PHL typhoon rebuilding this year may cost 50% more, Abad says

The cost of typhoon reconstruction this year could reach P138 billion ($3.1 billion), more than 50 percent higher than initially estimated, as the Philippines seeks to build back better and put in safeguards for future disasters, Budget Secretary Florencio Abad said Thursday.

 

The total cost of a four-year reconstruction effort may also end up steeper than the current estimate of P361 billion, Abad added.

 

Typhoon Yolanda (Haiyan), one of the strongest storms to make landfall anywhere, laid waste to almost everything in its direct path when it swept ashore in the central Philippines on Nov. 8. At least 6,190 people were killed while 1,785 are still missing and 4 million were rendered homeless or left with damaged houses.

 

"The plan was P90 billion for the year, but I think it will be more," Abad told Reuters in his Manila office, adding that typhoon-related spending would reach P138 billion.

 

"I don't think they (reconstruction planners) have factored in the need to introduce resiliency. So that will be 10-30 percent more."

 

Apart from the immediate need for temporary shelter, providing jobs and restoring water, health and sanitation services, the government underestimated other costs, including that of identifying and documenting the dead before they are buried.

 

"There is an international standard for doing it, before you bury them, that wasn't factored in. That's a lot of money already," Abad said, adding the government could adequately finance a higher post-typhoon spending bill this year.

 

Manila has set aside funding of P54 billion for the rebuilding effort from a supplemental budget passed late last year, this year's national budget, savings, calamity and other funds. At least P80 billion more would come from concessional loans offered by the World Bank, Asian Development Bank, and the Japan International Cooperation Agency.

 

"We can fund it. The question is, can we absorb it? That is why we have to start early," Abad said.

 

Going forward, the Philippines, which is hit by an average of 20 typhoons a year, is considering not only building typhoon-resilient structures but also permanent evacuation centers equipped with generators and supplies – an initiative that wasn't part of initial plans.

 

The government is also considering major infrastructure projects in the central Philippines, such as relocating the coastal airport in Tacloban, the city that bore the brunt of the storm.

 

The reconstruction effort will ensure the country hits the midpoint to higher end of its 6.5 to 7.5 percent growth target this year, Abad said, adding growth in 2013 was likely to be near the top end of the government's 6-7 percent goal.

 

That view is shared by economists, with Citibank forecasting growth of 7.3 percent this year. Local investment bank First Metro Investment Corp has said it projects growth 2014 at 7-7.5 percent, buoyed by strong domestic demand and rehabilitation in disaster-hit areas. – Reuters