Business World Online
Posted on July 17, 2014 10:30:32 PM
PARTS OF THE Philippines remained without power a day after typhoon Glenda (international name Rammasun) cut through the main island of Luzon, wrecking vital infrastructure and killing at least 40 people.
With analysts warning of the economic impact, officials said they expected electricity to be significantly restored to Metro Manila and neighboring provinces today but repairs in areas further south could take more than two weeks.
Energy Secretary Carlos Jericho L. Petilla said 84% of the capital already had electricity as of yesterday, while Manila Electric Co. (Meralco) said it expected to have nearly 100% of its franchise area energized by tonight.
The distribution utility, which was forced to implement rotating brownouts yesterday given a supply deficiency in the Luzon grid, said the affected power plants were expected to come online today and Saturday.
There was still no electricity in the province of Quezon while the Bicol region -- the first to be hit by typhoon late on Tuesday -- remained isolated from the Luzon grid.
Mr. Petilla said the main power lines in Quezon and Bicol were expected to be restored by July 19 at the earliest and July 22 at the latest.
With the extent of damage to transmission and distribution facilities still being assessed, “100% restoration will be in two weeks time at the earliest,” he added.
The National Grid Corporation of the Philippines (NGCP) reported that major power plants in south Luzon -- accounting for around 55% of total demand -- could not deliver power due to damaged transmission facilities.
Luzon demand yesterday was around 4,760 megawatts (MW) outstripping the 4,244 MW that was available, NGCP said.
The power plants affected include the San Lorenzo, Sta. Rita and Ilijan natural gas plants and Calaca coal plant in Batangas and the Quezon and Pagbilao coal plants in Quezon.
“We expect that there will be no more rotating brownouts tomorrow (Friday) as we anticipate these plants to go online,” Meralco Senior Vice-President Alfredo S. Panlillio yesterday said.
Mr. Petilla said the Energy department was not expecting further problems with regard to generation facilities.
“We are focusing on the restoration and we are hoping that the plants will come in as soon as possible,” he said.
In the Visayas, officials said some areas remained without power as the storm knocked down transmission lines in Samar.
Jose Rey Maleza, Energy Industry Management Division supervisor, said the Visayas grid remained on yellow alert because of very low reserves.
“We are still producing below the generation capacity for the grid, although the demand is also low,” Mr. Maleza said.
The Guimaras Electric Cooperative, meanwhile, resorted to rotating brownouts after a cargo vessel damaged a submarine power cable. It was not known if strong waves were a factor.
The power disruption, along with the other effects of typhoon Glenda, prompted Citi Research to declare a potential loss of 0.2% of real gross domestic product (GDP) per day.
“Not so much rains and floods, but strong winds spawned by Typhoon Rammasun brought down transmissions lines, caused private/public property damage and resulted in transport/distribution bottlenecks,” Citi economist Jun Trinidad said.
He said that based on 2012 regional GDP data, a one-day power outage affecting 70-90% of Metro Manila, Calabarzon and other parts of Luzon, would probably cost 0.2% of real GDP per day, or some P7.8-10 billion.
The estimate assumes “no power, no output” alongside disruptions and consumption slowdown but doesn’t include the cost of repairing transmission lines, fixing or replacing private property losses and infrastructure damage from the typhoon, among others.
“Rammasun’s wrath is comparable to the 140-kph winds spawned by Typhoon Milenyo (2006) that wrought damage totaling P5.9 billion. Certainly not a good start for 3Q14 (third quarter of 2014) GDP,” Mr. Trinidad said.
However, industrial or commercial users and industrial zones having standby power probably mitigated Citi’s loss estimate, he added.
“Damage wrought by Glenda that’s likely absorbed by the private sector e.g. Meralco (Metro Manila grid) with their strong balance sheets and recovery work/experience in previous disasters, should enable reconstruction/repair work to compensate for one-off losses and restore normal business conditions soon,” the economist noted.
“Slower fiscal spending could have a larger GDP impact rather than typhoon disasters.”
Inflation, however, could spike anew due to the damage caused to agricultural areas.
“More than power outages, transport/distribution bottlenecks and damage to farm output that constrain supply would have a larger impact on food inflation,” Mr. Trinidad said.
On Wednesday, DBS Bank, Ltd. and ING Bank similarly said that the onset of the typhoon season could pose additional upside risks to the domestic inflation outlook as it would further stoke supply-side pressures.
Economic growth eased in the first quarter to 5.7% from last year’s 7.7%, below the full-year goal of 6.5-7.5%.
Inflation, meanwhile, slowed to 4.4% in June from May’s 30-month high of 4.5%, bringing the year-to-date average to 4.2%. The central bank, which aims to keep inflation this year within 3-5%, has a 4.4% forecast.
The Agriculture department yesterday pegged farm damage at an initial P2.324 billion, with four regions -- Bicol, Calabarzon, Mimaropa and the Eastern Visayas -- bearing the brunt.
It said that 45,536 hectares of riceland had been damaged, equivalent to 80,781 metric tons (MT) or P512.7 million. A little over half, or 23,431 hectares, could recover.
Damage to corn, meanwhile, was pegged at P391.65 million or 42,448 MT. Of the 22,627 hectares affected, 19,214 have a chance of recovery.
For high-value crops, the damage was set at an initial P481.15 million. A total of 4,604 hectares was affected and 1,254 could recover.
Fisheries damage, meanwhile, was estimated at P810 million, while that for infrastructure was pegged at P123.2 million.
The toll from Glenda, Agriculture Secretary Proceso J. Alcala said, is not as bad as that of super-typhoon Yolanda, which devastated parts of the coconut-growing central Philippines last year.
While officials have downplayed the death toll, citing better preparedness following the devastation caused by Yolanda, the final tally is still expected to be higher than the 40 reported yesterday by the National Disaster Risk Reduction and Management Council. As of late afternoon, it said 17 had been injured and four were still missing.
The council also reported that the typhoon destroyed more than 26,000 houses, rendered 15 roads impassable and demolished four bridges.
The state weather bureau, meanwhile, reported that a tropical depression, currently east of northern Mindanao, would be entering the Philippine area of responsibility today. -- from reports by BusinessWorld Staff source
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