Economy to weather impact of typhoons

MANILA, Philippines - The natural disasters that recently struck the country will have only minimal effect on the local economy, according to the finance department’s newly-appointed chief economist.

 â€œLosses from the two major typhoons that hit the country in the third quarter can be recovered,” Finance Undersecretary Gil Beltran said.

He noted that while natural disasters tend to have a significant impact on productivity in the short-term, the damage is likely to be limited provided that there is a timely and well-organized rebuilding process.

He cited the Department of Agriculture’s replanting program which would allow some farmers to harvest by November instead of the usual September.

Most of the farms, particularly in Region 3 (Central Luzon), are covered by crop insurance as well, he added.

According to the DA, the combined damage to agriculture by typhoons  Labuyo and Maring reached P2.6 billion, equivalent to 0.09 percent of the projected third quarter gross domestic product (GDP).

In the first quarter, the Philippine economy expanded 7.8 percent making it the fastest-growing economy in Asia, mainly driven by robust manufacturing and construction sectors  and increased consumer spending.

The agriculture sector accounts for a 10th of economic output.

The government is expected to release the second quarter GDP results next week.

As for other sectors such as manufacturing, Beltran said losses are still being estimated “but supposed earnings from the two-day work suspension can be recovered in the next few weeks.”

As for damage to infrastructure, Beltran said “ample fiscal space” would enable the national government – through the Department of Public Works and Highways – to do repairs “without bloating the budget deficit.”

The Aquino administration incurred a deficit of P51.29 billion as of end-June, well below the official ceiling of P84.656 billion for the period.

Beltran noted that the country has surplus savings to make up for the damage.