 percent because of the storms, from an earlier forecast of 0.8-1.8 percent, although the downgraded target has yet to be made official.

Tropical storm Ketsana (Philippine codename: Ondoy) dumped the heaviest single day of rains in more than four decades on Manila and surrounding areas on September 26, killing 420 people and causing nearly 100 more deaths from ensuing disease outbreaks.

Typhoon Parma (Philippine codename: Pepeng) hit northern Luzon exactly a week later and hovered over the region for a week as a tropical storm, triggering landslides and floods that left at least 438 people dead.

The government said the storms caused at least P22.83 billion in damage to agriculture and infrastructure.

But it acknowledged that was a conservative assessment which did not include the thousands of homes and businesses that were devastated.

In one flooded Manila district, fruit vendor Rey Rendaya, 52, represented countless other small businessmen when he said the flooding would push him further into debt.

"This business has no insurance and the capital I used to open this up was from a loan shark," Rendaya said as he hammered into place a rusted corrugated tin roof that he salvaged from the flood debris.

Meanwhile, tens of thousands of farmers north of Manila – one of the country's rice bowls – are equally distressed after losing their rice crops just days ahead of harvest.

The Philippines, already the world's biggest importer of rice, will have to buy more to cover the storm-induced shortfall, according to Agriculture Secretary Arthur Yap.

Nevertheless, there are some reasons for optimism. One of the strongest is that the nation's vital export sector was largely spared.

"There weren't that many industries that were hit," said the head of the country's export industry association, Sergio Ortiz-Luis.

Of particular relief was that the factories pumping out electronic products, which account for half the nation's exports, were not badly affected, according to Ortiz-Luis.

Meanwhile, government planners are looking to the fertile regions of the Visayas in the central Philippines and Mindanao in the south, both of which escaped the storms unscathed, to make up for the reduced output in Luzon.

The Philippines is also counting on its old economic savior –the nine million Filipino workers overseas who remit money back home to help relatives and friends.

"Because of the storm damage, a lot of remittance companies have experienced a strong inflow of dollars back to the Philippines," said Nestor Aguila of DA Market Securities.

Before the storms hit, remittances for the first eight months of 2009 had already risen 3.7 percent year-on-year to $11.34 billion, according to official figures.