Taal eruption unlikely to dent Q1 growth — NEDA

The economic impact of the eruption of Taal Volcano in Batangas remains limited for now, barely making a dent on first quarter 2020 growth, initial assessment by the National Economic and Development Authority (NEDA) showed.

Ground assessment of damage to agriculture as well as income from industry and services output like tourism for Batangas alone, has so far amounted to P7.63 billion in gross value-added (GVA) terms, said Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia.

This pertains to the measure of the value of goods and services produced in an area minus the cost of inputs.

The cost of damage to public and private property and goods have not yet been included in the assessment.

Despite the huge damage, Pernia said this is still not enough to make a huge dent in first quarter growth for this year as this only comprises 0.3 percent of gross regional domestic product (GRDP) of the CALABARZON region, a geographical region grouping Cavite, Laguna, Batangas, Rizal and Quezon.

“P7.63 billion is only 0.3 percent of CALABARZON’s

GRDP,” said Pernia.

“(This will have) insignificant impact on Q1 GDP because that covers only parts of Batangas towns bordering Taal Lake,” he added.

Pernia was in Batangas to participate in inter-agency meetings and to assess the economic impact of the disaster.

The inter-agency Development Budget and Coordination Committee (DBCC) forecasts growth in 2020 throughout 2022 to settle at a range of 6.5 percent to 7.5 percent.

Inflation, meanwhile, is expected to settle between two to four percent this year.

Pernia acknowledged earlier though that the eruption, like any calamity, does create an inflationary risk that remains contained barring an escalation of volcanic activity.

Economists have said that the impact is so far localized, and that the damage expected to be incurred should be similar to a strong typhoon.

Despite the damage incurred in the affected ares, other growth engines of the economy will still deliver particularly consumer spending and infrastructure spending.

Alert level 4 remains raised over the vicinity of Taal Volcano, meaning a more powerful eruption is imminent, necessitating total evacuation of the surrounding areas.