Question 6

After the typhoon Haiyan devastation the Philippine economy experienced a recession during the period 2020-2021. Answer the following questions:

a) Suppose the Philippine Reserve Bank reduced interest rates in order to reduce the severity of the recession on the economy. Examine the effect of interest rate reduction in the Philippine economy. b) "The cost of rebuilding the Philippines aftertyphoon Haiyan could reach USD 5.8bn", a senior official has said. Assume the government of Australia Department of Foreign Affairs and Trade provided a grant of USD 5.8 billion. Also assume that despite the hardships the Philippine families experienced, 15% was the beneficiary savings from the Australian grant. Further, assume all other factors remain constant. 1. Calculate the total effect of the spending multiplier of the Australian government grant on the Philippine economy GDP growth.

2. Examine the overall multiplier effect of the USD5.8 billion grant on thePhilippine economy. Case Study: TYPHOON HAIYAN'S DEADLY IMPACT ON THE PHILIPPINES:

1. overviewPhilippine paddy rice losses from typhoon exceed forecasts-

Reporting by Enrico dela Cruz; Editing by Richard Pullin and Tom Hogue

MORE RICE, CORN IMPORTS LIKELY

Even before the storm hit, the Philippines had already planned to import an additional 383,500 tonnes of rice this year, on top of approved purchases earlier this year of more than 1 million tonnes. The state grains procurement agency, National Food Authority, also has a "standby authority" to import an additional 250,000 tonnes for delivery early next year.

Prospects of new deals with the Philippines pushed up export prices last week from its main supplier Vietnam. Production of rice in such countries became much cheaper that locally produced rice. The nation's rice crop losses from the typhoon were bigger than the agriculture ministry's forecast of up to 157,000 tonnes in a worst-case scenario.

"The rice sector could recover because we have coordinated with the National Irrigation Administration ... to not close the irrigation systems because right after the typhoon our farmers actually could replant," Pinol said in the interview. "But for corn, it's a sad sight. Almost all crops were damaged," he said. Pinol said he may recommend that the country also import corn to fill the possible shortfall. Pinol downplayed the impact of rice crop losses on prices, saying there are still enough stocks in typhoon-hit regions and that the harvest season in other areas has begun.As the news continued to spread, other media centres including Asia Pacific reported the devastation caused by the typhoon.

1. ASIA-PACIFIC NEWS

Philippines grapples with new crisis from typhoon

PUBLISHED FRI, NOV 22 201312:32 PM EST UPDATED FRI, NOV 22 20131:50 PM EST

A man cleans spoiled rice in a devastated area in Tacloban City in the Philippines.Getty Images

Typhoon Haiyan's deadly impact on the Philippines could get worse by leaving millions hungry if the country's farmers don't get help in replenishing the country's devastated rice harvestand the clock is ticking,an international relief and development organization has warned. The storm has spared nothing. Evening large trading stores in storm devastated areas; banks, roads, hospitals public and private, wholesalers. The areas are running out of essential commodities and services, petroleum products, no electricity, safe water, huge constructions firms have lost equipment. Needless to mention all business, services delivery and infrastructure has been destroyed. As rice retail store outlets became empty pushing rice price to skyrocket, imports became the solution from cheap rice producing countries. The country is likely to sink into a recession. To reduce the severity, international donor agencies appealed to the communities to begin buying other traditional foodstuffs such as fish and adobo. With increase in demand for rice as supplies reduced large rice importing stores needed subsidies from government so that rice price would be affordable to poor households. Imports have become cheaper. The international community has to intervene to save the situation.

"They need assistance, and they need it now," Gawain Kripke, director of policy at Oxfam, said in a phone interview. What's needed are new technologies, tools, fertilizer, seeds and machinery, along with efforts to clear irrigation channels and repair damaged agricultural infrastructure, he said. "They only have a few weeks until the December planting time, and time is running out," Kripke said. Rice harvests in the five Philippine regions most affected by Haiyan have been annihilated, according to Oxfam and the United Nation's Food and Agricultural Organization (FAO). Haiyan descended on the country just as farmers were harvesting the main season crop, which represents more than 50 percent of the annual production, according to an Oxfam release.

