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Rehab effort could provide growth boost

Posted on November 16, 2013

The havoc wrought by Typhoon Yolanda (international name: Haiyan) could turn out to be a growth boost as relief and rehabilitation efforts spur consumption and infrastructure investment, an economic manager said.

Budget Secretary Florencio B. Abad said the Philippines could still meet its “fighting targets”for this year and the next, especially since the areas affected by the storm have a limited contribution to economic output.

“[Typhoon Yolanda] can work other way around too. It can generate more domestic consumption and spending provided that we have the funds to support that spending,”Mr. Abad said on Friday at the sidelines of the Philippine Economic Society’s annual meeting.

“It will depend on how fast and how well we can respond to the crisis, but it can boost not just the regional economy but the national one as well. We will have to provide emergency employment for those displaced and rehabilitation efforts for damaged infrastructure.”

The government is aiming for gross domestic product growth of 6-7% and 6.5-7.5% for 2013 and 2014, respectively. First semester growth was above the full-year target at 7.6%.

Fears have been raised that Yolanda -- the world’s strongest storm this year -- could throw the country off its high growth path. Officials have said that while fourth quarter growth could slow, the full-year result will still fall within the 6-7% target.

As of six in the morning yesterday, the official death toll was put at 2,360, with 3,853 injured and 77 were missing. More than nine million people were also affected. The estimated damage was pegged at P4.06 billion.

Mr. Abad said the government had as much as P40 billion to respond to the disaster, both for short-term relief efforts as well as long-term rehabilitation.

About P26 billion will come from the government’s contingency fund, calamity fund, social fund and various savings. The remaining P14 billion could be sourced from legislators’ priority development assistance funds should the Supreme Court lift a temporary restraining order on the money. Mr. Abad said he expects a decision from the high court “soon.”

“The P40 billion will be more than enough for the coming weeks,”he claimed.

With a surge in spending seen in the coming months, the Budget chief said the government would be able to make the most of its fiscal space.

As of September, the budget deficit totaled P101.2 billion, well below the P144.5-billion ceiling.

“We will try to the extent possible to maximize that,”Mr. Abad said.

Looking ahead, economic managers are already discussing possible adjustments to the national budget and its spending rules in aid of the post-Yolanda recovery.

Mr. Abad said talks were ongoing with Congress to extend the one-year life of savings from the 2013 national budget so they can be used all the way into next year.

“I think what we need to reserve for is the rehabilitation requirements in the long term, such as the provision of houses, both temporary and permanent, for the thousands rendered homeless,”he explained.

The Government Procurement Policy Board (GPPB) has also allowed agencies involved in relief efforts to avail of goods and services through negotiated deals instead of public auctions.

“Competitive bidding, which is the normal course for government procurement, usually takes months to conclude ... It was clear to the GPPB, however, that we do not have the luxury of waiting for a couple of months for us to secure goods and services necessary to Yolanda relief efforts,”GPPB Technical Support Office Director Dennis S. Santiago said in a statement on Friday.

Under a negotiated procurement, agencies can award deals to contractors “with a track record of technical expertise or efficiency in service delivery.”

Moreover, Mr. Abad said the Public Works and Transportation departments were reviewing changes to the construction of public schools and hospitals in the Visayas to make them more disaster-ready, especially with Yolanda having unleashed winds of over 300 kilometers per hour.

The Social Welfare department’s cash-for-work program could also be expanded, he added, so that those in affected areas can earn money from helping in clearing operations.

“That will keep them busy and productive, and at the same time it helps government clear out towns and municipalities for faster relief,”he said. -- Diane Claire J. Jiao