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Remittances to offset Ondoy, Pepeng damages


Remittances are expected to "offset" economic damages brought about by two major weather disturbances that hit the Philippines, a socioeconomic planning official said on Tuesday. Cash sent home by Filipinos working abroad -- which continues to breach record highs -- will help boost the economy, even though a storm and a typhoon submerged provinces, flooded the Philippine capital, and destroyed farms. From January to July this year, remittances have risen 3.8 percent to nearly $10 billion, boosting consumption spending, which comprise 70 to 80 percent of the economy. Even though the storms' effects are expected to cut Philippine economic growth this year, losses will be shielded by rising remittances, Dennis Arroyo, National Economic and Development Authority (NEDA) director, told reporters. An estimated P9.76 billion worth of infrastructure and agriculture were damaged by the twin weather disturbances. As a result, the country's growth goals may be reduced by 0.2 percentage points this year owing to damages wrought by 'Ondoy' and 'Pepeng,' Arroyo said. The government's forecast may be cut to 0.6 percent to 1.6 percent from 0.8 percent to 1.8 percent. But the government will keep its growth targets because of robust remittances from overseas Filipino workers (OFWs). For the first half, the economy grew by only one percent, lower than the four percent expansion reported during the same period last year. In the meantime, the Department of Agriculture (DA) also cut farm output targets to between one to two percent, from an earlier goal of three to four percent. Agriculture comprises a fifth of the Philippine economy. For his part, University of the Philippines economist Benjamin Diokno said that it may be too early to predict what the impact of Ondoy and Pepeng will be on the economy. "NEDA's new forecast that 2009 GDP growth would be from 0.6 percent to 1.6 percent appears reasonable. But the impact of the twin typhoons is long and deep because of the wealth effect," said Diokno, who also was a budget secretary during the Estrada administration. But the government may still find it difficult to meet its targets owing to the confluence of events. Consumer confidence has dampened since the storms' victims -- especially whose houses were flooded in -- may not be as enthusiastic about spending, especially during Christmas, Diokno added. - GMANews.TV

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