Nov. 11 (Bloomberg) -- Destruction from Super Typhoon Haiyan, the most powerful storm on record to strike the Philippines, shows the task facing President Benigno Aquino to curb the death toll in a country prone to natural disasters.
The Philippine economy is the most at risk globally from natural hazards, according to Maplecroft, a risk research company based in Bath, England. The Asian Development Bank estimates losses from typhoons to earthquakes average $1.6 billion annually, the most in Southeast Asia. The country’s capital, Manila, tops the list of 616 cities ranked by the impact of natural perils to the economy, according to Swiss Re Ltd., the world’s second-largest reinsurer.
Even with this handicap, Aquino’s administration has overseen an economic revival that has allowed the government to increase spending on roads, airports and flood prevention to try to mitigate the effect of the catastrophes. Growth has exceeded 7 percent for four straight quarters and this year the country won investment-grade scores from Moody’s Investors Service, Fitch Ratings and Standard & Poor’s.
“Disaster preparedness should be a clear priority because it can have huge economic costs and affect the poorest in the society,” said Prakriti Sofat, a Singapore-based economist for Barclays Plc. “President Aquino has the second half of his term to focus on improving disaster management further and, if implemented, the benefits will be long-lasting.”
Haiyan may have killed 10,000 people, according to Philippine authorities cited by the Red Cross in Geneva. Almost 9.7 million Filipinos, or about a 10th of the population, were affected by the storm, the National Disaster Risk Reduction and Management Council said. Many areas were still out of contact, said Major Rey Balido, the council’s spokesman.
“The numbers are really alarming, but still subject to verification,” Aquino told reporters yesterday in Tacloban City, scene of some of the worst devastation, after flying over the affected region in a helicopter. “Areas made of light materials are totally destroyed. The priority now has to be food, restoration of water, and power and communications.”
Haiyan’s total economic impact may reach $14 billion, about $2 billion of which will be insured, according to a report by Jonathan Adams, a senior analyst at Bloomberg Industries, citing Kinetic Analysis Corp.
Aquino, 53, plans to more than double state spending on public works to 824 billion pesos ($19 billion) by 2016, or about 5 percent of gross domestic product, a ratio the World Bank says is needed to cut poverty and strengthen the economy.
The Philippines plans to spend about 16 billion pesos on flood control and drainage projects this year, out of a record 295 billion-peso infrastructure budget. Another 644 million pesos are allocated for equipment to forecast or monitor storms, volcanic eruptions and quakes, and 7.5 billion pesos for a calamity fund.
“What is lacking is a long-term disaster management plan that not only focuses on response but more importantly prevention,” said Benito Lim, a political science professor at Ateneo de Manila University who advised the governments of Ferdinand Marcos and Aquino’s mother, Corazon. “What we need are permanent solutions like resettlement plans for flood-prone areas, more infrastructures like dams and waterways.”
While the record budget this year helped complete the Laguindingan International Airport in Mindanao, less than 60 percent of funds allocated for infrastructure and capital outlays had been disbursed by the end of August, government data show. Aquino is also struggling to implement a program where companies can help build airports, classrooms, hospitals, roads and railways through public-private partnerships.
Out of 47 planned projects estimated to cost more than $9 billion in the public-private-partnership program started in 2010, the Philippines is nearing completion of one that will provide about 9,300 classrooms designed to withstand earthquakes and floods, according to Education Secretary Armin Luistro.
“We are committed to fast-track the delivery of PPP projects,” said Cosette Canilao, executive director of the program. “We are working on solutions to address challenges including the long review and evaluation process.”
Projects such as a 17 billion-peso airport in Cebu and the 59.2 billion-peso extension of a rail line to the province of Cavite from Manila have been delayed by wrangling over terms and concern from some bidders over the risks involved.
Delays in fixing poor infrastructure are costing lives.
Eight-year-old Meme Empenado was buried under a landslide with her brother and two cousins when an earthquake struck her Philippine village on Oct. 15. A woman harvesting coconuts nearby heard them crying for help. By the time rescue workers arrived with equipment to dig them out two days later, they couldn’t even find the bodies.
Meme, 10-year-old Jess and cousins Joellene and Jonalyn Somoro, 11 and 13, were among more than 200 who died in the magnitude 7.2 quake in the province of Bohol.
When Meme and her friends died bathing in a waterfall near their village, Katipunan, they were just about 80 kilometers (50 miles) from the provincial capital.
“If they arrived earlier, maybe we could have saved them,” Aimie Diaz, Meme’s second cousin, said by phone on Nov. 5 from the neighboring island of Cebu, after visiting the village and finding her own family home had been destroyed. “All they managed to retrieve were pieces of clothes.”
