FOOD PRICES, particularly of chicken and pork, may spike if the unrest at Taal Volcano in Batangas continues, as the Calabarzon Region is considered as a major source of livestock in the country, according to an economist.
“We worry that the Taal eruption may put pressure on food prices of livestock, particularly chicken and hogs (as well as fish supply) since Calabarzon — Taal’s location and region most affected, is a significant contributor to local production of livestock,” Philippine National Bank (PNB) economist Jun Trinidad said in a note sent to journalists on Wednesday.
Calabarzon Region, which comprises five provinces — Cavite, Laguna, Batangas, Rizal, and Quezon, is the second-largest regional producer of live chicken and second-largest source of hog supply.
Mr. Trinidad said the downside risk from the Taal Volcano eruption, coupled with the strong typhoons in the fourth quarter of 2019, “would take its toll on inflation, rather than on domestic demand that could undermine GDP prospects.”
“While income and food price shocks arising from natural disaster events do not last given import channels and return to normal business/production in the affected regions, the recent natural disaster effects bolster a 2020 inflation trajectory that’s likely to breakout of the 2-2.5% range and perch at 3% year-on-year if not more, to kick start 2020,” he said.
However, Finance Undersecretary Gil S. Beltran said the inflationary impact of the volcanic eruption will be tempered as other regions can fill in the needed supply.
“Other regions are being tasked to fill in for devastated areas. This will temper the inflationary impact of the Taal eruption,” Mr. Beltran said in a mobile phone message yesterday.
According to preliminary projections made by National Economic and Development Authority’s (NEDA), Socioeconomic Planning Secretary Ernesto M. Pernia said Taal Volcano’s eruption and tremors resulted in P7.63 billion worth of economic losses in Batangas alone as of Monday, which translates to 0.3% of Calabarzon’s total regional economic growth.
NEDA Undersecretary Adoracion M. Navarro said Taal’s eruption may have caused the agriculture, forestry and fishery sector P3.28 billion in economic losses, second only to the services sector which lost around P4.32 billion and economic and industry sector which suffered P27.16 million of economic losses.
The Department of Agriculture reported that the agriculture damage for the region reached P577.39 million, affecting around 2,772 hectares of land and 1,967 animals.
However, PNB’s Mr. Trinidad said damages caused by natural disasters can be mitigated by “size and speed” of government’s effort to aid and provide relief to affected areas, as well as through reconstruction and rehabilitation of infrastructure, school buildings, airports, public markets and medical facilities.
“Although bureaucratic delays can delay, if not weaken the government’s disaster response… Fiscal imperatives would also require jobs /income creation in the affected regions/provinces until business/production activities normalize,” he added.
Taal Volcano was still on Alert Level 4 as of Wednesday morning since it erupted on Sunday, with 28 volcanic earthquakes felt on Tuesday, according to Philippine Institute of Volcanology and Seismology.
The government has implemented a total evacuation of the Taal Volcano island and high-risk areas that are within the 14-kilometer radius from Taal’s main crater and those along the Pansipit River Vallley.
The Calabarzon Region had the second-largest contribution to the country’s gross domestic product (GDP) with a 17% share in 2018, next to the National Capital Region’s 36% share. — Beatrice M. Laforga