What Could Have Been? Disaster Impact Analysis of Haiyan in Region VIII

Every year, typhoons in the Philippines wreak havoc on the lives of many people and on local economies. Typhoon Yolanda (Haiyan) caused 6,300 deaths and direct economic losses in 2013, much of it in Region VIII amounting to PHP68.7 billion. Equally important, albeit harder to estimate, are the subsequent economic losses resulting from the typhoon’s current damages to productive physical and human capital. The difficulty follows from the lack of a counterfactual—that is, the economic welfare in the affected areas that would have been realized sans typhoon Haiyan—to compare with the actual economic welfare post-Haiyan to assess the typhoon’s true impact. This is important especially since Region VIII’s economy appeared already on the downswing following a major fire in 2012. However, the economic slide may have been slowed down by the government and international organizations’ massive relief operations and rehabilitation programs in the affected areas. A counterfactual approach is important to determine the subsequent economic losses resulting from the typhoon’s current damages to productive physical and human capital. This, however, presents a challenging task owing to the lack of a counterfactual to compare with the actual economic welfare post-Haiyan to assess the typhoon’s true impact.