Power lack in key regions could cut GDP by P793 billion

By Bianca Cuaresma, BusinessMirror

Posted at Jun 03 2014 07:45 AM | Updated as of Jun 03 2014 03:45 PM

MANILA - The Bangko Sentral ng Pilipinas said on Monday some important regions in the country could falter and fail to contribute in full to the local output, measured as gross domestic product (GDP), simply because these growth-boosting regions experience inadequate power supply.

The various regions contributed to GDP a combined 7.93 percent, translating to more or less P793 billion when last surveyed in 2011.

The regions whose power-deficiency issues were cited in the BSP report included Mimaropa (Occidental Mindoro, Oriental Mindoro, Marinduque, Romblon and Palawan), the Bicol region, Zamboanga peninsula, Northern Mindanao and Soccsksargen.

According to the BSP, the adverse effects of extreme weather conditions and power-supply issues were the top challenges the identified regions have to face this year.

“Going forward, a key challenge to regional growth is local preparedness for natural disasters, including weather-related disturbances…. Another key challenge flagged by regions is the inadequate supply of electricity,” the BSP said.

The inadequate supply of power could prove significant, given that Northern Mindanao, for example, contributed 3.66 percent worth of services and goods to the nation’s local output based on 2011 government statistics.

The Bicol region contributed another 2.01 percent, the Zamboanga peninsula another 0.25 percent and Soccsksargen 0.22 percent.

Various government officials and private economists acknowledge the gravity of any power deficiency in certain places around the country considering that it takes more or less three to five years to build and put on stream a decent power-generating station.

In the central bank’s 2013 report on regional economic developments in the country, the BSP also said 10 out of 17 regions in the country do not own the confidence to say they are prepared to handle the physical and economic effects of climate change.

“Identifying opportunities and challenges faced by the different regions enhances further the BSP’s forward-looking and proactive approach to monetary policy,” the central bank said in its report, which was released on Monday.

Among the regions that raised their preparedness to the impact of climate change as one of the top issues in their region were the National Capital Region (NCR), Cagayan Valley, Central Luzon, the Bicol region, Central Visayas, Zamboanga peninsula, Davao region; South Cotabato, Cotabato, Sultan Kudarat, Sarangani and General Santos City (Soccsksargen) region and Autonomous Region in Muslim Mindanao (ARMM). Eastern Visayas’s issues all stemmed from the negative impact of the destruction wreaked by Supertyphoon Yolanda (international code name Haiyan).

“Building buffers to minimize the negative impact of typhoons and developing mechanisms for efficient response will help to ensure the resilience of these regions against natural calamities,” the central bank said.

Insufficient power supply, especially in the regions in Mindanao, was also cited as one of the top challenge for 2013 in the 2012 report on regional economic developments.

Several regions also cited the lack of appropriate infrastructure for roads and ports as key challenges in their region.

Poverty incidences and competitiveness against regional counterparts were also among the top challenges for the year.

Despite the foreseen challenges during the year, the BSP still expressed confidence that the Philippines would continue to post positive growth in 2014.

“Notwithstanding the challenges, the regions are gearing up for higher productivity in 2014, supported by the continued development programs by the government. The modernization of facilities and computerization of business processes are expected to facilitate the expansion of small- and medium-sized enterprises across the regions,” the central bank said.

“Moreover, the completion of several infrastructure projects such as bridges and airports are expected to sustain the vibrancy of local businesses and tourism,” it added.

In a related development, disaster officials warned Filipinos to brace for calamities this year as the scope of the devastation could prove even bigger than that which Yolanda inflicted on the country.

Officials said the debilitating impact of El Niño was also seen hitting the country this month.

The warning against stronger typhoons, which the country should expect more this year, was made by Science Secretary Mario Montejo during the launching last week of the “Iba na ang Panahon,” a program that seeks to integrate information on how to prepare and respond to disasters, particularly in Metro Manila.

Montejo said the country would definitely experience El Niño this year, in the form of stronger and intensified “tropical cyclones.”

“While we cannot stop the occurrence of natural hazards, we can definitely mitigate potential disaster risk in our communities,” he said.

On October 15, 2013, at least 200 people died in Bohol after a 7.2-magnitude earthquake struck the province.

Three weeks later, Yolanda also struck Bohol and the rest of the Visayas. Thousands of the affected residents are still living in temporary shelters.

Dr. Renato Solidum, Phivolcs director, also raised the possibility of another strong earthquake hitting the country.

Phivolcs has released a new set of strategies and protocols based on worst-case scenarios that tries to assess the scale of damage should a 7.2-earthquake hits Manila.

Solidum said although the Phivolcs already came up with a mitigation program, local government units (LGUs) must utilize “recovery time objectives” which is a timetable that monitors the recovery stage of government services such as hospitals and city halls.

He said the LGUs must also inform the communities on possible hazards they may face after an earthquake, such as fire that might break out from electrical short circuits and toppled candles and lamps.

Solidum introduced the concept of “disaster imagination,” emphasizing the use of information to prevent further loss and damages. Imagination is more important than knowledge,” he said, quoting Albert Einstein. - with report from Rene Acosta