Notes on the economic and social impact of Ondoy and Pepeng

Ondoy victims in Pila, Laguna receive relief goods from volunteers of the Bayan's Bayanihan Alay sa Sambayanan (BALSA)
Ondoy victims in Pila, Laguna receive relief goods from volunteers of Bayan's Bayanihan Alay sa Sambayanan or BALSA (photo from Bulatlat.com)

The twin devastation brought by typhoons Ondoy and Pepeng hit the Philippines at a time when the country is still reeling from the impact of the global financial and economic crisis. According to the latest (as of Oct 16) consolidated report of the National Disaster Coordinating Council (NDCC), the total cost of damage from the two typhoons reached P21.29 billion. The cost of damage to agriculture accounted for 64.8% of the total, and infrastructure, 35.1%. About 7.43 million were affected in the country’s 12 regions, including Metro Manila. (See Table 1)

Initial estimates from the National Economic Development Authority (NEDA), meanwhile, claimed that the macroeconomic impact of the two typhoons is about 0.2% of the gross domestic product (GDP). This could be mitigated, according to NEDA, by remittances from overseas Filipino workers (OFWs) who would tend to send home more money because of emergencies and “will make up for the billions lost in devastating floods”.

Table 1. Estimated extent of impact of Ondoy and Pepeng, data cited as of Oct 16, 2009
Indicators Ondoy Pepeng Total
Affected no. of people (in million) 4.32 3.11 7.43
Total no. of casualties, of which: 781 654 1,435
   No. of dead 354 419 773
   No. of injured 390 184 574
   No. of missing 37 51 88
Cost of damage (in P billion), of which: 10.85 10.44 21.29
   Infrastructure 4.08 3.40 7.48
   Agriculture 6.77 7.03 13.8
   Private property n.d.c. 0.003 0.003
Total no. houses damaged, of which: 101,278 33,883 135,161
   Totally 25,259 4,040 29,299
   Partially 76,019 34,843 110,862
Regions affected, of which: III, IV-A, IV-B, V, VI, IX, X, ARMM, CAR, NCR I, II, III, IV-A, V, VI, CAR, NCR n.a.
   No. of barangays 1,902 4,585 n.a.
   No. of municipalities 155 361 n.a.
   No. of cities 30 35 n.a.
   No. of provinces 25 27 n.a.
Notes: n.d.c. – no data cited; n.a. – not applicable
Compiled using data from the NDCC Situation Report No. 31 dated Oct 16, 2009

Because of the need for additional spending for post-Ondoy and Pepeng rehabilitation and reconstruction, on top of the need to pump-prime the economy amid the global financial and economic crisis, the 2009 budget deficit could reach as much as P307.9 billion, according to the Department of Finance (DOF). There is no official figure yet on the actual amount needed for rehabilitation and reconstruction but Congress has already approved a P12-billion supplemental budget for the immediate needs of the typhoon victims.

In addition, a total of P32 billion spread over 10 years is needed to relocate more than half a million illegal settlers, including those occupying waterways in Metro Manila. Mrs. Arroyo has ordered the immediate relocation of families near waterways following the massive flooding caused by Ondoy.

Meanwhile, the Arroyo administration has also successfully raised $1 billion from the global bonds market which it said would be used for its reconstruction efforts in regions affected by Ondoy and Pepeng.

While government tends to downplay the effects of the recent typhoons on the economy, with NEDA pointing out that reconstruction will spur domestic growth, the costs are actually much higher considering the still unquantified short- and medium-term effects of losses in jobs and livelihood due to Ondoy and Pepeng, although independent think tank IBON Foundation, in an estimate, said that Ondoy alone would push at least 276,000 families in NCR, Calabarzon, and Central Luzon into “long-term poverty”.

Note also that official unemployment before the storms ravaged the country was pegged at 7.6% nationwide (National Statistics Office’s July 2009 Labor Force Survey), with the top three highest regional unemployment posted by the NCR (12.1%); Calabarzon (11.1%); and Central Luzon (9.9%) – the regions most affected by the typhoons. These regions account for 79.9% of the total number of permanently displaced workers due to economic reasons from Jan 2008 to Jun 2009 as well as 69.3% of the total number of families affected by Ondoy and Pepeng. (See Table 2

Table 2. Unemployment rate, no. of permanently displaced workers due to economic reasons, and population affected by Ondoy and Pepeng by region
Region Unemployment rate (in %, Jul 2009) No. of permanently displaced workers due to economic reasons (full-year 2008 & 1st half 2009) No. of affected families by Ondoy & Pepeng (as of Oct 16, 2009)
NCR 12.1 40,427 176,776
IV- A – Calabarzon 11.1 22,241 509,221
III – Central Luzon 9.9 9,902 382,788
I – Ilocos Region 6.7 328 234,479
Cordillera Administrative Region 4.6 1,182 54,507
VI – Western Visayas 7.4 1,360 316
X – Northern Mindanao 5.7 982 0
V – Bicol Region 5.4 347 70,389
XII – Socksargen 5.1 226 603
IV-B – Mimaropa 4.3 635 7,296
IX – Zamboanga Peninsula 4.1 295 191
ARMM 3.4   350
II – Cagayan Valley 2.8 308 105,529
National total (including other regions not affected by Ondoy & Pepeng) 7.6 90,788 1,542,445
Compiled using data from the NSO on unemployment, BLES on displaced workers, and NDCC on affected families by Ondoy & Pepeng
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