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Friday, March 29, 2024

Government eyes measures to limit impact of Taal eruption on economy

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The government is doing the necessary response measures amid the Taal Volcano eruption, as the affected regions of the National Capital Region, Southern Luzon and Central Luzon account for significant shares in the gross domestic product, Finance Secretary Carlos Dominguez III said Monday.

“The Southern and Central Luzon as well as National Capital Region are some of the heftier pistons of our country’s economic engine, and we will do what is necessary to get areas affected by this natural disaster up and running as fast as possible,” Dominguez said in a statement.

“Following the immediate human security responses, which are the priority, we will, of course, need to take stock of the full economic costs of this natural disaster, quick estimates of which are still being generated by relevant national agencies and local governments. The impact would depend on the type of eruption,” Dominguez said.

Dominguez said the Region 4-A composed of the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon (Calabarzon) accounted for 17 percent of the country’s GDP in 2018. The NCR, meanwhile, retained a share of 36 percent to total output. The combined share of these two regions was nearly 53 percent. Central Luzon’s share was also sizable at 9 percent.

The three regions were the most affected by the Taal Volcano ash fall that forced the shutdown of the Ninoy Aquino International Airport on Sunday and the closure of financial markets on Monday.

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Several bank branches were closed Monday as the Bankers Association of the Philippines advised its members to look out for the safety of their employees.

“Banks are encouraged to exercise management discretion to ensure the safety and welfare of their people during this emergency situation brought about by Taal Volcano eruption,” BAP managing director Benjamin Castillo said in a statement.

Malacañang also announced the suspension of government offices Monday.

BDO Unibank Inc., the biggest bank controlled by the Sy family, said a number of its branches in Central Luzon, Metro Manila and Calabarzon regions were closed.  Bank of the Philippine Islands also closed 33 banks located in Batangas, Cavite and Laguna. Security Bank Corp., the seventh-largest lender in terms of assets, said all its branches in Metro Manila, Calabarzon (Region 4-A) and Central Luzon were closed.

Dominguez said based on the government estimates, the country loses 1 to 2 percent of the gross domestic product due to natural disasters, especially from typhoons, every year.

He said there was in place a “Cat Bond” or catastrophe bond that “could be triggered by a 1-in-19 year earthquake that may be an aftermath of the Taal eruption.”

The Treasury said a “1-in-19” year event corresponds to a modeled loss of P11 billion. This loss would be similar to the losses during the 1990 Luzon earthquake in Nueva Ecija.

“We are likewise working on a natural catastrophe cover for our strategically important assets [schools, roads, and bridges], which would protect against natural catastrophes such as tsunamis, volcanic eruption, typhoons, earthquakes, and storm surges,” the Treasury said.

Dominguez said the government was monitoring the eruption of Taal Volcano in real time and continue to report ongoing response measures to the public and share its rehabilitation and recovery plans as the soonest possible time.

He said food packs and sleeping kits were on their way for affected families. For farming and fishing families, the Department of Agriculture and its attached agencies offered zero- and low-interest emergency loans.

Dominguez said evacuations were continuing and there were locations in Batangas and surrounding

areas that were covered in ash since the first explosion on Sunday.

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