MANILA, AUGUST 11, 2012 (MALAYA) Written by ANGELA CELIS and IRMA ISIP - Economists yesterday said that the recent floods will drag down growth for the third quarter in contrast to government officials’ claim that the impact will be minimal.

It will be “ Ondoy-like” according to UP economist Benjamin Diokno who said that while it is still too early to make an assessment of the damages caused by the strong rains this week, it is likely to be “massive.”

“While the loss of life was much less compared to Ondoy, the impact on the economy would be Ondoy-like,” Diokno said.

Cid Terosa, University of Asia and the Pacific economist said growth will be reduced by at least 0.1 percent due to damage to agriculture crops and work stoppage,” Terosa said.

He added that the calamity will exert upward pressure on inflation since it will raise food prices.

“With the increase in gasoline and petroleum prices, inflation this month could be higher than last month by 0.2 to 0.5 percent,” Terosa said.

Meantime Trade Secretary Gregory Domingo said that the floods will have minimal impact on the exports sector.

The agency assured most of the country’s economic zones, save for Cavite in Rosario town, were not affected by the floods as they were located in flood-free zones especially those in Laguna and Batangas.

The Cavite ecozone, however, was flooded.

Agriculture Secretary Proceso Alcala also said impact on rice production will be limited since planting has just begun.

Lilia de Lima, director-general of the Philippine Economic Zone Authority, said no shipments were hampered.

The ecozones’ output account for about 80 percent of the country’s total exports.

Domingo said prices of goods have remained generally stable and within the suggested retail price and the supply of goods is adequate amidst the implementation of price control in areas under the state of calamity.

Diokno said that the areas that were hit by monsoon rains which eventually led to damaging floods account for about two-thirds of economic output.

The National Capital Region was one of the areas which suffered from the disaster, along with nearby provinces in Luzon.

“The loss in personal wealth is likely to be high, which could affect personal consumption,” Diokno said.

The former budget secretary added that recovery in the agriculture sector may be “protracted”, and the damages to existing public infrastructure may reduce net capital formation.

In a text message, Emmanuel Esguerra, Deputy Director General of the National Economic and Development Authority (NEDA), said that the agency is still in the process of obtaining information about the extent of damage brought by the recent floods.

“At the very least, the disruption in the supply of certain commodities will certainly have an effect on prices. By how much, we still have to assess as we get the information, Esguerra said.

The Aquino administration has a growth target of 5 to 6 percent this year.

Chief News Editor: Sol Jose Vanzi

All rights reserved