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Socioeconomic Impacts of the Mount Pinatubo Eruption

By Remigio A. Mercado,¹ Jay Bertram T. Lacsamana,¹ and Greg L. Pineda¹

¹ National Economic and Development Authority, Region III, San Fernando, Pampanga, Philippines.

ABSTRACT

The Mount Pinatubo eruptions and their aftereffects, particularly lahars during rainy seasons, not only have taken the lives of many but also have wrought havoc to the infrastructure and to economic activities of Central Luzon. Damage to crops, infrastructure, and personal property totaled at least 10.1 billion pesos ($US 374 million) in 1991, and an additional 1.9 billion pesos ($US 69 million) in 1992. In addition, an estimated 454 million pesos ($US 17 million) of business was foregone in 1991, as was an additional 37 million pesos ($US 1.4 million) of business in 1992. Lahars continue to threaten lives and property in many towns in the provinces of Tarlac, Pampanga, and Zambales.

The actual destruction, coupled with the continuing threat of lahars and ash fall, has disrupted the otherwise flourishing economy of Central Luzon, slowing the region's growth momentum and altering key development activities and priorities. Major resources have been diverted to relief, recovery, and prevention of further damage.

The costs of caring for evacuees (including construction of evacuation camps and relocation centers) was at least 2.5 billion pesos ($US 93 million) in 1991-92, and an additional 4.2 billion pesos ($US 154 million) was spent during the same period on dikes and dams to control lahars.

The longevity and impact of the calamity is so great that the public and private response must go beyond traditional relief and recovery. Return to preeruption conditions is impossible. Instead, responses must create an attractive climate for new investments, provide new livelihood and employment alternatives, promote growth in areas that are safe from future lahars and flooding, and provide an infrastructure that is tough enough to survive future natural disasters.

INTRODUCTION

The eruptions of Mount Pinatubo and their continuing aftereffects have disrupted the flourishing socioeconomic environment in Central Luzon. Economic growth, which had been spreading to the region from Manila and which was slated for an extra boost from conversion of former U.S. military bases, has been weakened by the eruption. The auspicious development picture for the region has been replaced by uncertainty and delays. For the short and medium term, rehabilitation and reconstruction dominate socioeconomic planning; for the long term, planning needs to take advantage of new opportunities that are presented by massive rebuilding of the socioeconomic infrastructure.

This paper presents actual and projected damage arising from the Mount Pinatubo eruptions, their implications for Central Luzon's development, and broad directions that could be taken to respond to the calamity. This report is neither comprehensive nor complete, as the calamity is still ongoing.

NATURE OF THE DISASTER

During the June 15, 1991, eruption, heavy damage was caused by ash fall, which buried large tracts of land and collapsed roofs of buildings near the volcano. Although ash fell in varying amounts across the whole of Luzon, the most heavily affected provinces were those adjacent to Mount Pinatubo--Pampanga, Tarlac, and Zambales.

Continuing effects are now brought by lahars--rain-induced torrents of loose volcanic debris that flow down the major river systems around the volcano and out into densely populated, adjoining lowlands. Lahars destroy and bury everything along their path: people and animals, farm and forest lands, public infrastructure, natural waterways, houses, and other facilities. Infilling of stream channels has caused overbank flows, drowning of areas behind natural impoundments, and other forms of flooding in low-lying areas.

Secondary explosions also continue--explosions that occur when heavy rain and runoff come in contact with still-hot pyroclastic deposits on the volcano's slopes. These explosions produce fine, powdery ash fall that continues to impact, among other things, the former Clark Air Base.

REPORT ON DAMAGE

In the 2-year period since June 1991, the damage from eruptions and their aftereffects has been staggering and debilitating. Worse, it is expected to continue for at least several years more, until lahars no longer occur.

Damage is reported in different ways for different sectors. That for public infrastructure, natural resources, and military facilities is the estimated cost to repair or replace damaged assets. Estimates of damage to trade and industry include the cost to repair or replace facilities and projected income from foregone sales and service. Estimated damage in agriculture is the expected value of yield multiplied by the area damaged.