The quake damaged 73,000 homes, as well as air and seaports, centuries-old churches, schools and hospitals. Four weeks later, Haiyan struck, affecting millions of Filipinos, mostly in the Visayas islands that include Bohol, the government said.
Together, the earthquake and Haiyan have displaced more than 826,000 people, the National Disaster Risk Reduction and Management Council said. Diaz, whose family is sleeping in tents, said yesterday by phone that they had survived the devastation. The government today raised a warning in parts of the Visayas and Mindanao for a new storm forming in the Pacific.
Typhoons, the Pacific equivalent of the Atlantic hurricanes, are an annual threat for Filipinos. For years, Angieline Siervo-Gamit’s family evacuated their house, built near a dam in Manila, each time a typhoon alert was raised. In 2009 their fears were justified when tropical storm Ketsana inundated the single-story dwelling, wrecking their possessions.
“We were all scared,” said the 27-year-old pharmacist, who decided to move to a nearby province after the birth of her first child this year, even though she’s struggling to pay for her new house, which is still unfinished. “We’re used to floods but that was the time we realized we could die. Now that I have a son, I can’t risk it.”
To protect the capital, the president approved a 351.7 billion-peso flood control master plan for the city, to be completed by 2035, Aquino’s spokesman Ricky Carandang said. The government has also implemented Project Noah, designed to give communities six hours’ advance warning of impending floods by integrating sensor and satellite readings with computer simulations.
“We’re increasing holding capacity, de-clogging waterways, widening rivers and relocating informal settlers,” said Carandang. “We are doing as much as we can.”
The archipelago of more than 7,000 islands lost more people to natural disasters than any other country last year, with more than 2,400 deaths, according to the Brussels-based Centre for Research on the Epidemiology of Disasters, or CRED.
The Philippines isn’t the only country in Southeast Asia to face evacuations and suffering from major natural calamities. In January, floods swamped Jakarta even after the local government began to dredge rivers and boost green spaces, while losses brought about by flooding in Thailand in 2011 were about 5 percent of annual gross domestic product, Maplecroft said in its Natural Hazards Risk Atlas 2013 report.
In 2004, an undersea earthquake off Indonesia caused a tsunami that killed more than 230,000 people in 14 countries.
The Philippines, battered by cyclones that form over the Pacific Ocean, is the second most-at-risk nation globally from tropical storms, behind Japan, according to Maplecroft. Tropical storm Washi killed more than 1,400 in 2011, and typhoon Bopha left more than 1,900 dead last year, according to the Centre for Research on the Epidemiology of Disasters.
The Philippines also lies along the Pacific Ring of Fire, where tectonic plates collide and about 80 percent of the world’s largest earthquakes occur.
In July 1990, a temblor killed more than 2,400 people on the main island of Luzon, while a magnitude 7.9 quake in the Celebes Sea off Mindanao in 1976 triggered a tsunami that left an estimated 6,000 people dead, according to CRED. Mount Pinatubo erupted in 1991, burying the province of Pampanga in ash and killing more than 800.
After corruption and conflict kept the nation’s economy stumbling through the 1980s and ’90s at an average annual expansion of 2.4 percent, leaving the country reliant on international aid, a revival in growth in the past decade and increased tax collection have given Aquino more wherewithal to improve citizens’ lives.
“Revenue collection has gone up through better efficiency and the economy is growing fast,” said Thomas Byrne, senior vice president for sovereign risk at Moody’s. That’s given the government room to invest money “that they would’ve spent on interest, to put it into public works and infrastructure,” he said.
While better preparation and logistics can save lives, even the most advanced economies are at risk from the power of nature. Hurricane Katrina in 2005 cost more than 1,800 lives in the U.S. when its storm surge inundated New Orleans. An earthquake and tsunami in Japan in 2011 killed more than 15,000 people and precipitated the country’s worst nuclear accident.
For the Filipinos trying to rebuild their lives after the latest disaster, the government is prepared to use 23 billion pesos from various agencies and Aquino’s discretionary fund for relief, the president said on Nov. 9.
In Bugasong town in Antique province in the Visayas, Filamor Songco rushed home yesterday to find only the walls of his house remained. The roof and almost everything inside had gone. Searching among the debris around the empty shell, Songco, 30, said all he could discover were a few scattered photos and books and a memento of his days at school.
“Amidst the rubbish, I found these medals and some of my ribbons that go way back to 1991,” he said by phone. “I remember I locked them inside my cabinet. I’m still thankful, because no one in my family got hurt.”
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