Press Release
October 26, 2010

Recto: Assess effects of typhoon Juan on 2011 budget

Sen. Ralph G. Recto today called on the Aquino administration to assess the effects of the damage brought by typhoon Juan on the national budget next year and make the necessary adjustments when necessary.

"Typhoon Juan has just planted itself to be one big macroeconomic assumption on the national budget next year. For sure, the damage it has created will affect our spending and our sourcing of funds," Recto, chair of the Senate ways and means committee, said.

"The real task is to determine how this will affect the budget for next year," he added.

News reports indicate that preliminary assessment of the damage resulting from the recent typhoon had been pegged at over P7 billion, with damage to crops, including livestock estimated at around P5 billion in Northern Luzon, particularly in the Cagayan Valley region.

"Given these facts, does this mean we have to import rice next year given that Cagayan Valley, which was badly hit by the typhoon, is the second largest producer of rice in the country?" Recto said.

"We cannot ignore the impact of the losses we incurred because of the typhoon. It would also take funds to rehabilitate what was lost like roads, bridges and other public structures," he further said.

Aside from these, he added, the damages resulting from typhoon Juan would also affect growth targets set by the administration for this year and 2011.

"How will these affect the country's fourth quarter growth or its overall growth targets for 2011? The administration may need to revisit its targets and take into consideration the recent onslaught of what is dubbed to be one of the strongest typhoons in recent memory," Recto explained.

For this year, the government expects to grow the domestic economy in the range of 5 percent to 6 percent while slowing down to 4 percent in 2011. Multilateral lending agencies, however, project a more optimistic growth of 7 percent this year.

But Recto stressed that the economic cost of typhoon Juan would surely dent the government's growth numbers.

The senator earlier said the government will have to dig deeper into its budgetary pockets to bankroll an immediate cash assistance plan to victims of typhoon Juan in affected provinces of Northern Luzon.

He said the Aquino administration could draw "emergency" funding to extend financial assistance to typhoon victims from the following: tap remaining funds from this year's conditional cash transfer (CCT) program and use savings from interest debt payments.

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