Regions

Haiyan devastates not only country, but may also affect economy

November 11
6:12 AM 2013

The Philippine benchmark index had its largest decline in the last six weeks amidst concerns from the consequent devastation from Super Typhoon Haiyan would affect the economic growth of the country. The peso also fell to its lowest in five weeks.

The Philippine Stock Exchange fell by 1.4% to 6,265.23 at market close in Manila. This is the largest drop since September 30. The Philippine Peso also fell by 0.9% to its current value of USD43.580 to the US Dollar. The bond yields on the local currency denominated government bonds maturing on Oct.2023 at 11.375%, increased by 12 basis points to 3.65%. The figures were according to noon fixing prices from the Philippine Dealing Exchange Corp.

The most powerful cyclone in the recorded history has estimated to have killed as many as 10,000 people as it caused flooding and flattened buildings. According to Bloomberg Industries analyst Jonathan Adams, nearly USD2 billion of the total USD14 billion damage would be covered by insurance. This was in a report quoted from Kinetic Analysis Corp.

The country's largest lender, BDO Unibank, through its chief market strategist Jonathan Ravelas, "There are concerns economic momentum will slowdown as the series of catastrophes could entail substantial reconstruction costs. This will be a big expense for the government and the damage we have seen from reports will impact growth."

Most of the damage inflicted by Super Typhoon Haiyan are on rice and sugar cane harvests. The hardest hit area is Eastern Visayas, which accounts for about 5% of total rice output of the country. Shortages have strained inventories according to the International Rice Research Institute. The Sugar Regulatory Administration reports the loss of nearly 120,000 tons of sugar products.

The difficulty in getting to the devastation ravaged area makes the death toll still subject to confirmation. According to the Red Cross in Geneva, citing Philippine authorities, the number of dead may reach 10,000. The official death toll by the National Disaster Risk Reduction and Management Council was at 229 as of 7 pm last November 10. The agency said that about 9% of the total population was affected by the superstorm.

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