Economic planners maintain 5% to 6% GDP growth target for 2012-A A +A
Sunday, October 7, 2012
MANILA –- Government economic planners are maintaining their gross domestic product (GDP) growth target of 5 to 6 percent this year despite the losses incurred due to Typhoon "Gener" and the southwest monsoon that recently hit the country.
Dr. Rosemarie Edillon, director of the National Economic and Development Authority (Neda) National Planning and Policy Staff, said the impacts of disasters are already incorporated in their economic growth projections.
The country’s GDP already grew by 6.1 percent during the first half of 2012.
“When we studied the impact of Gener and habagat, we found that the growth in GDP may have decreased by .05 percentage points. It is not something that we need to be worried about,” she said in an interview with the Philippines News Agency.
The Neda calculates that these weather disturbances have resulted in total losses to property and infrastructure of about P9.1 billion to P9.4 billion, representing 0.088 to 0.092 percent of GDP.
The estimated impact also included the direct and indirect costs of disasters. These represent production losses, work stoppage and cancelled flights and classes.
This was, however, smaller compared to the total damage particularly in the agriculture sector caused by tropical storms "Ondoy" and "Pepeng" in 2009, which was reported at about P22 billion or 2.7 percent of GDP.
Edillon said economic planners also monitored slight uptick in the country’s inflation rate, especially in food prices, every time there was a disaster.
“But the response of the DTI (Department of Trade and Industry) was fast so it did not persist for more than a week, which was a good thing,” she said.
Likewise, Edillon stressed that there were no increases in the country’s budget deficit after climatic disasters.
Boost in employment
But while typhoons caused substantial damage and losses, these also did something else: it provided a short-term boost in jobs resulting from post-disaster rebuilding efforts.
“There’s disaster, therefore, there is something that needs to be built so there has economic activity… In the short term, you get a boost in employment but productivity suffers,” Edillon said.
“Because of the damaged infrastructure, you have productivity losses. The whole time that a road is being rehabilitated, affected industries are not still in full productivity… Industries have to go a long way around just to bring their goods,” she explained.
The Neda official said the reconstruction activities can provide jobs, especially to those living in typhoon-hit areas.
“With the policy of the DSWD (Department of Social Welfare and Development) that those who are affected should be employed, that should give them a short-term relief from the impact of disasters,” she said.
Edillon believes that the economic growth that may be triggered by these rebuilding efforts has tenuous effect.
“In the end, what you really need is the long-term effect of that very good bridge, very good roads,” she pointed out.
Disaster-related activities should also spur innovations, Edillon said as she underscored the need for the country to focus more on climate change adaptation.
“We have to realize that we are living in different time; extreme weather disturbances are becoming more frequent. Nothing much you can do about it. Even advanced countries like Japan, the United States, Australia can do nothing to prevent these but they can mitigate it,” she said.
Edillon said the government, beginning in 2006, has been actively replacing infrastructures damaged by typhoons.
Climate change mitigation
“Right now, we actually have a massive planned spending to address disaster risk reduction and mitigation. It is coming to a point where we have a very good fiscal space, so (budget) deficit is not so much a problem now,” she said.
Under the government’s P2.006-trillion expenditure program for 2013, the budget for climate change mitigation and adaptation has been increased to P13.214 billion, much higher than this year’s budget of P4.5 billion.
Target budget includes National Greening Program (P5.9 billion), introduction of energy efficient electronic tricycles (P3.1 billion), unified mapping (P1.5 billion), forest protection (P1 billion) and flood control systems (P554 million).
In line with this, Edillon bared that the Neda Board recently approved P5 billion worth of flood control projects.
Construction of these projects is expected to start by the second or third quarter of 2013.
“There is now a masterplan for Metro Manila and surrounding areas. These include dikes, seawalls, river dredging, bridge construction; more of replacement of roads and bridges,” she said.
For his part, Department of Public Works and Highways Secretary Rogelio Singson said his agency is implementing "quick" infrastructure projects worth P5 billion until the middle of next year.
“We have been able to complete our masterplan for flood control for Metro Manila, including Laguna Lake. It is in place. We are now just sequencing what we can do immediately that is why, we were able to get the approval of P5 billion. So we start implementing that right away,” he said in a separate interview.
To maximize the impact of the rehabilitation efforts of the government, the Neda noted that scaling up of quick-disbursing small-scale infrastructure projects needs to be prioritized to minimize the disruption of economic activities.
These projects include construction and repair/rehabilitation of roads, irrigation systems, health facilities and school buildings affected by the calamities.
In the long term, Philippine Development Plan 2011-2016 stipulated that infrastructure development, as a core strategy to improve competitiveness in the country’s production sectors, including industry and services, should be climate resilient as well. (PNA)