The Daily Manila Shimbun

 

NEDA expects El Nino not to affect growth

March 29, 2019



The National Economic and Development Authority (NEDA) on Friday said they do not expect the El Nino phenomenon to affect growth.

“Given the contribution of the agriculture sector to GDP (Gross Domestic Product) is eight to nine percent then the impact will be proportionate to the percentage contribution,” Socioeconomic Planning Secretary Ernesto Pernia said in a press briefing in Pasig City.

Pernia said construction activities will not be hampered by the wet season.

“We need a dry season. Construction can be faster, 24/7 modality if the weather cooperates so that might be the unintended beneficial effect of El Nino,” he said.

He said the implementation of rice tariffication law is in time as it will provide the country to have more sources of affordable rice.

“Food prices will likewise be under control despite the possibility of supply constraints due to El Niño. Still, we have more work to do to make the agriculture sector resilient from extreme weather events,” said Pernia.

Pernia said this law will also help the farmers.

According to Carlos Bernardo Abad Santos, Assistant Secretary for Policy and Planning, compared to the two other sectors which are industry and services, agriculture’s contribution is smaller.

“Generally, when you look at the agriculture sector compared to the industry and services sector, it is small compared to the two other sectors so overall it might not be that substantial,” said Abad.

“We want to emphasize. We have very low agriculture rate last year. It’s .8 percent and normally you have less thunderstorms during El Nino phenomenon so there might also be some benefits later,” he said.

Abad added that when the Development Budget Coordination Committee revised the 2019 growth forecast to six from seven percent, they considered the weak El Nino.

“So we have incorporated that in our calculations. We already assumed it. Part of the revised target, however, depending on the response we have in all of these in terms of diversification and we can even, that may even be less of a negative impact,” he said.

In regards to inflation, Pernia said they are confident it will stay in the middle of the target range of two to four percent.

“We expect it to hit just the middle of the 2-4 percent range so about three percent. So if there are some impact on inflation then it would still be within or below four percent,” he said.

Assistant Economic Planning Secretary Mercedita Sombilla said the major rice producing areas have more or less harvested their production and rice prices are stable.

“So I don’t think we really experience a reduced rice production as a result of this El Nino. And if you note Pagasa’s report, it has already peaked actually and already weakening in the next couple of months,” Sombilla said.

“Plus rice tariffication, having the law (is) now effective. We expect more private sector to participate to get a rice import to beef up any domestic supply if some problems happen,” she said.

Damage to agriculture based on the data from Department of Agriculture is at P1.33 billion affecting 70, 353 hectares of agriculture area and a total of 84, 932 farmers.

NEDA said they are communicating with DA to verify the report of National Disaster Risk Reduction and Management Council that as of March 27, total damage to agriculture is P2.68 billion.

The agency is not expecting damage to crops to exceed P15.21 billion during the El Nino in 2015 to 2016.

Farmers who will be affected by El Nino will be covered by programs of Department of Agriculture, Department of Social Welfare and Development and Department of Labor and Employment.

NEDA is planning to re-activate the El Nino Task Force which is a holistic action plan to help prepare and mitigate the impact of the phenomenon in five critical areas: food security, energy security, water security, health and safety. Regional Development Office Undersecretary Adoracion Navarro said they are planning to recommend to President Rodrigo Duterte after their meeting last March 20 to re-activate the task force.

“In this regard the framework of RAIN (Roadmap for Addressing the Impact of El Nino) is being revisited and expanded to include specific interventions on some specific concern especially on water resource management to ensure greater water security for all including household, industries and services,” said Navarro.

“The other critical areas are identified in the old road map and remain with its specific interventions,” she added.

As of now, Navarro said there is no estimate how much will be needed to reactivate the program.

“But we will closely track the interventions of different agencies and see if additional resources or mobilization will be needed,” she said.

Other measures being recommend by NEDA is issuing an executive order strengthening the National Water Resources Board and transforming into the National Water Management Council which is a short-term strategy and an interim measure for water supply and sanitation.

“We hope (for) the president’s (Rodrigo Duterte) approval soon so in the next cabinet meeting that recommendation will be raised,” said Navarro.

For the medium to long term goal, NEDA is recommending to Congress to pass a law creating an apex body for the sector and a law creating an economic regulator for the sector.

Navarro said the goal of the apex body is to address weak and fragmented institutional setup. It will also consolidate water-related policy, planning, programming mandates of different agencies.

“The creation of an apex body would oversee the overall planning, programming and policy formulation and management of the water sector as well as fixing their regulatory environment are part of the strategies laid out by NEDA and its partner agencies in the Philippine Development Plan 2017-2022,” said Navarro. Ella Dionisio/DMS