Haiyan Typhoon should have a limited economic impact

MANILA/WASHINGTON– In November, a gigantic typhoon, called Haiyan –or Yolanda by locals- destroyed a large part of Central Philippines, along the Visayas Islands. The typhoon displaced more than four million people and at its peak, evacuation centres housed some 500,000 inhabitants The situation is still tensed but is now coming back to the normal after the first days or panic and disorganization. A few days ago, the United Nations indicated that less than 100,000 displaced people were now staying in evacuation centres.

The storm caused of course heavy damaged that experts now estimate at US $700 million, especially for agriculture and infrastructure. It also completely destroyed more than half a million homes. The United Nations’ Office for the Coordination of Humanitarian Affairs reports that 77% of farmers and 74% of fishermen in the central Philippines have lost their primary source of income. Central Visayas was considered until now as the “bread basket” of the country as a major producer of rice, coconut and sugarcane. It accounted before for 12.7% of Philippines’ total GDP.

However, officials at financial institutions such as the Philippines Central Bank (Bangko Sentral ng Pilipinas or BSP) or the World Bank have been relatively optimistic about the pace of the recovery. “As many analysts and other government officials have said, the economic impact is expected to be mild,” declared Amando Tetangco, BSP Governor to foreign media a few weeks ago. “What is really of concern is the impact on the people who have been affected.”

“Timely implementation of the country’s recovery and reconstruction program will reduce the economic and social impact of Typhoon Yolanda (Haiyan) and help the Philippines maintain a high growth rate that benefits the poor”, explained last month Axel van Trotsenburg, World Bank Vice President for East Asia and Pacific following his visit to Tacloban to meet with residents and city officials affected by the typhoon.

“In my short visit to Tacloban, I was able to get a sense of the devastation caused by Typhoon Yolanda and have been impressed by how people are coping and working extremely hard to clean up, rebuild and start the long road towards normalization. The World Bank will stand by people in the affected communities in their reconstruction efforts over the months and years ahead,” said Mr. van Trotsenburg.

The World Bank immediately approved the US$500 million quick-disbursing budget support that the government can use in dealing with the short-term recovery and reconstruction efforts. The bank also sent its experts to help the government with the planning process for the reconstruction and for assessing the damages and priority programs to be implemented.

Based on the experience on other countries, the World Bank Group has also provided technical assistance on disaster-resilience design options for housing, health facilities, schools, and public facilities that can withstand super typhoons as well as resist high-magnitude earthquakes and severe flooding.

The World Bank’s pre-Yolanda forecast put the Philippines’ GDP at 7.0 percent in 2013, 6.7 percent in 2014, and 6.8 percent in 2015. “With the implementation of a rapid and effective recovery and reconstruction program by the government after Typhoon Yolanda, it’s likely that the country’s GDP growth rate will be 6.9 percent in 2013 and 6.5 percent and 7.1 percent, respectively, in the succeeding years,” said Rogier van den Brink, Lead Economist for the World Bank in the Philippines.

Rebuilding efforts could even give a boost to the region hit hardest by the storm as money is expected to flow into reconstruction programs as well as to an upgrade of public infrastructure. According to Mr. Tetangco, the government would “potentially” spend more into the reconstruction process. The Governor expects also an increase in the remittances from overseas Filipino workers, one of the biggest supports to the country’s economy.

Tourism is probably one of the sectors which could be the most affected by the recent catastrophe. Cebu or Bohol –two icons of Filipino tourism- suffered heavily from the devastation but believing that the entire archipelago of 7,000 islands has been affected on a similar scale is totally wrong. “The Philippines remains a safe destination for all tourists”, stresses now the Philippines Department of Tourism, which now urges people to visit the country, stressing that their presence will have a direct effect on helping locals to be again busy and rebuild their lives. The message is simple: 97% of the country was NOT affected by the catastrophe. Many tourism companies are now linking their programs to distribution plans to help locals, an initiative which has so far being well accepted by most visitors. Individual cruise lines for example including Royal Caribbean Cruises Limited, Norwegian Cruise Line, Carnival Corporation & PLC, Crystal Cruises and Paul Gauguin Cruises, have contributed more than US$ 2.2 million in relief efforts to the country.

Sourced: TravelDailyNews