Economy to feel impact of recent calamity–experts

The Philippine economic growth target may be cut this year because of the impact of tropical storm Ondoy and may dampen the Christmas season, experts said Tuesday. Augusto Santos said the economy, as measured by gross domestic product (GDP), may be reduced between 0.7 percent and 1.7 percent this year. He is the acting Socioeconomic Planning secretary and director general of the National Economic and Development Authority (NEDA).

GDP, a key economic indicator, is the total value of all final goods and services produced in a country in a year.

The government targets a GDP growth ranging from 0.8 percent to 1.8 percent this year. The economy in the first half grew by only 1 percent, lower than the 4-percent growth in the same period last year.

“Using the latest available figures from the National Disaster Coordinating Council and the NEDA Regional Offices and Office of Civil Defense on the impact of damages caused by . . . [tropical storm] 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,” Santos said.

He added that Ondoy (international name: Ketsana) damaged P108.9-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).

But Dennis Arroyo, director of NEDA’s national planning and policy staff, said that overseas Filipino workers inflows have been stronger than expected.

“The government forecast is flat growth, or 0-percent growth from 2009. In actual fact, growth is 3.8 percent so far, or from January to July 2009,” he added. “We are maintaining the 0.8 [percent] to 1.8 percent forecast for 2009.”

‘Blue Christmas’

For Benjamin Diokno, former Budget secretary during the Estrada administration, raised concerns about the storm’s impact. “Its effect was wide, cutting across income class. It has disruptive the normal conduct of economic activities.”

He added that the storm has affected and continues to affect housing, real estate, state of public infrastructure, utilities such as electricity, water, and telecommunications, transport, wholesale and retail trade.

“Most of all, it has further dampened consumer confidence. Even now some private firms are thinking of advancing Christmas bonuses. That tides over some victims of the weekend tragedy, though it may mean blue Christmas for them and others,” Diokno said.

“The third quarter growth was pretty much set even before the . . . [tropical storm] Ondoy. But there were a series of typhoons before Ondoy that suggest that agriculture output would be weak,” Diokno said.

Robust sales

Meanwhile, the country’s dominant shopping mall developer and operator said also on Tuesday that sales surged in some areas after a powerful storm battered Metro Manila over the weekend.

Cora Guidote, SM Investments Corp. (SMIC) vice president for investor relations, said the company’s unit and mall operator SM Prime Holdings Inc. has registered stronger sales in the recent days due to higher consumer purchases in their supermarkets.

“Today is an extra ordinary event. Sales are very strong but it is not sustainable,” Guidote said in a telephone interview.

In the first semester of the year, SMIC’s net income was driven by strong retail sales, as retail merchandising accounted for 39 percent of the total income.

She said, however, that the strong sales, mainly from SM supermarkets located near the hardest-hit cities, were being pull-down by the stores that were shut-down by company after these were battered by tropical storm Ondoy.

“Overall, its make even,” the official said.

Guidote said that SM Prime has temporarily closed six supermarkets, mostly located in Santa Mesa in Manila, Marikina and Cainta, as some stores in country’s capital are in normal operation.

“Stores that have registered stronger sales are Tiendesitas and SM Megamall, and these stores are located near the most affected areas,” she added.

Because of huge demand for basic commodities in the East-part of Metro Manila, Guidote said the mall operator was forced to open SM Marikina even if it was also damaged and left without electric power. “We [are] operating in Marikina because of generators,” she said.

Panic-buying

At the emergency National Price Coordinating Council meeting on Monday, Steven Cua, Philippine Amalgamated Supermarkets Association Inc. (PAGASA) president, said several small groceries had seen costumers panic buy on Sunday, probably because of fears that they would run out of goods to buy, he said.

“We urge the public to not buy more than what you need. The more we do so, mas mauubos ang supply [the supply will run out faster],” he said.

Cua added that many groceries, especially in the eastern part of Metro Manila—the hardest hit by Ondoy—have yet to resume operations because their stores were still flooded.

Budget vs. climate change

Also on Tuesday, a civil society group urged Congress to allocate P11.4 billion additional funding in the 2010 national budget to mitigate possible disasters that may be wrought by extreme weather conditions caused by climate change such as tropical storm Ondoy.

Former national treasurer Leonor Briones, lead convenor of Social Watch Philippines (SWP), noted that “the Philippines is naturally prone to climate change and the safety of many people can be summarized in three words: ‘Climate Change Financing.’”

The Alternative Budget Initiative (ABI), a consortium of 60 nongovernment organizations led by the SWP, has been calling for more funding for climate change adaptation and mitigation measures since 2006.

“The wrath of Ondoy should serve as a wake-up call for government to be climate change sensitive and to finally adopt the budget for climate change mitigation and adaptation proposed by the ABI’s environment group,” Briones added.

ABI proposed that the government should add a total of P11.4 billion in certain items in the 2010 budget in order to become “climate change sensitive.”

Among the suggested items to be augmented using the suggested amount includes the budget for the finalization of the Philippine climate change action framework and plan; piloting climate change initiatives in the top-10 high-risk provinces; harmonization of existing programs to a national climate change action framework and plan; climate change actions within the agriculture sector; orientation of Environment department’s programs, operations and activities toward climate change actions; and pro-active programs responding to climate-related disasters. –Darwin G. Amojelar, Chino S. Leyco, Ben Arnold O. De Vera And Frank Lloyd Tiongson, Manila Times