‘Govt to still hit growth goal despite eruption’
Credit to Author: Anna Leah E. Gonzales| Date: Tue, 14 Jan 2020 16:23:36 +0000
THE National Economic and Development Authority (NEDA) assured on Tuesday that although the eruption of Taal Volcano on Sunday would have a negative impact on the country’s economy, it would not be enough to prevent the government from hitting its 2020 economic growth goal.
In a text message, Socioeconomic Planning Secretary Ernesto Pernia admitted that the eruption would have “some negative effect,” but added that “at its current scale and intensity, [it’s] not enough to derail [the country from reaching its] GDP (gross domestic product) growth target.
The government aims to grow the economy to between 6.5 and 7.5 percent this year.
“[T]he unpredictable behavior of Taal Volcano is just like other risks and uncertainties impinging [on] the economy,” Pernia said.
According to him, the eruption is an inflation risk, just like any other calamity.
The NEDA chief’s assurance comes as he attended an interagency meeting in Batangas province to assess the eruption’s impact.
“[The] preliminary assessment of [the eruption’s] economic impact [in terms of gross value added on] Batangas alone [is] P7.63 billion. Public and private damage costs not included yet,” Pernia said.
In a comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that, while the eruption could result in prices of commodities increasing, the gravity of the eruption’s impact on the economy was yet to be determined.
“This latest natural calamity could lead to some temporary supply or logistical constraints that could result [in] higher prices of food, agricultural products, fuel, transport and other basic commodities. Thus, inflation could somewhat pick up,” Ricafort explained.
“Damage to agriculture, businesses, livelihood and other properties, as well as some disruption in other economic activities, especially tourism and other commercial activities such as in Tagaytay, Taal and other nearby areas, could also adversely [affect] economic output and somewhat reduce GDP growth, depending on how long the natural calamity persists,” he said.
According to him, property prices in areas most affected by the eruption could decline, while the prices of supplies needed to cope with the disaster, such as face masks and other products in currently short supply, may have increased.
“Prices of utilities may also increase, such as electricity and clean water. Disruption of flights in Metro Manila and nearby areas could adversely affect tourism and the resulting constraints could raise ticket prices,” Ricafort warned.