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NEDA backs state of calamity declaration in typhoon-ravaged areas

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Aerial shot of houses destroyed at the height of Typhoon Mangkhut at a village in Gattaran town, in Cagayan province, on September 16, 2018. — AFP

By Melissa Luz T. Lopez, Senior Reporter

THE National Economic Development Authority (NEDA) backed the declaration of a state of calamity in regions affected by typhoon Ompong, as it would allow authorities to impose price ceilings on basic goods to help soften inflation in hard-hit areas.

In particular, vegetable prices may surge anew given that Northern Luzon — a major source of vegetables — has been ravaged by heavy rains which caused floods and landslides last week, said Socioeconomic Planning Secretary Ernesto M. Pernia.

Agriculture Secretary Emmanuel F. Piñol has said that vegetables will be airlifted from Mindanao to satisfy demand in Luzon and the Visayas in order to prevent shortages that will further drive up prices.

“According to Sec. Piñol, they are quite abundant… I don’t know to what extent it can satisfy the requirements of Metro Manila and the Luzon and Visayas regions, but definitely it will impact the prices of vegetables, which has exhibited the highest inflation rate year-on-year,” Mr. Pernia said during the regular #AskNEDA briefing on Friday.

Inflation hit a nine-year high of 6.4% in August, led by surging food and oil prices due to limited supply. Prices of basic goods have gone up by an average of 4.8% during the first eight months, well above the 2-4% target set by the central bank.

Mr. Pernia added that NEDA has “taken the lead” in crafting a rehabilitation plan for areas struck by the strong typhoon, and has recommended to Malacañang that a declaration of a state of calamity be made covering Regions I, II, III and the Cordillera Administrative Region (CAR).

Typhoon Ompong (international name: Mangkhut) brought strong winds and heavy rainfall to northern Philippines last week. Initial assessments show over P14 billion worth of agricultural damage, while 63 of 295 roads as well as two of six bridges in affected areas were still impassable as of Friday morning.

There are over 1.6 million affected residents in these regions while 23 were reported dead, 21 injured, and two missing, according to the report of the National Risk Reduction and Management Council (NDRRMC) as of 6 a.m. Friday.

NEDA Undersecretary Adoracion M. Navarro said that the inter-agency NDRRMC on Thursday found basis for declaring a state of calamity in these areas, and will forward a draft resolution to President Rodrigo R. Duterte “within the week.”

Once declared, the government can impose price ceilings on basic goods, have stricter control on overpricing and hoarding, authorize the programming or reprogramming of funds for repairs and upgrades of roads and facilities, access international aid, and pursue negotiated procurement for goods needed in these regions.

“At this point, it’s difficult to predict what the impact on inflation is, but we are getting ready for that. One way of getting ready is to manage expectations… One way is this recommendation to declare a state of calamity,” Ms. Navarro added.

The government has extended P65.3 million worth of initial assistance to affected communities while an ongoing rapid damage and needs assessment is being conducted, the NEDA said. Japan and Australia have also pledged humanitarian assistance, Ms. Navarro added.

Finance Secretary Carlos G. Dominguez III previously said that issuing the declaration would likewise allow the Philippine government to unlock a special credit line from the World Bank, to be used for disaster response and recovery.

“We just want to get ready to access the World Bank fund because there’s always bureaucratic lag between initiating and the actual release of funds. But of course, we should really use first our own local resources,” Mr. Pernia added. “Only if there is further need for additional funds, then will we access the WB facility.”

Once signed, proclaiming a state of calamity in four regions means that the Philippines can tap a $497.5 million line from the World Bank within 48 hours. However, Ms. Navarro clarified that there are items in the 2018 national budget which can be tapped to finance rebuilding projects.

Among the options available to government is around P1.19 billion under the NDRRM fund, as well as a P13.66-billion unprogrammed fund meant to support infrastructure projects and social programs.

“What is important is that our recommendation to declare a state of calamity is a manifestation of swift action to decisively prepare for the possible adverse effects of the typhoon on poverty reduction and economic growth targets,” the NEDA official said.

The Duterte administration targets an annual economic growth of 7-8%, while reducing poverty incidence to an all-time low of 14%.