Typhoon to drag Philippine growth below 7 percent

Staff Writer
Columbus CEO

MANILA, Philippines (AP) — The Philippine government said Friday that damage caused by Typhoon Haiyan may reduce economic growth this year to less than 7 percent.

Socioeconomic Planning Secretary Arsenio Balisacan said the government forecasts growth of between 6.5 percent and 7 percent, down from its previous estimate of 7.3 percent.

The economic aftermath of the typhoon, which killed more than 2,300 people in the eastern Philippines, may linger into next year due to reduced production capacity. Balisacan said fourth quarter growth will slow to 4.1 percent from 7.1 percent last year.

The typhoon caused widespread damage to agriculture and infrastructure, with most buildings, homes and farms flattened in the worst hit areas. The economies of the worst hit provinces of Leyte, Samar and Eastern Samar largely rely on agriculture, fishing, manufacturing and construction.

The Philippines had become one of the fastest growing countries in Asia under policies to clean up corruption and alleviate poverty.

Balisacan said a government task force will prepare a detailed plan for recovery and reconstruction of affected provinces and will present it to President Benigno Aquino III in two to three weeks.

Immediate actions include assessment of damage to infrastructure and preparation of more resilient design standards for rebuilding of housing, roads, hospitals, airports and other critical infrastructure.

Devastation caused by the typhoon underlines the pressing need to spend more money to build hard assets such as more roads, ports and power lines — not only to improve living standards but also to better withstand the storms, earthquakes and other natural disasters that strike the country with numbing regularity.

The Philippines has the lowest percentage of paved roads when compared with neighbors Indonesia, Malaysia, Vietnam, Thailand and Singapore, according to data compiled by foreign business groups in the Philippines in 2010. It also had the worst scores in other key indicators such as fixed phone lines, households with power and electricity lost in transmission.

Balisacan said to regain lost ground, government delivery of services in affected areas, development of resettlement sites for displaced residents and the restoration of utilities must be completed "in the shortest possible time to restore people's means of livelihood and revive economic and business activities."

The Philippines is the country that's most at risk to natural hazards, according to UK-based risk analysis firm Maplecroft. The country loses $1.6 billion dollars a year on average each year because of natural disasters, according to the Asian Development Bank.