Regional economies may shrink by 8%
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.