Estimates from the National Economic and Development Authority show that damage to property, agriculture, infrastructure and overall productivity loss from the onslaught of Typhoon Ondoy will further errode an already weak Philippine economy.
The performance of an economy is measured by Gross Domestic Product, or GDP.
“Using the latest available figures from the National Disaster Coordinating Council (NDCC) and the NEDA Regional Offices and Office of Civil Defense on the impact of damages caused by typhoon Ondoy, our preliminary estimate shows that the recent storm could reduce the real GDP growth rate in full year 2009 by at least 0.043 percentage points,” said Acting Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director General Augusto B. Santos. Santos presented the figures during a Cabinet meeting Tuesday.
He added that given this, the DBCC growth assumption of 0.8 -1.8 percent for 2009 could decline to 0.7 -1.7 percent.
Typhoon Ondoy (international name Ketsana) damaged PhP108.9 million worth of infrastructure and crops and affected about 90,000 families as it brought a 40-year record-breaking, 41.6-centimeters total rainfall in a single day (the previous record was 33.4 centimeters in July 1967).
Damage estimates from the National Disaster Coordinating Council are much higher–at PhP4.7 billion.
However, even with the forecasts, simulations and estimates by the economic experts, the official Philippine GDP growth projection WILL NOT BE CHANGED. So for the record, as per NEDA, the 2009 gross domestic product target remains at 0.8 to 1.8 percent.
NEDA noted that overseas Filipino (OF) remittances, which have been stronger than forecast, will help maintain the 2009 gross domestic product target.
Santos thus said that despite the impact of Typhoon Ondoy, “it is best not to move for now the target of 0.8 to 1.8 percent for 2009.”
Remittances from overseas Filipinos, which in turn drives consumer spending, accounts for about two-thirds of GDP.
As of July 2009, remittances from millions of Filipinos working overseas rose 9 percent to $1.49 billion in July, bringing the total for the first seven months of the year to $9.97 billion, up 3.8 percent from a year ago. The growth in remittances bucked an expected plateau, or slowdown of money sent home by Filipino workers abroad. Monetary officials had been anticipating that remittances would contract sharply this year on the back of layoffs in the manufacturing and financial sectors due to the global economic crunch.
In relation to hurting overall economic growth, ordinary folks like you and me can expect an uptick in the prices of many consumer goods–notably fish, fruits, vegetables and rice.
Why? It’s the simple law of supply and demand.
Moreover, people have been shopping like mad the past few days–keeping more stocks of commodities in anticipation of more rains and floods.
The pace on increases of the prices of goods and commodities is measured by inflation, or the Consumer Price Index (CPI).
“Our inflation target for 2009 is not likely to be breached,” said Bangko Sentral Governor Amando Tetangco, Jr. in a mobile phone text message. The BSP forecast price increases to range from 2.5 percent to 4.5 percent for this year, or an average of about 3 percent.
For September 2009 alone, the BSP is keeping its forecast at zero to 0.9 percent.
“Higher prices of vegetables due to recent inclement weather may have been offset by lower prices due to ample supply of National Food Authority [NFA] stocks and early harvest,” said Tetangco, “The continued relatively low crude prices have also resulted in lower domestic pump prices.”
So what can we do?
I guess sobriety is the name of the game at this point in time. The weather is unpredictable, so the best we can do is to stay sharp and have a Plan B at all times. Panic buying, hoarding and expecting a doomsday scenario won’t help.
In 1759, Sir Arthur Guinness discovered a formula for a stout beer with a distinct bittersweet-burnt flavor. That beer is what is now known as Guinness.
