THE recent earthquakes in Mindanao could lead to a temporary rise in poverty and delay in infrastructure projects in the region, according to economists.
The destructive earthquakes that rocked various parts of Mindanao last week have destroyed office buildings and even medium-rise homes in the region.
University of Asia and the Pacific economist Victor A. Abola told the BusinessMirror that the recent earthquakes may not significantly affect GDP but could negatively impact poverty.
“I don’t think it would have a major effect on [the country’s] growth outlook, even for Mindanao. No important meeting facility has been affected [while] agriculture can recover quickly [with] funding from the national government. But, there may be a slight temporary uptick in poverty there,” Abola said.
Still, Abola said the earthquake’s possible impact on poverty will be less compared to the impact of the Marawi siege in Lanao del Sur.
Among the provinces severely affected by the earthquake are various parts of Cotabato and Davao del Sur, which experienced a magnitude 6.5 earthquake on Thursday.
Poverty incidence in Cotabato City was at 48.7 percent while in North Cotabato and South Cotabato, it was at 32 percent and 24.5 percent in the first semester of 2018. Poverty incidence in Davao del Sur was at 15 percent in the first half of 2018.
The other areas affected by magnitude 6 and below mostly belong to the Davao and Soccsksargen regions where the poverty incidence rates averaged 23.4 percent and 33.7 percent in the first half of 2018, respectively.
All these rates, based on Philippine Statistics Authority (PSA) data, are higher than the national average of 21 percent in the first semester of 2018.
In order to help these regions recover from the destruction of the earthquake, the government, in Abola’s view, should prioritize the implementation of housing and livelihood projects.
Infra affected
Apart from poverty, infrastructure projects could be affected in the region,
Ateneo Center for Economic Research and Development (Acerd) Director Alvin P. Ang told BusinessMirror. This could happen not because infrastructure projects were destroyed, but because civil works and manpower in the region will be redirected to rescue and rehabilitation.
He said this could be avoided if both the national and local governments have the capacity to address these infrastructure needs at the same time.
“There will be an impact definitely, but we might not see it in the fourth quarter because there are still a lot of activities. This should push for more government activities in infrastructure and to act fast,” Ang said.
“Of course there will be delays if structures were affected, but also if the government will shift its resources, including manpower and equipment, toward disaster relief,” he added.
Public investments
Based on the 2017-2022 Public Investment Program (PIP), there are 241 programs and projects (PAPs) to be solely implemented in Davao region and Soccsksargen worth P170.25 billion.
The bulk of these PAPs cover the 163 PAPs worth P144.05 billion that will be implemented in Davao region while the remaining 78 PAPs worth P26.19 billion will be implemented in Soccsksargen.
The PIP is currently being reviewed by the National Economic and Development Authority (Neda). The final document will be presented to the Department of Budget and Management (DBM) by the first quarter of next year.
Meanwhile, Housing Secretary Eduardo del Rosario told the BusinessMirror that the recent earthquakes will not delay any housing projects being conducted by the government, particularly in Marawi.
“The earthquake has no effect on the implementation of projects in Marawi. We are on target [and] Marawi projects have no damage,” del Rosario said over the weekend.
National Housing Authority Regional Manager and Head for Operations Victor C. Balba agreed. He told the BusinessMirror the NHA is committed to complete debris management tasks in the most affected area (MAA) in Marawi before the year ends.
Balba added that housing projects currently under construction are already in various stages of procurement.
As of August this year, the NHA said it was on track to meeting its commitments to Task Force Bangon Marawi of providing 4,852 transitory houses by April 2020.
NHA said 4,382 of these houses are on track to be built by the end of the year, and the remaining 470 transitory houses will be completed by April 2020.
If all goes according to plan, NHA said 2,000 permanent houses will be built for Marawi residents who can no longer go back to their homes and properties by May 2020.
Damage impact estimates iffy
Neda Undersecretary for Regional Development Adoracion M. Navarro told the BusinessMirror it is difficult to estimate how much impact the earthquakes will have on affected regions.
However, the response cluster agencies are currently restoring lifelines and delivering humanitarian assistance to all affected residents, Navarro said.
“The rehabilitation cluster agencies will immediately formulate the rehabilitation and recovery plan once we get [the] full information on the damages, losses and needs,” Navarro said.
She added that infrastructure projects in Marawi, meanwhile, will “proceed as planned,” and the earthquakes will not derail the development and investment potential of Marawi in the medium and long term.