Growth target of 3.5% for agri will not be met

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, “the growth target of 3.5 percent for agriculture will not be met given the damages caused by storms Ondoy and Pepeng, as announced by Agriculture Secretary Arthur Yap. Sec. Yap said that agriculture output growth could be between 2.0-2.5 percent as damages estimate is nearing Php7 billion.

However, Malacañang reassured the public of enough food supply amid the onslaught of two storms that caused Php7 billion worth of damages in the agricultural sector. Department of Agriculture Secretary Arthur Yap, assured that there is enough stock for the whole year but the impact on supply could be felt by the first half of 2010.

Likewise, per same published report, businesses in Metro Manila alone lost at least Php1 billion to the floods brought by tropical storm Ondoy, according to the Philippine Chamber of Commerce and Industry (PCCI). The pulp and paper products, flour, hospital supplies and equipment and shoes sectors based in Caloocan, Navotas, and Marikina suffered losses amounting to almost a billion, the PCCI president said. Furthermore, consumer prices started to pick up as inflation rate settled at a faster pace of 0.7 percent in September, the first time in seven months according to the National Statistical Office. Higher food costs contributed to the price spike.

Also, rice farmers in Cagayan, Isabela, and Ilocos are going further into debt as rice farms were laid to waste by storm Pepeng. Most families in northern Luzon depend on farming as their main source of livelihood, with many of them as either tenants or owners of small farms.

Meanwhile, the Manila Electric Company claims it may have lost close to Php1 billion due to damages and disruptions caused by tropical storm Ondoy, which have caused massive flooding in Metro Manila, Rizal and Laguna.

 On the positive side, the Bangko Sentral ng Pilipinas (BSP) gained Php2.9 billion in net income for the first quarter of the year coming from a Php 24.8 billion net loss recorded in the same period last year. Despite low interest earnings, which is BSP’s biggest source of cash, dipping 14.2 percent, the BSP realized a positive net income due to foreign exchange fluctuations and trading gains. The government is also considering a third dollar bond issue amounting to $250-$500 million this year, yen bonds, and more domestic debt to fund next year’s budget deficit of Php260 billion, Php10 billion higher than the planned budget deficit. Lawmakers, meanwhile, are considering a Php10-billion supplementary budget for this year after Metro Manila experienced massive flooding due to tropical storm Ondoy.

Lastly, the Philippines’ gross international reserves (GIR), the main cushion against foreign exchange shocks, has improved to a new record high of $42.3 billion in August on the back of sustained growth in remittances and investments inflows. The Bangko Sentral ng Pilipinas is reconsidering its GIR estimates, which it previously forecasted to be $38.5 billion at the end of this year, according to IDEA.

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