Wednesday, November 13, 2013

The Philippines struggle towards recovery

This appeared in Ti's e-newsletter on Nov. 12 in an abbreviated form. The full article is below.

Home to one of the fastest growing economies in Southeast Asia as well as the location for 10% of the world’s semiconductor manufacturing services for such devices as mobile phone chips and microprocessors, the Philippines was rocked by a powerful category 5 typhoon, the second such this year and as the country was still reeling from a recent 7.1 earthquake.

According to Maplecroft, a UK-based risk research company, the Philippine economy is the most at risk, globally, from natural hazards. In fact, the Asian Development Bank estimates losses from such natural disasters average $1.6bn annually, the most in South East Asia. Still, its economy has been a shining star among other Asian countries, growing 7.6% for the first half of 2013 as it moves from an agricultural-based economy to an industrial one.  Exports have been on rebound as global demand picks up, growing 2.3% in August with electronic products growing the fastest at 11.2%.

Much of the manufacturing and financial services are centered in the capital city of Manila which seems to have escaped the full brunt of the storm and is returning to some kind of normalcy. Meanwhile, in the hardest hit areas of the country, including Tacloban and Roxas City, airports and ports remain closed along with many roads.

According to the Journal of Commerce, Cebu‘s airport and port have reopened despite intermittent power and communication failures. Among the logistics and transportation providers with operations in this area, TNT reported that it had reopened its Cebu depot and that its employees were safe and operations were returning to normal. DHL Express’ operations in Cebu, where most of its customers are based, are also returning to normal. DHL Supply Chain’s Cebu operations have resumed as well. However, its operations in heavily affected areas — particularly Tacloban, Samar, Ormoc and Kalibo — remain suspended.

With 9.8m people affected, 660,000 displaced and local estimates of up to 10,000 deaths, international humanitarian aid has been quick to respond. However, the logistics of reaching those in need has been challenged due to the damage to infrastructure, roads, and airports. As such, many of these organizations have their own unique supply chain in which food, medicine, clothing and more are distributed to those in need. For example, Doctors without Border is delivering 200 tons of medical and relief items such as vaccines, tents and hygiene kits into Cebu on chartered cargo planes from Dubai and Belgium.

According to its website, the UN’s World Food Programme (WFP) is working with the government to set up operational hubs and organize airlifts of supplies. It is flying food, logistics and communications equipment to Cebu airport which is the closest functioning airport to Tacloban. From there, an airlift is needed to get the supplies to Tacloban. WFP is also mobilizing logistics supplies such as storage units, pre-fabricated offices and generators which are being sent from the UN Humanitarian Response Depot in Malaysia. These will be used to set up operational hubs at Tacloban and Cebu airports. Meanwhile, IT equipment including digital radios is on its way from Dubai.

It will take quite a while for the Philippines to fully recover from this latest catastrophic event and thus will see its economy likely take a hit as a result. However, it will recover and its infrastructure projects will probably be given a higher priority to complete in order to set the country back on the road to recovery.