Oxfam said that missing the next rice-planting season in December would leave millions of Filipinos without their daily staple food, and would result in a huge loss of income and more debt for farmers. "Donors have naturally focused on giving immediate aid like shelter and health care, and that's very good," Kripke said. "But nothing's really coming in to help the farmers recover their agricultural livelihood that would help feed the people."Haiyan struck the Philippines on Nov. 8, leaving at least 5,000 people dead, according to the latest reports. Estimates indicate that the final death toll could reach 10,000. Some 2.5 million people have been displaced by the storm. Crop losses from Haiyan are valued at $110 million, with overall agricultural losses double that,according to the FAO. The cost of production has more than doubled. Imports have become cheaper. In short, hunger, starvation and disease is the result. Even areas that are not hit by the typhoon are affected. People have gone back to the villages to see how their relatives cope with life. Unemployment has become the order of the day and yet essential commodity prices are jumping into the roof. The situation is appalling and un bearable!

Though the Philippines is theeighth-largest rice producerin the world, it remains a leading importer of the grain. Reasons for the shortfall include the country's high population growth of 2 percent, which means that keeping pace with demand requires increasing yields at rates "rarely seen in history,"according to the International Rice Research Institute. The organization also cites a limited amount of land for agriculture and a poor irrigation infrastructure.

The FAO has called for $24 million in immediate aid to 250,000 households involved in agriculture and fisheries.This comes amid reports of the lootingof rice warehouses. On Nov. 13, eight people died on the island of Leyte when thousands rushed a storage facility and a wall collapsed. In this regard, the nation has to cope with a myriad of events for people to regain life. Poor households are worse hit in the countryside.

'Harvest could be useless'

Debris blown off houses during Typhoon Haiyan litters a rice field in Hernani, in the central Philippines.Ted Aljibe | AFP | Getty Images

1. Government intervention and donor agencies

Time is running out to help rice farmers in areas of the Philippines devastated by typhoon Haiyan Published November 21^st 2013.

Millions of people in the Philippines will go hungry in the coming in the coming months if rice farmers do not receive urgent assistance after typhoon Haiyan wiped out a third of the country's rice growing areas. Oxfam warns today

Rice crops harvests in the five regions most affected by the disaster have been decimated and missing the next rice planting season in December would leave millions of Filipinos without their staple food for daily consumption as well as a huge loss of income and increased debt for farmers.

Oxfam's Country Director in the Philippines Justin Morgan said: "Time is fast running out to get the assistance to poor farmers they so urgently need. They must meet the deadline for the planting season in December if they are to start to recover from the typhoon. "Failing to immediately provide seeds, fertilizer and tools will put millions of people at risk of severe hunger in the coming months, compounding the impact of the devastation caused by Typhoon Haiyan. Typhoon Haiyan hit the country just as farmers were harvesting the main season paddy crop representing over fifty percent of the annual production".

International help needed

Oxfam is calling on international donors to urgently help fill the funding gap for the agricultural part of the UN Haiyan Action Plan which is currently severely underfunded at less than 9 percent (OCHA 19th November). In the short term the Philippines National Food Authority (NFA) must also deliver rice from local harvests in areas of the country unaffected by the disaster to those in need and make sure farmers are receiving support to enable them to diversify the types of crops they can grow. The National Rice Farmers council spokesperson Jaime Tadeo said: "Farmers need help to recover from the devastation of their farms and livelihoods including locally adapted seeds, vegetables and other crops to diversify their sources of income."

Oxfam is there

Justin Morgan said: "Aid Agencies on the ground are providing as much support to farmers at this crucial time as possible. Oxfam teams are working in Samar and Leyte, two key rice producing areas, supporting farmers in clearing and restoring farm production areas."

"It is, however, essential for international donors to give more money for agriculture support right now so that farmers can plant more rice, diversify their crops and repair key infrastructure and therefore prevent an even greater food emergency down the line". Further, Justin Morgan said: "Aid Agencies on the ground are providing as much support to farmers at this crucial time as possible. Oxfam teams are working in Samar and Leyte, two key rice producing areas, supporting farmers in clearing and restoring farm production areas".

After Haiyan, the FAO downgraded its 2013 forecast for rice production in the Philippines from 18.9 million to 18 million tons. The 900,000-ton gap will be felt most acutely in the five regions hardest hit by the storm, the FAO said.

