Impact of Taal eruption in pesos and cents: Not even 1 percent of Calabarzon economy

The eruption of Taal Volcano last Jan. 12 led to an estimated P4.3 billion in forgone income across four key industries in the Calabarzon region.

The National Economic and Development Authority (Neda), however, said the damage to regional and national economy and its impact on poverty-reduction programs would be minimal.

In an initial assessment, the Neda estimated forgone income in Calabarzon areas within the 14-km radius danger zone was not even 1 percent of Calabarzon’s gross regional domestic product in 2018.

Last week, Socioeconomic Planning Secretary and Neda chief Ernesto M.

Pernia said initial assessment showed that  economic impact of the eruption was about P7.63 billion.

Socioeconomic Planning Undersecretary Adoracion M. Navarro explained the discrepancy in figures.

The latest estimate was lower than Pernia’s  “because our assumption then was based on the fear that there will be violent volcanic eruptions,” Navarro said.

“So we assumed a longer closure period of establishments,” she said.

The estimates were adjusted because some businesses had already opened “and we also got a clearer picture,” she added.

The Philippine Institute of Volcanology and Seismology (Phivolcs) had identified the high-risk areas within the 14-km radius to include these cities and towns in Batangas and Cavite: Agoncillo, Alitagtag, Balete, Cuenca, Laurel, Lemery, Lipa City, Malvar, Mataas Na Kahoy, San Jose, San Nicolas, Santa Teresita, Taal, Tagaytay City, Tanauan City and Talisay.

A 2015 set of data from the Philippine Statistics Authority (PSA) estimated the population in evacuated villages to exceed 393,000.

Citing Department of Agriculture (DA) data, forgone income in the agriculture and fishery sectors amounted to P3.2 billion or 2.32 percent of the 2018 gross value added (GVA), or amount of goods produced, of Calabarzon’s agriculture, fishery and forestry sectors.

Neda said at least 2,761 sustenance farmers depend on Taal Lake for livelihood.

“The lake is predominantly used for fisheries,” Neda said.

The lake also is key to recreation, tourism, navigation, source of water, irrigation and as a source of duck feed, the agency added.

“As a major tourist destination area, the lake is used for sight-seeing, boating, swimming, sailing and water skiing,” Neda added.

In the industry sector, foregone income reached P357.3 million or 0.02

percent of the sector’s GVA in the Calabarzon region in 2018.

Forgone income in the services sector was estimated at P789.1 million or just 0.08 percent of GVA for services in the region.

Navarro said she doesn’t see any major impact on the economy unless there’s a violent eruption.

The damage estimate, she added, was just for forgone revenue. It didn’t include damage to structures and other assets, she added.

Pernia said disasters aren’t all doom and gloom as these also spawn economic activity “in terms of reconstruction and rehabilitation.”

These, he said, were “going to create jobs and stimulate the economy.”

“Government spending will be substantial,” Pernia said.

“The multiplier effects [will] at least partly compensate for the forgone income,” he said.

Taal’s eruption will also “have a momentary or passing effect on poverty, but in the end poverty will continue to [go] down,” Pernia added.

He said if any people were to “slide to poverty, it will be temporary.”

It also helps that Batangas and Cavite, where the volcano straddles borders, are well-off provinces, Pernia added.

Edited by TSB