AGRICULTURE and productivity losses caused by Typhoon Odette could significantly impact fourth-quarter economic expansion, economists said.
Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government is currently prioritizing immediate relief operations to mitigate the impact of the typhoon on affected communities.
“We will await a full impact/damage report and if needed do a post disaster needs assessment,” he said when asked how the devastation caused by Typhoon Odette could impact the fourth-quarter gross domestic product.
Typhoon Odette (international name: Rai) brought heavy rains and destructive winds over central and southern Philippines. It first made landfall in Siargao Island, Surigao del Norte on Thursday. Surigao del Norte may have suffered around P20 billion in damage, according to provincial officials.
The Agriculture department on Sunday said an initial assessment showed damage to crops in Western Visayas and the Caraga region is estimated at P127 million. Agriculture typically makes up around 10% of overall economic output, and a fourth of the country’s jobs.
“Typhoon Odette’s drag on gross domestic product (GDP) would be on the tangible damage on agriculture and the productivity losses brought about by the disruptions in business and other economic activities,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Sunday.
Disruptions would be especially seen in areas of Visayas and Mindanao without electricity, water, and telecommunications, he said.
The typhoon had 195 kilometers per hour (kph) in maximum sustained winds and gusts of up to 240 kph, cutting power and water supply and damaging parts of Visayas and Mindanao.
The Department of Public Works and Highways on Sunday said that damage to public infrastructure is now estimated at P309 million. It is still clearing 11 impassable roads in the five regions affected by Typhoon Odette.
The extent of the infrastructure damage is affecting the transport of goods, creating a shortage of fuel, drinking water, and basic commodities in the typhoon-hit areas.
“There may also be temporary loss of jobs and other economic activities until some reparation/restoration already in place to allow resumption of business and other economic activities,” Mr. Ricafort said.
Price hikes in areas hit hard by the typhoon could also impact fourth-quarter growth, he added.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the typhoon’s effects on major economic hubs in Visayas and Mindanao, such as Cebu, Bohol, and Cagayan de Oro, could translate into significant economic impact.
“We may see a slowdown through about 30% of national output,” he said in a Viber message, noting that Luzon accounts for 70% of the country’s GDP.
“Hopefully, it will not be too much of an economic impact and people can celebrate the holidays especially we are still in a pandemic,” he said.
Third-quarter GDP grew 7.1%, slowing from the 12% expansion in the preceding three months, after the government reintroduced lockdowns to curb a Delta-driven coronavirus disease 2019 (COVID-19) surge.
Last week, economic managers raised the government GDP growth projection to 5-5.5% for this year from the downgraded 4-5% goal issued in August.
Department of Finance Chief Economist Gil S. Beltran had said the 7% fourth-quarter GDP growth needed to hit the revised target is “doable” and “within range.”
Meanwhile, reconstruction activities after the typhoon could support some economic recovery.
“Rehabilitation of areas hit by storm damage would ironically add to economic activities, just like in large storm damage in the past,” Mr. Ricafort said.
Repairs on damaged homes and businesses would require additional spending from both the private sector and the government, increasing economic activities, he said.
The Department of Finance previously said that extreme weather events have caused P506.1 billion in losses and damage to the Philippines over the past decade, emphasizing the country’s vulnerability to the climate crisis. — Jenina P. Ibañez