Yolanda Devastation Underscores Vulnerability
BMI View: Following a catastrophic blow from super typhoon Yolanda, the Philippines is now dealing with the aftermath of what is likely to have been the deadliest natural disaster in the country's history. While Yolanda's devastating impact was limited to a region that accounts for a relatively small portion of the Philippine economy, it nevertheless underscores the country's substantial vulnerability to natural disasters, which are estimated to subtract an average of 0.5 percentage points (pp) from overall economic output on an annual basis.
The Philippines suffered a devastating impact from super typhoon Yolanda (Haiyan) on November 8, with initial assessments indicating that the storm was likely the most damaging in the country's history. Although appraisals are still in their preliminary stages, officials are already estimating the death toll to be above 10,000 in the hardest-hit city of Tacloban alone. Such a staggering figure would make Yolanda the deadliest storm in the Philippines' history (and, indeed, the country's deadliest natural disaster of any form), with the next deadliest storm being Tropical Storm Uring in 1991, which killed between 5,000-8,000 people.
The economic toll in the most affected areas is also estimated to have been catastrophic. According to Leyte government officials (the hardest hit-province, in which Tacloban is the capital), the storm destroyed as many as 80% of the structures in its path, with sustained winds reaching 315kph (approximately 195mph) and a storm surge of more than 6 metres. Although the latest Situational Report from the National Disaster Risk Reduction And Management Council (NDRRMC) states total reported damages to infrastructure and agricultural at PHP296mn (US$6.8mn), we believe that this figure reflects only a small fraction of the true damages that will come to light once more thorough assessments are completed. Indeed, the same report estimates that approximately 9,679,059 people (or nearly 10.0% of the country's total population) were affected by the typhoon, spread across 51 cities in 41 different provinces. Given the sheer scale of devastation caused by Yolanda, it is highly possible that total damages will surpass those of the previous record holder, Typhoon Bopha, which struck the Philippines in December 2012 at a cost of approximately US$1.0bn. Furthermore, although extensive aid pledges have been pouring in from around the world, the availability of critical supplies in the hardest hit areas remains extremely limited as a result of logistical difficulties.