While Typhoon Yolanda made Eastern Visayas and some parts surrounding that region a wasteland, the Philippines should be thankful that it can still attain a gross domestic product (GDP) growth of about seven percent for the current year.
This is more than a consolation for the Philippines, since a seven-percent GDP growth for this year will send a clear signal to the international community that the country’s economic fundamentals are still intact.
No less than Moody’s Investment Services made this pronouncement last week. Economists and key government officials who attended the Philippine Economic Society’s (PES) 51st annual meeting last week also agreed that the seven-percent GDP growth for this year could be achieved despite Yolanda’s destruction in Eastern Visayas and its surrounding areas.
While Socioeconomic Planning Secretary Arsenio Balisacan issued a statement also last week saying that the fourth-quarter GDP of the country can slow down a bit given the effects of Yolanda, he said that the overall impact on the year-end GDP will be from 0.3-percent to 0.8-percentage points. With Eastern Visayas accounting for only two percent of the country’s GDP, Balisacan’s projections are well grounded.
The reconstruction efforts for Eastern Visayas and other affected areas will also bode well for the GDP in 2014, said Cesar Consing, Bank of the Philippine Islands president, during the PES annual meeting. This is because the funds that will be allocated for the reconstruction efforts of areas hit by the super typhoon will surely result to pump priming of some local economies.
With optimism toward the country’s GDP growth, the best thing the Aquino administration could do is to speed up relief and rebuilding efforts in areas badly hit by Yolanda, since sights of the disaster areas not getting enough help might create an impression to foreign investors that the government cannot get things in order in the Philippines when disasters strike.
President Benigno Aquino 3rd can also show to the whole world that he is still taking the “Tuwid na Daan” (Straight and Honest Path) by making sure that every single peso of the funds poured into the rehabilitation and relief efforts are spent wisely.
Also last week, Budget Secretary Florencio Abad said that government funding for the areas affected by Yolanda can climb to as much as P40 billion, once the temporary restraining order of the Supreme Court on the Priority Development Assistance Fund (PDAF) will be lifted. This is definitely good news.
Although the billions of pesos that will be poured in by the Aquino administration will be prioritized for relief and reconstruction efforts in the areas affected by the super typhoon, it should also provide funds to adequately train local leaders in Eastern Visayas and its surrounding areas on how to deal with storms of the magnitude of Yolanda.
Indeed, the world is keenly watching how the Aquino administration is dealing with the destruction caused by the super typhoon, and the country’s GDP figures. The Aquino administration will surely get a pat on the back if the third quarter and subsequent GDP figures show impressive growth. But the world would be more impressed if the areas struck by Yolanda quickly rise from the ashes.