Accounting of economic value of total disaster impact urged

CEBU, Philippines – Researchers from Silliman University reported that the total impact of the 6.9-magnitude earthquake that hit six towns in Negros Oriental in February 2012 cost P2.3 billion.

The figure is more than six times the early estimates made by the National Disaster Risk Reduction Management Council and double the figures quoted in a subsequent action plan for rehabilitation and recovery prepared by the Negros Oriental provincial government and endorsed to the national government for funding.

Government reports on the loss of property in the wake of disasters are “lamentably incomplete and inaccurate” because they focus only on direct physical damage to infrastructure (roads, bridges, agricultural facilities), said the SU report.

“The effects on the business operations, as well as on the income of the people especially (the farmers and fishermen) are frequently ignored,” said research leader Wilma Tejero of the SU College of Business Administration Department of Economics, in a paper read at a Silliman Founders Day forum last August 25.

A magnitude 6.9 earthquake of tectonic origin shook Guihulngan City and the towns of La Libertad, Jimalalud, Tayasan, Ayungon and Bindoy in the northern part of Negros Oriental, one of four provinces of Central Visayas, on February 6, 2012. - Celia B. Acedo, Silliman University

According to government reports, the quake left 59 persons dead, 55 persons missing and 197,000 persons affected. A total of 37,000 houses were either totally or partially damaged. Many roads were cracked, 14 bridges were damaged, three of which were impassable. Communication and power lines were down.

Early reports made by the NDRRMC in the aftermath of the earthquake placed the cost of the damage only at P382 million.

The subsequent action plan for rehabilitation and recovery prepared by the provincial government placed the damage at P1.17 billion, half the total impact valuation by the Silliman group.

The SU researchers, who visited the areas one year after the disaster, reported that according to their more comprehensive assessment, the most heavily affected sectors were housing, which sustained a loss of P742 million; agriculture, including damage to crops and agri-infrastructure, P306 million; damage to school buildings and facilities, P125 million; damage to hospitals and health centers, P35.6 million; and value of foregone productive life, P16 million.

In terms of indirect impact of the disaster, they said farmers and fishermen were the biggest losers. “The sector that bore the biggest brunt of the devastation…was the marginalized farmers in the upland areas,” the report said. “They lost P58.65 million in terms of rice and corn production (824 hectares of rice land and 1,366 hectares of corn farm).”

The farm owners and workers of Guihulngan (P19.5 million) and Ayungon (P15.2 million) were hardest hit as they experienced the biggest production losses in rice and corn. The combined losses of La Libertad, Jimalalud and Tayasan totaled P23 million.

“Since these municipalities depend on agriculture (60 to 70 percent), the local economies are definitely affected and will continue to experience productivity decline in many years to come if farm rehabilitation program is not put in place immediately.”

The SU researchers urged the national and local governments to take full stock of the impact and damage caused by natural disasters, using the so-called “total social loss” approach. It is patterned after internationally accepted methodology for estimating the socio-economic and environmental effects of disasters, developed by the United Nations and adapted by the Australian Agency for International Development.

This approach quantifies not only damage to infrastructure but also the social, economic and environmental damage as well.

Specifically the SU assessment included three sectors: Social (housing, education and health), infrastructure (roads and bridges, transportation, electricity and water, and communication), and economics (agriculture, enterprises and tourism).

The group said a more comprehensive accounting of the impact from disasters is necessary so that measures for disaster mitigation and climate-change adaptation are not undervalued. It also said the severity and frequency of climate-change related disasters will increase due to global change.

“Complete information on the total economic value of the damage caused by the 2012 earthquake allows the national and local governments to be better prepared in terms of resource allocation and prioritization of disaster risk reduction and management program in the locality,” the group said.

It also challenges the LGUs to plan effective post-disaster rehabilitation and reconstruction strategies and make sound decisions in prioritizing the needs of places and people most vulnerable to natural disasters.

The other SU researchers are Dr. Andrea Soluta, Dr. Mirabelle Engcoy, biologist Roy Olsen de Leon, Dr. Silvestre Alforque, CPA Betty Jane Martinez, Dr. Ma. Stella Lezama and lawyer Tabitha Tinagan. The goal of their study was to provide comprehensive information to help government prepare a more effective and efficient risk reduction and mitigation program.

The study was funded by the Philippine Higher Education Research Network of the Commission on Higher Education, which has given Silliman University P30 million for faculty research for three years. It is one of six studies completed at Silliman during the first year of the grant.