Typhoon shocks pose risk to growth - IMF

More frequent and destructive typhoons are increasingly acting as a double shock to the Philippine economy, with new analysis from the International Monetary Fund (IMF) showing that severe storms can simultaneously push up inflation and drag down output.

- By KEISHA TA-ASAN

In a report released in January, IMF staff found that the most intense category-5 typhoons in the Philippines act like adverse supply shocks, disrupting agriculture, damaging capital and rippling through supply chains.

Empirical estimates show that these storms raise regional headline inflation by about 0.4 percent and food inflation by around 0.7 percent, with the peak effect typically felt one quarter after landfall.

At the same time, regional output falls by roughly 0.4 percent on impact, translating to an estimated 0.2 to 0.3 percent drag on aggregate gross domestic product (GDP), while agricultural labor productivity declines by about 2.5 percent.