MANILA, Philippines - The destruction wreaked by super typhoon Yolanda (international code name Haiyan) on sectors like agriculture will push commodity prices higher for Filipino consumers in 2014, according to a local economist.
But University of Asia and the Pacific Associate Prof. Victor Abola was quick to add that food prices, particularly that of rice, are not likely to increase as there is a rice surplus in countries such as Thailand, Vietnam, Cambodia and India that can provide rice supply to the Philippines through importation.
Abola told reporters inflation could settle at around 4 percent next year and while this is within the 3-percent to 5-percent target set by the Bangko Sentral ng Pilipinas (BSP), it is higher than this year’s average of a little over 3 percent.
The impact of Yolanda on both inflation and economic growth, Abola said, could last for the duration of the entire first semester or from January to June next year. Abola maintained his forecast that growth will still be within the 7-percent range next year.
“The initial effect [will be] in the first quarter [because there was a] destruction of productive capacity mostly in the agriculture [sector],” Abola said.
But he said the oversupply of rice in Thailand, Vietnam and Cambodia is making rice prices cheap in the international market.
Abola said this was brought about by the reaction of farmers after the 2008 rice price crisis where farmers were encouraged to plant more because of the high price of the commodity.
“Even in the case of [Typhoon] Ondoy, my analysis was [there will be high inflation in] six months and [this] will dissipate in six months. So we are looking at two quarters essentially, in the fourth quarter this year and in the first quarter of next year,” Abola said.
Earlier, Socioeconomic Planning Secretary Arsenio M. Balisacan said the total damage and loss from Yolanda has been initially estimated at P571.1 billion. This, he said, includes physical assets, reductions in production, sales and income, as well as the value of increased operating costs resulting from the disaster.
The Reconstruction Assistance on Yolanda plan said the typhoon caused some P33.98 billion in damages and losses to infrastructure; agriculture, P62.11 billion; industry and services, P116 billion; and education, P23.9 billion.
Data also showed the damage to health is worth P5.57 billion; housing, P325.24 billion; and local government, P4.3 billion. The plan also said about 90 percent of the total damages and losses have fallen on the private sector with the remaining 10 percent on the public sector.