With the death count in the Philippines likely to reach 10,000, aid is pouring into the country from around the world. The United Nations World Food Program, the International Red Cross, and donor nations such as the U.S. and Israel have been sending food and medicine, Ferdinand Martin Romualdez, a congressman from Leyte, a province hit hard by Typhoon Haiyan, told Bloomberg Television’s Angie Lau today.
The help is needed, since almost 9.5 million people are affected by the typhoon. That’s about 9 percent of the country’s population. “We are actually at this point getting a lot of relief, and we are very grateful for all of that,” said Romualdez. The biggest problem now, the lawmaker added, is homelessness caused by the massive storm. “We will be needing housing because all homes have been destroyed, either totally or substantially,” he said. “Shelter is desperately needed.”
As the Philippines struggles to recover from one of the most powerful typhoons ever, the country’s government will need to focus not just on homes but also other basics, such as roads and utilities. The Philippine economy has been Asia’s surprise success story over the past year, with the region’s longtime laggard outperforming such neighbors as India and Indonesia, thanks in part to improved tax collections that have allowed for more infrastructure spending by the government of President Benigno Aquino. When it comes to the economy, “things have been basically fantastic there for a couple of years,” says Glenn Levine, senior economist with Moody’s Analytics (MCO). “It shows the rewards of having a business-friendly government.”
Still on Aquino’s to-do list, though, is progress in addressing decades of underinvestment in the country’s roads, airports, and other public works. The government boosted spending on infrastructure by 47 percent in the first eight months of 2013, to 170 billion pesos ($3.9 billion), but progress is painfully slow on projects calling for the government to cooperate with the private sector.
The destruction caused by Typhoon Haiyan highlights the urgent need to catch up after decades lost to kleptocrats dating back to the Marcos years. Indeed, if there’s a country that should have well-developed plans for coping with natural disasters, it’s the Philippines. The archipelago gets about 20 typhoons a year and is frequently hit by earthquakes and volcanic eruptions. The Center for Research on the Epidemiology of Disasters put the Philippines at the top of its list of countries affected by natural disasters last year, with more than 2,000 people killed.
Beyond the immediate relief requirements, Aquino’s government should be thinking about how to make the population less vulnerable to disasters. While the president can do nothing to stop the storms, the government can do a better job planning for them. “What we need are permanent solutions like resettlement plans for flood-prone areas [and] more infrastructures like dams and waterways,” Benito Lim, a political science professor at Ateneo de Manila University, told Bloomberg News.
It’s too early to know the full extent of the storm’s economic impact. The benchmark stock index fell 1.4 percent on Monday. While that was the biggest drop for the Philippine market since September, it was just a dip compared with the plunge suffered by Japanese stocks after the 2011 earthquake and tsunami. It’s unclear whether investors were worried about events in the Philippines or across the Pacific: Monday’s drop comes after the impressive job growth data in the U.S. triggered renewed fears of an end to Fed tapering, a move that might endanger growth in emerging markets.
Either way, Monday turned out to be a bad day for the stock market debut of Robinsons Retail (RRHI:PM), the operator of supermarkets and departments stores controlled by billionaire John Gokongwei. The biggest IPO of the year in the Philippines raised at least $621 million, but the stock price sank fell 2.6 percent on its debut.
For the millions of Filipino families in need of emergency aid, recovery from Haiyan may be long and difficult. The country’s economy could bounce back soon, however. Any slowdown from Haiyan will be “short-lived,” says Euben Paracuelles, an economist with Nomura (NMR), the Japanese bank, which still expects GDP growth of more than 7 percent for 2013. “Next year, I think the recovery will be relatively quick,” he says.