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Post-Yolanda rehab to cost P361B over three years, says NEDA
Survivors move on as Christmas nears in Tacloban. Photo by Erik De Castro/Reuters
(Updated 7:09 p.m.) Rebuilding typhoon-hit Visayas will extend to 2017 and cost P361 billion, stretching government finances and putting its programmed budget deficit at risk, the National Economic and Development Authority (NEDA) said Wednesday.
The amount of investment to rebuild the towns and cities Central Philippines will be disbursed over four years under the Reconstruction Assistance on Yolanda (RAY) Plan, which was unveiled Wednesday to development partners during a meeting at the Department of Foreign Affairs.
The money will cover P183.3 billion in housing and resettlement costs, P28.4 billion in rebuilding public infrastructure, P37.4 billion in financing education and health services, P18.7 billion for agriculture, P70.6 billion for industry and services, P4 billion for local government, and P18.4 billion for social protection.
“The government has allocated about P34 billion for the critical immediate actions, which are now underway. Another P100 billion is forthcoming in 2014,” said Socioeconomic Planning Secretary Arsenio Balisacan, who is also NEDA director general.
The high cost of reconstruction “fully reflect” the costs of integrating disaster-resilient standards into the reconstruction needs for some sectors, as well as to address estimated income losses in agriculture enterprises, and to provide adequate social protection.
“We are espousing the build-back-better principle to make affected communities more resilient and sustainable,” Balisacan said.
After a pledging session with development partners, President Benigno S. Aquino III unveiled the government's timetable to meet reconstruction goals under the post-Yolanda roadmap.
On Nov. 8, Typhoon Yolanda raked through the Visayas, flattening towns and cities and killing over 6,000 people.
Breaching the deficit goal
In the RAY plan document, the government said costs recovery and reconstruction is expected to impact the fiscal deficit as a proportion of economic output in the next two or three years.
“A disaster of this magnitude will stretch government resources and could raise the deficit above the 2 percent to GDP (gross domestic product) target in the next two years,” the report read.
“Without outside support, responding to this event would undercut much needed infrastructure investments elsewhere in the country,” it added.
The government pegged the budget deficit at 2 percent of GDP, which translates into peso terms of P238 billion this year.
Staying within program
At a briefing Wednesday night after the Development Budget Coordination Committee (DBCC) meeting, Budget Secretary Florencio Abad said the government is sticking with its budget deficit program.
“No... There is no discussion on adjusting upwards the deficit cap,” he said. “We stay committed to our fiscal consolidation program which includes the deficit cap of 2 percent.”
For government to stay within the deficit ceiling, economic managers are tapping the assistance of development partners through emergency grants and loans that carry low interest rates and liberal grace periods.
“One reason why we when out to seek the assistance of our development partners is to ensure that our fiscal constraints will not be overstretched,” Balisacan said at the same briefing.
In the 10 months to October, the deficit stood at P112.5 billion, latest government data show.
The government has so far secured funding for the reconstruction of devastated areas for this quarter and next year.
“Well, in so far, as in the requirements for the last quarter of this year and next year... That's more or less secured. That’s about P134.5 billion,” Abad said.
The budget chief noted the funding for reconstruction in 2015 and 2016 is still “subject to continuing discussions with the donors.
