More than GNP, other statistics, pay close watch on prices

Published January 16, 2020, 12:00 AM

by manilabulletin_admin

E CARTOON JAN 17, 2020
Taal  Volcano’s  eruption  is  bound to have  a negative impact  on  the national economy, but it  will not be enough to   prevent the attainment of the government’s 2020 economic  growth goal of  6.5 to 7.5 percent this year, Socioeconomic  Planning Secretary  Ernesto  Pernia,  chief of the National Economic and Development Authority (NEDA),  said Tuesday.

Taal  had  just erupted with  ash-bearing  smoke billowing a thousand meters up  in  the   sky.  The  ash  fell  on  a wide area around the volcano, some   blown northward by  winds. Much  of it fell  back to earth  where  it covered  the roofs  of houses , trees,  and  fields of grain and other  crops.  There were also some 200 earthquakes,  which  caused  cracks in concrete roads and houses.

Government  economic  officials  said they expect  some effect on  local production as measured by Gross Domestic Product (GDP),  but  their  greater concern  is the  risk of inflation.   The  calamity  could  lead to the  severe reduction of supplies of food and other agricultural products, Secretary  Pernia said, and this in turn could  lead to increased prices of food, coffee,  and other basic commodities,  as well as transport.  Prices   of utilities such as electricity and clean water may also increase, he said.

The  government  is  naturally concerned with  the GNP as this is the measure  of the progress of  the national  economy.  It is the means by  which  the  country’s economic advance  is calibrated  in comparison with  other countries.  It is the  figure international investors look at when they scout  around  for  places in which  to invest  their funds.

But more than GNP,  we hope the national government  will  be watching  the  other  figure – market  prices – more closely  in the wake  of   Taal  volcano’s eruption. There has been a diminution of supply—especially of food. Wide areas of rice and other farms  have  been  covered with  ashes. Many farmers have fled with their families  to safe  areas away from  their productive tasks.

The Department of Health has  also  warned  against  eating food from  Taal Lake – and this includes the well-known  tawilis — as the volcanic eruption has   released  toxic  materials into the surrounding water. More than a health problem,  the tawilis  problem  will deprive so many people living around the lake of the only food they can  afford.

There will be time enough  later this year to rehabilitate the farms and fishing, and  repair  the damage to various industries, including tourism which was particularly  thriving in Taal. For now, we hope the government  will  concentrate on  the prices and supply of the most basic needs of the people, the most important  of which  is food.