The Philippines said on Tuesday it may resort to more borrowing to fund 12 billion pesos ($258 million) in relief funds approved by Congress as the president created a panel to oversee reconstruction of typhoon-hit areas. Lawmakers from the lower house of Congress approved late on Monday a resolution setting aside more typhoon relief funds, a move that will likely widen the 2009 budget gap and prompt the government to borrow more, said Budget chief Rolando Andaya.
"We can fund it from borrowings, but they have to ensure that amount would be spent between now and December," Andaya told reporters. He told Reuters separately: "This will necessarily increase the (2009) budget deficit." He said the government was still studying whether to source the additional debt from local or foreign markets. But Finance Secretary Margarito Teves said on Monday Manila was prepared for more foreign debt issues, via either global bonds or a yen bond issue.
National Treasurer Roberto Tan said the government was expecting extra revenue of 14.4 billion pesos from its share in the sale of natural gas from the Malampaya field off western Philippines, an amount it can use for typhoon relief if its existing natural gas contracts allow it.
Before the typhoons, the Southeast Asian country was expected to post a record fiscal shortfall this year of 250 billion pesos, or 3.2 percent of GDP, a target which Teves had said was becoming difficult to hit due to persistently weak state revenues. The Senate began debates on increased typhoon relief spending and is expected to pass the measure later on Tuesday. Once approved, the measure automatically becomes law.
Disaster agencies said at least 650 people died and nearly 5 billion pesos worth of infrastructure were destroyed by floods and landslides due to heavy rains brought by two typhoons that hit the country since September 26. About 18.4 billion pesos in crops and fisheries were lost due to the typhoons, one of which hit the country's main rice-producing areas. The damage to rice output made up nearly 13 percent of the country's projected fourth quarter harvest, the latest report from the agriculture department showed.
President Gloria Macapagal Arroyo created on Tuesday a new body tasked to oversee typhoon rehabilitation efforts, ordering the group to ask the United Nations and World Bank to conduct a pledging session to seek foreign aid for typhoon relief. "I signed an executive order creating a special national public-private sector reconstruction commission to undertake a study on the causes, costs and actions to be taken in the wake of typhoons and seek fresh aid to fund reconstruction," Arroyo said at a cabinet meeting.
The United Nations has sent recovery specialists to devastated areas to conduct post-disaster assessment which would form the basis of the government's rehabilitation plan. "We are now working jointly with the government to assess the needs in the area," John Holmes, UN emergency relief co-ordinator, told reporters in Manila.
"Recovery will be a major issue in the coming months and years of work. The UN, World Bank and ADB (Asian Development Bank) are very ready to help in this complex area," he said. Last week, UN agencies appealed for help in raising $74 million to feed and provide shelter and medicines to more than 6 million Filipinos affected by the two typhoons since September 26. Holmes said some countries responded by providing a total $19 million in cash and goods.