The economics of natural disasters in the Philippines: an analysis of the effects of the 2006 and 2009 typhoon seasons on employment and output
Date
2013-04
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Abstract
This study focuses on the Philippines and the effects of typhoons of the final quarter of 2006 and 2009 on the employment of 17 industries. In addition, this study also analyzes the effects of natural disasters, in general, to output levels and% share of GDP of the 12 industries of production. Specifically, this study attempts to apply, in the case of the Philippines, what researchers have recently done in the United States, Australia and Japan. The study attempts to lay the ground work for future research in the field here in the Philippines. It should be clear that the study can be extremely beneficial to future policy makers and other economic planners given that the Philippines is geographically located within the Pacific Typhoon Belt. Available data from both international and local sources are utilized in this study. An adapted ARIMA model with intervention variables for the years 2006 and 2009 will be used to run econometric analyses on the 17 different sectors in the Philippines with regard to their employment growth from 2001 and 2011 and on the output level and% share of GDP of 12 industries from 1998 to 2012. The paper attempts to capture the effects over short and medium term periods so as to make a forecast of future effects possible. In the end, the results have showed all industries can withstand the effect of the typhoons; even the usual suspects (Agriculture, Fishing and Construction) are more robust than expected for employment. Despite heavy losses caused by typhoons, they are not sufficient to significantly alter the established trend of any industry's hiring practice. As for the output levels, only the industries of Forestry, Manufacturing, and Construction have increased their production after the year of 2009 in the medium-term. Moreover, in the medium-term after 2006, the industries of Mining and Quarrying and Manufacturing have taken a higher share % of GDP while the Electricity, Gas and Water Supply incurred loss and in the medium-term after 2009, the share was allocated to Forestry, Mining and Quarrying, and Other services from the lost % share GDP of the Agriculture and Fishing industry. The results bolster the suggestion of other studies that natural disasters may have a short -lived positive effect despite other sectors having long lasting negative consequences. Similar to the case of the Philippines, there have been instances of shifts in the industrial landscape by share of GDP.
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Keywords
Natural Disasters, Employment, Production, GDP, Sector