VZCZCXRO0437
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #4241/01 2780850
ZNR UUUUU ZZH
O 050850Z OCT 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3309
INFO RUEHZS/ASEAN COLLECTIVE IMMEDIATE
RHHMUNA/USPACOM HONOLULU HI IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 004241 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/EX AND EAP/MTS 
STATE PASS USAID 
STATE PASS USDA/FAS 
 
E.O. 12958: N/A 
TAGS: ECON EAID EAGR SENV SOCI RP
SUBJECT: Typhoon Aftermath: Assessing Economic Costs 
 
REF:  A) Manila 4162 
       B) Manila 4149 
      C) Manila 4144 
      D) Manila 4139 
 
Summary 
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¶1.  The death toll from Typhoon Milenyo may surpass 200 and the 
estimated damage to property and infrastructure exceeds $40 million. 
 Losses from power outages and other constraints on economic 
activity raise the costs even higher.  However, with electricity 
almost fully restored and streets cleared of debris, the government 
is downplaying the typhoon's impact on economic growth and expects 
to meet agricultural production targets despite heavy crop losses. 
We are suggesting to contacts that this experience should inspire 
more advanced planning for the next disaster.  End Summary. 
 
¶2.  Manila is returning to normal six days after Typhoon Milenyo 
(called Xangsane internationally).  Electricity is restored to 97% 
of the city's 12 million residents and the streets are mostly clear 
as work crews continue to remove fallen trees, power poles, and 
other debris.  The countrywide death toll is approaching 200, with 
another 22 missing as rescue teams work their way to more remote 
areas cut off by flooding and landslides.  The Philippine Government 
and the private sector are refining their assessments of the 
typhoon's impact on the economy and individual sectors, but 
estimates of damage to property and infrastructure exceed $40 
million. 
 
------------------------------------------ 
Sector-by-Sector Damage and Cost Estimates 
------------------------------------------ 
 
¶3.  Agriculture:  The Department of Agriculture estimated costs at 
$24 million, including crop losses (over $10 million), destruction 
of fishery pens, cages, and ponds ($5 million), and damage to 
livestock, and fruits and vegetables.  The worst-hit region was 
southern Luzon where farmers lost significant amounts of bananas, 
coconut, mangos, and papayas. 
 
¶4.  Power:  According to Energy Secretary Lotilla, the cost of 
repairing government-owned transmission lines, generating stations, 
and assets of electricity cooperatives may exceed $1 million. 
Losses by privately-owned Manila Electric Company (Meralco) will be 
higher, but no estimates are yet available. 
 
¶5.  Manufacturing:  Firms reported cases of broken windows, 
collapsed walls and torn off roofs that resulted in wet equipment 
and rain-soaked inventory.  For those firms in government-run 
industrial parks, the electricity blackout was not a problem as 
these parks have reliable back-up power.  Companies outside these 
zones had to use their own generators.  While large firms generally 
lost no more than one workday, smaller firms without generators 
suffered up to five days of lost production. 
 
¶6.  Construction:  The heavy winds damaged buildings and floodwater 
washed out bridges.  The National Development Corporation estimated 
structural repair costs to infrastructure and facilities at $8 
million, though this figure is rising daily with new discoveries. 
 
¶7.  Back-office Operations:  Call centers and business process 
outsourcing firms were relatively unaffected and remained in full 
operation, using high-powered generators to make up for electricity 
disruptions.  Manpower only dropped by 20-25% the day after the 
typhoon.  Firms had to pay overtime because the government declared 
two non-working holidays. 
 
¶8.  Telecommunications:  Fixed line service suffered little 
interruption and was fairly reliable throughout Manila.  Wireless 
operations, however, were spotty during and after the storm because 
many cell sites became misaligned and damaged, disrupting voice and 
data transmissions and causing big losses for wireless providers. 
 
¶9.  Energy:  Caltex had to close over 100 gasoline stations for 3-4 
days because of debris and damage to canopies.  Business is picking 
up quickly, however, as customers move to replenish diesel stocks 
for their generators.  Chevron lost millions of dollars in expected 
revenue from natural gas sales during the power outage. 
 
--------------------------------------------- --- 
Government Downplays Impact; Billboards Targeted 
--------------------------------------------- --- 
 
¶10.  The government is downplaying the impact of the typhoon on the 
economy.  The Agriculture Secretary expressed confidence the sector 
will meet its overall growth target for the year.  The Economic and 
 
MANILA 00004241  002 OF 002 
 
 
Planning Secretary told the press he did not expect to lower the 
country's economic growth projections.  Although the financial 
market was closed for two days, it has fallen only marginally in 
response to concerns over the impact on economic growth.  The peso 
continues to climb higher against the dollar, causing exporters to 
worry about price competition. 
 
¶11.  The most immediate after-effect of the typhoon is widespread 
outrage against large highway billboards.  Winds felled 20 signs 
along the South Luzon Expressway and many more in the city, 
including one that sliced into a stalled bus, causing many injuries 
and at least one reported death.  Members of Congress, press 
editors, and the head of the Manila Metropolitan Authority publicly 
denounced these billboards.  The Senate is considering a bill to 
restrict or abolish their use in defined areas.  Opponents of major 
restrictions include local administration officials who garner 
significant revenues from the ads, billboard owners, and private 
companies who depend on highway signs for marketing products. 
 
 
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Comment 
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¶12.  Although the damage was widespread, and locally severe in areas 
south of Manila, the country was spared from more calamitous impact 
if the typhoon had been Category Four or Five.  We are suggesting 
privately to government and business leaders that Milenyo be used to 
spur review of disaster plans to enhance their preparedness for the 
possibility of a more powerful direct hit in the future. 
 
Kenney