Except for the basic data on monthly foregone income per industry type (see table 8), which was provided by the National Statistics Office (NSO), all reports on damage provided below came from government agencies and departments involved in rescue, relief, reconstruction, and rehabilitation and were consolidated through the National Disaster Coordinating Council (NDCC). The NDCC used this information to recommend to the President of the Philippines which areas should be declared to be under a state of calamity.

The other legal body that facilitated information gathering on damage was the Presidential Task Force on the Rehabilitation of Areas Affected by the Eruption of Mt. Pinatubo and its Effects, popularly known as Task Force Mt. Pinatubo. Created by President Corazon C. Aquino on June 26, 1991, by Memorandum Order No. 369, Task Force Mt. Pinatubo was mandated to guide all rehabilitation efforts of the government and to coordinate these with the private sector and, whenever necessary, with the international community. In December 1992, the work of Task Force Mt. Pinatubo was taken over by the Mount Pinatubo Assistance, Resettlement and Development Commission (MPC) created under Republic Act No. 7637.

AREAS AND POPULATION AFFECTED

From June 1991 to November 1992, means of livelihood, houses, or both were partially or wholly lost in 364 barangays (villages) (table 1). About 329,000 families (2.1 million people), about one-third of the region's population, lived in these 364 barangays at the time of the 1990 census. In 1991, 4,979 houses were totally destroyed and 70,257 houses were partially damaged. The number decreased in 1992, when 3,281 houses were wholly destroyed and 3,137 units were partially damaged (table 2).

Of the 329,000 families (2.1 million persons) affected, 7,840 families (35,120 persons) were of the Aeta cultural minority (Office for Northern Cultural Communities, unpub. data, August 14, 1991). Although constituting less than 2 percent of the total affected population, these cultural minorities have received significant attention.

Table 1. Total number of barangays affected as of November 17, 1992 (National Disaster Coordinating Council, 1992).

["Affected" refers to a situation where means of livelihood, houses, or both are lost or partially or completely destroyed]

Table 2. Total number of houses damaged (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; Department of Social Welfare and Development, unpub. data, 1992).

[Partial damage refers to any degree of physical destruction attributed to the disaster. Total destruction is the condition when the house is no longer livable]

Table 3. Total cost of damage to infrastructure as of August 23, 1991 (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; Department of Public Works and Highways, Region III, unpub. data, 1991).

[The prevailing foreign exchange rate during this period was $1 = 27.07 pesos]

Table 4. Damage to Contract Reforestation and Integrated Social Forestry projects, 1991 (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; Department of Environment and Natural Resources, Region III, unpub. data, 1991).

[This damage was caused by ash fall and ash flow. Contract Reforestation--Regular DENR project involving a 3-year plantation and maintenance of forest trees through family-based, community-based, and corporate-based modes of contracting. Integrated Social Forestry (ISF)--community-based/family-based planting of 20% forest trees and 80% agricultural-based crops. Contractors are given a 25-year security of tenure through the certificate of stewardship contract (CSC)]

Table 5. Major river systems affected (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; PHIVOLCS/NEDA, 1992).

[Total lahar hazard areas include those prone to lahar deposition, siltation and flooding, and bank erosion]

Table 6. Actual damage to agricultural area by commodity as of July 1991 (Department of Agriculture, Region III, unpub. data, 1991; National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992).

DAMAGE BY SECTOR

PUBLIC INFRASTRUCTURE

In its damage assessment report as of August 23, 1991, the Department of Public Works and Highways (DPWH) Regional Office III estimated damage to public infrastructure amounting to 3.8 billion pesos (table 3). The gravest destruction was on irrigation and flood control systems, roads and bridges, and school buildings. Additional damage of at least 1 billion pesos was done to roads and bridges by lahars of 1992 (National Disaster Coordinating Council, 1992).

NATURAL RESOURCES

The Mount Pinatubo eruptions buried some 18,000 ha of forest lands in ash fall of about 25 cm (Paladio-Melosantos and others, this volume). The heaviest concentration of ash fall was in the mountains of Botolan and San Marcelino in Zambales, in Porac and Floridablanca in Pampanga, and in Bamban and Capas, Tarlac.

Reforestation activities have been seriously set back. Approximately 14,140 ha of newly established plantations were destroyed and some 125 million pesos worth of seedlings were lost (table 4). About 43,800 ha of natural forest cover and old plantations were damaged.

Heavy rains that came after the eruptions caused ash deposits from the mountain slopes to wash down to low-lying areas in the form of lahars. At least eight major river systems have been clogged by lahars (table 5; see also Arboleda and Martinez, this volume; Martinez and others, this volume; Pierson and others, this volume; Rodolfo and others, this volume; K.M. Scott and others, this volume; Umbal and Rodolfo, this volume).

AGRICULTURE

About 96,200 ha of agricultural land was seriously affected by ash fall. Damage to crops, livestock, and fisheries was about 1.4 billion pesos (table 6).

Damage from lahars, flooding, and siltation, as of November 17, 1992, was reported to be 778 million pesos (table 7). Of this, crops suffered the biggest damage (547 million pesos), followed by fisheries (165 million pesos), sugarcane (57 million pesos), and livestock (10 million pesos). The estimate of 778 million was later raised to 1,422 million (see table 10).

TRADE AND INDUSTRY

The manufacturing subsector, and consequently the exporting subsector, was heavily damaged. Lost assets for 559 firms totaled 851 million pesos. Foregone production losses for 1991 were reported to be about 45 percent of the potential sales for the year 1991, or 454 million pesos, and 424 million pesos of capital investment was destroyed at 306 surveyed firms. The furniture industry was hardest hit, with damage of 156.5 million in 108 firms. The processed food sector suffered 97 million pesos of loss in 18 firms, and the gifts, toys, and housewares sector lost 60 million pesos in 92 firms.

In 1992, foregone income in the manufacturing subsector was 1.5 million pesos per month, followed by the wholesale and retail subsector with foregone income of 846,000 pesos per month. Foregone income for the financial, real estate, and business services subsector was about 635,000 pesos per month, and that of the transportation, storage, and communication subsector was estimated to be 65 million pesos per month.

Total foregone income during 1992, in all sectors, was 3.1 million pesos. By province, industries in Pampanga and Tarlac had the greatest share of foregone sales, of 1.7 million and 0.6 million pesos per month, respectively (table 8).

SOCIAL SERVICES SECTOR

Health.--An increase in morbidity and mortality rates occurred mainly in evacuation centers. The leading diseases were acute respiratory infections (ARI), diarrhea, and measles (Department of Health, unpub. data, 1991). The death rate (Aetas and lowlanders combined) was 7 per 10,000 per week during 1991; that for Aetas in 1991 reached as high as 26 per 10,000 per week, and averaged 16 per 10,000 per week (Department of Health, 1992), and was especially high among Aeta children.

Social welfare.--The continuing threat of lahars has required that relief--food, clothing, shelter, and other help--be provided far beyond the period that is normal for typhoons and other calamities. As of October 28, 1993, approximately 1,309,000 people were being served outside evacuation centers. As of the same date, 159 evacuation centers were being maintained by the Department of Social Welfare and Development (DSWD) throughout Region III, housing some 11,455 families or 54,880 persons and providing them with food-for-work or cash-for-work assistance.

Education.--Destruction of about 700 school buildings with 4,700 classrooms displaced an estimated 236,700 pupils and 7,009 teachers. Damage to school buildings was estimated to be 747 million pesos as of August 1991 (table 9), an amount that is growing with continuing lahar activity. (Note: This value is also included within the category of social infrastructure in table 3.) Disruption of schooling is compounded by use of undamaged school buildings as evacuation centers, which forces delays in the opening of classes and causes other disruptions of the school calendar. Initial damage to instructional materials, furniture, equipment, and other school supplies was estimated at 93 million pesos (Department of Education, Culture, and Sports, unpub. data, 1991).

MILITARY FACILITIES

Damage to military facilities was considerable, but estimates of that damage are difficult to obtain or make. For the purposes of this report, we use an estimate of 3.8 billion pesos of damage in 1991 and no additional damage in 1992 (table 10). This estimate does not include heavy damage to former U.S. military facilities.

ALL SECTORS

In sum, damage and production losses resulting from the eruption and subsequent lahars were about 10.5 billion pesos in 1991 and 1.9 billion pesos in 1992 (table 10). These values include only damage and losses that are readily quantifiable. Additional losses, not included in these estimates, include human life, social fabric of communities, children's schooling, and a host of other, mostly social, items that are discussed in C.B. Bautista (this volume).

Table 7. Existing damage to agricultural commodities (in million pesos; Department of Agriculture, Region III, unpub. data, 1991; National Disaster Coordinating Council, 1992).

[Damage cost = total area damaged x expected yield per hectare. Expected yield is computed by referring to precalamity yield. Postcalamity yield is derived by referring to precalamity yield and subjecting the damaged crops to recovery chances/percentages. The value of the crops with negative chances/percentages is derived by multiplying them by the prevailing market prices of the crops. This value then becomes the damage cost.]

Table 8. Monthly foregone gross income per industry type per affected province for 1992 (National Statistics Office, Region III, unpub. data, 1992)

[The estimated loss to industry was based on the proportion of the affected households and their average expenditure on each type of industry. Does not include construction (52,689 pesos). No provincial breakdown available]

¹Municipality of Calumpit only.

²Includes Angeles City.

Table 9. Estimated cost of damage to school buildings by province or city as of August 12, 1991 (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; Department of Education, Culture, and Sports, Region III, unpub. data, 1991).

[Ash fall is the major cause for this type of damage]

Table 10. Existing sectoral damage and production losses, 1991-92 (in millions of pesos) (National Disaster Coordinating Council, 1992; Presidential Task Force on Mount Pinatubo, 1992; National Economic Development Authority, unpub. data, 1991, 1992).

Table 11. Gross Regional Domestic Product by industrial origin from 1987 to 1992 at constant prices, Region III, Central Luzon (in thousand pesos; Economic and Social Statistics Office, National Statistical Coordination Board, unpub. data, July 1993).

COSTS OF EVACUATIONS AND OTHER RISK MITIGATION

It is beyond the scope of this paper to discuss evacuations and other risk mitigation measures in detail. However, for comparison to estimates of damage, at least 2.5 billion pesos was spent in construction and operation of evacuation sites (Department of Budget and Management, Region III, unpub. data). About 4.2 billion pesos was spent in 1991-92 for dredging of river channels and for construction of dikes and dams to control lahars (Department of Public Works and Highways, 1992).

IMPACT ON THE REGIONAL ECONOMY

The 1991 Gross Regional Domestic Product (GRDP) of Region III accounted for about 9.4 percent of the Gross Domestic Product (GDP) (Economic and Social Statistics Office, National Statistical Coordination Board, ESSO-NSCB, unpub. data, July 1993). (The GDP is Gross National Product (GNP) less net factor income from the rest of the world.) The average growth of the region's GRDP from 1987 to 1991 was 5 percent per year (NEDA, Agricultural Staff, 1993). The largest contributor from 1987 to 1991 was industry (42 percent), followed by services (35 percent) and agriculture (23 percent) (table 11).

Because of the eruption, the GRDP in 1991 amounted to only 67.2 billion pesos, compared to the 1990 GRDP of 68.8 billion pesos (table 11). This represents a 1.6 billion pesos (2.3 percent) reduction in output. All sectors of the economy were affected by the eruption. Hardest hit were manufacturing, mining and quarrying, agriculture, and private services.

In 1992, GRDP amounted to 72.2 billion pesos, a 7 percent increase from 1991. Industry and services exhibited positive growth rates (Economic and Social Statistics Office, National Statistical Coordination Board, ESSO-NSCB, unpub. data, July 1993). However, agricultural productivity was still below the 1991 level because lahars took additional agricultural lands out of production in 1992.

RECOMMENDATIONS

The overall impact of the Mount Pinatubo eruptions is the slowing down of the region's growth momentum and alteration of key development activities and priorities. The calamity can, however, be taken as an opportunity, in which rehabilitation and reconstruction can aid in regional development. Specifically, rehabilitation and reconstruction should:

1. Mitigate further destruction, mainly from lahars and flash floods.

2. Normalize and accelerate economic recovery including the creation of an attractive investment climate.

3. Provide adequate livelihood and employment alternatives, especially for displaced farmers and workers (including those from Clark Air Base and the former Subic Bay Naval Station).

4. Promote growth and development in resettlement and new settlement areas that can serve as alternatives to heavily devastated or high risk areas.

5. Ensure the continuous flow of goods and services, especially during relief operations following future calamities.

6. Strengthen public awareness and institutional mechanisms for disaster preparedness.

7. Reduce the infrastructure's susceptibility to damage from lahars and other natural disasters.

8. Prevent future degradation of the environment and rehabilitate damaged ecosystems.

The complexity of these challenges and the expectation of more lahars to come demand no less than a well-coordinated, integrated response from the government sector, non-governmental organizations, and the victims themselves. With unity, selflessness, and honesty of those who serve and are being served, economic growth in the disaster-stricken areas of Central Luzon will become a reality.

REFERENCES CITED

Arboleda, R.A., and Martinez, M.L., this volume, 1992 lahars in the Pasig-Potrero River system.

Bautista, C.B., this volume, The Mount Pinatubo disaster and the people of Central Luzon.

Department of Health, 1992, Annual report for 1992: San Fernando, Department of Health, Region III, unpaginated.

Department of Public Works and Highways, 1992, Highlights of Mount Pinatubo infrastructure accomplishment: unpublished report, September 29, 1992.

Martinez, M.L., Arboleda, R.A., Delos Reyes, P.J., Gabinete, E., and Dolan, M.T., this volume, Observations of 1992 lahars along the Sacobia-Bamban River system.

National Disaster Coordinating Council, 1992, Damage from 1992 lahars of Mount Pinatubo, Update report re: Mt. Pinatubo related activities: unpub. report, Quezon City, National Disaster Coordinating Council, September 21, 1992, unpaginated.

National Economic and Development Authority (NEDA), Agricultural Staff, 1993, Philippine Development Report, 1987-1992: Quezon City, NEDA, September 1993, p. 2.

Paladio-Melosantos, M.L., Solidum, R.U., Scott, W.E., Quiambao, R.B., Umbal, J.V., Rodolfo, K.S., Tubianosa, B.S., Delos Reyes, P.J., and Ruelo, H.R., this volume, Tephra falls of the 1991 eruptions of Mount Pinatubo.

Pierson, T.C., Daag, A.S., Delos Reyes, P.J., Regalado, M.T.M., Solidum, R.U., and Tubianosa, B.S., this volume, Flow and deposition of posteruption hot lahars on the east side of Mount Pinatubo, July-October 1991.

Philippine Institute of Volcanology and Seismology and the National Economic Development Authority (PHIVOLCS/NEDA), 1992, Pinatubo Lahar Hazards Map: NEDA, Manila, 1 sheet at scale 1:200,000; 4 sheets, Quadrants 1-4, at scale 1:100,000.

Presidential Task Force on Mt. Pinatubo, 1992, Terminal Report on Mt. Pinatubo Rehabilitation and Reconstruction Program. Presidential Task Force on Mt. Pinatubo, Quezon City, November 1992, p. 3, 5-7, 9-13, and 23-26.

Rodolfo, K.S., Umbal, J.V., Alonso, R.A., Remotigue, C.T., Paladio-Melosantos, M.L., Salvador, J.H.G., Evangelista, D., and Miller, