$4.4 billion lost to two typhoons, experts report

Typhoons Ondoy and Pepeng caused considerable damage and losses estimated at $4.4 billion, or 2.7 percent of the gross domestic product (GDP), according to a report by a group of local and foreign experts. GDP is the total value of goods and services produced in a country in a year. Prepared by the team composed of Philippine government agencies, the private sector, civil society and development partners—including Asian Development Bank (ADB), United Nations and World Bank Group—the report, “Post-Disaster Needs Assessment [PDNA],” said that the estimate ranked with those in other countries also struck by typhoons and was sufficiently large to impact on overall growth, poverty and fiscal position of the country and affected regions.

The report noted that nearly 95 percent of the damage and losses were sustained by the country’s productive and social sectors. The enterprise sector was the most hit, with $2.34 billion in damage and losses. The impact was felt mostly by micro- to medium-sized enterprises, which normally have limited or no access to credit.

In response to an initiative of the Philippine Disaster Recovery Foundation (PDRF) to improve access to credit of micro and small businesses, the reconstruction commission created by the government and the recovery foundation established by businessman Manny Pangilinan are forming a working group to be composed of representatives from Bankers Association of the Philippines, industry associations and development partners to identify appropriate financing packages for the purpose.

The agriculture sector suffered $849.3 million in damage and losses and the housing sector, $730.4 million.

“We provided a total of P12 billion in home and calamity loans. We also relocated families who were displaced and rendered homeless by the typhoons and have nowhere to go back to. We relocated them in safer areas following our in-city, in-town, near-city, near-town relocation policy,” Vice President Noli de Castro said in a statement.

The PDNA said that the country needs about $4.42 billion for reconstruction and recovery in over three years. It also estimated that the public-sector share in implementing the recovery and reconstruction program was $2.44 billion and the private-sector share, $1.99 billion.

Finance Secretary Margarito Teves said that financing could come from a variety of sources, including domestic budget, local government budget, private-sector contributions and grants and concessional financing from development partners.

According to the report, the financing needed is large, but the price to pay for doing nothing would be larger still.

Given constraints of the flood-management system in Metro Manila and the possibility of increased frequency and intensity of typhoons and floods, reconstruction and recovery costs are expected to rise unless efforts are made to mitigate effects of future disasters.

“We are pleased with the broad indication of support by our development partners that reached $3 billion. Together with available funding from the public sector of about $2 billion plus private-sector efforts through the PDRF, we are confident that we can have enough funds to meet the requirements for the country’s recovery and reconstruction,” Teves said.

He pointed out that bulk of the public-sector funding requirement would come from government financial institutions, or GFIs, such as Land Bank of the Philippines (LandBank) and Development Bank of the Philippines, and government-owned and -controlled corporations, or GOCCs.

Teves declined to give the exact amount contributed by lenders, but said that the ADB was the biggest contributor.

According to the Finance chief, the LandBank can use as much as P46 billion from its loanable funds and the housing agencies can provide up to P50 billion.

Local government units (LGUs), Teves said, also can contribute, particularly those in Metro Manila.

“This a concept of burden-sharing. I hope they [LGUs] are more than willing to share in the funding requirement. The support from GFIs and GOCCs is a welcome boost to our recovery and reconstruction efforts as we recognize that the fiscal space of the national government is getting tighter due to revenue-eroding measures and the impact of the global economic slowdown on our revenue collection,” he added.

Pangilinan, also the chairman of the recovery foundation, assured the public that the private sector would contribute to the recovery and reconstruction efforts through sustainable projects that are aimed at mitigating disaster risks and improving preparedness.

“We are looking at this task of rebuilding after the storms as a window of opportunity to address difficult and long-standing issues in the country in order to reduce disaster risks and improve the quality of life of Filipinos,” he said. –LAILANY P. GOMEZ, Manila Times