Complicating the situation is that harvested rice could be inedible. "A lot of what was collected and stored on farms is contaminated from the typhoon," said Kripke at Oxfam. "So even the current supplies on hand may not be able to feed people." Millions of dollars in international aid have been promised, and some of it is getting through. The Philippine government said nearly 25,000 relief workers, 104 ships and boats, and 163 aircraft from various countries have been deployed.

The Philippines set a goal of releasing 150,000 food kits a day, but the government has encountered logistical and infrastructure challenges in delivering them to those who need them.

The U.N. Development Program has pledged $5 million to help clear debris that is hampering relief efforts, but clean-up costs could be quadruple that amount,according to a UNDP spokeswoman.

Meanwhile, the economic planning secretary for the Philippines said that while the fundamentals of theits economy are intact, the final cost of rebuilding from Hayian could reach $5.8 billion.But the more immediate crisis of the rice harvest is what has drawn Oxfam's concern and, the organization hopes, the world's concern. "The window of opportunity for the next [December] planting season is closing quickly," Kripke saud."That's why we're calling on the international community to do more for the rice farmers and why we're raising this alarm now." By CNBC's Mark Koba.

1. Post-Haiyan rebuilding could cost billions, says Philippine minister

Typhoon relief efforts gathering pace with nearly 25,000 personnel deployed, but remote villages still desperate for aid

A family try to rebuild their destroyed hut in Tanauan, Philippines. Photograph: Dondi Tawatao/Getty Images,Wed 20 Nov 2013 03.23 AEDT

While responding to the effects of the typhoon Haiyan, the government of Philippines notes the typhoon Haiyan will a go a long way in memories of the country. In this regard, the government of a huge economic crisis that could sink Philippines into an economic deprecation that the nation has never experienced before.Accordingly, the government noted that there is need to rescue the economy of Philippines to go into recession. The cost of rebuilding in the swathe of thePhilippinesdevastated by typhoon Haiyan could reach $5.8bn, a senior official has said. Homes, businesses, public facilities and infrastructure were shattered by the fierce winds and powerful storm surge. At least 3,974 people are dead and 1,186 missing, with an estimated four million displaced.The government has already cut its growth estimate for the year, but Arsenio Balisacan, the economic planning secretary, said the fundamentals remained intact in one of Asia's fastest growing economies. "I would not be surprised if it can go as high as 250 billion [pesos, $5.8bn, 3.6bn]," Balisacan told Reuters, commenting on the likely cost of reconstruction.

The United Nations Development Programme has pledged $5m (3.1m) to help clear away debris that is hampering relief efforts. But Helen Clark, the programme's administrator, said four times that would be needed to clear rubble in affected provinces in the first phase of work.

Relief efforts have stepped up dramatically in the past few days. "It looks completely different to when I came in last week," said Valerie Amos, the United Nations humanitarian chief. "I'm really delighted that so much progress has been made, so much more aid is going out, and the people are getting the vital supplies that they need."

The government said nearly 25,000 personnel, 104 ships and boats and 163 aircraft from various countries had been deployed. Almost 90 medical teams, roughly half foreign and half local, are at work. Lieutenant General Roy Deveraturda, military commander of the Visayas - the island grouping hit by the storm - said the region would be divided into blocks to streamline relief efforts. "We're planning to ask the British Royal Navy to concentrate on the western Visayas region to assess and deliver food, water and supplies to smaller islands ... We already have the Americans in Samar and Leyte and Israeli doctors and relief teams in the northern tip of Cebu," he said.

Eduardo del Rosario, director of the National Disaster Risk Reduction and Management Council, said: "Basically, we've provided everyone with relief. What we are doing right now is sustainment." But in remote villages in Eastern Samar province, one of the areas worst hit by the storm, handwritten banners pleaded for attention and residents said they were in desperate need of aid. "Help us. We need food," said one message painted on blue plastic sheeting. In Hernani, where dozens of wooden houses were swept away and several villagers died, one family said there had been a single delivery of food and water, while others said there had been none.

"We don't have any choice over our future," said Nestor Candido, 39, as his family sheltered under a plastic sheet. "All we do here is plant vegetables and harvest coconuts and now this tragedy ... It will take time to get another harvest."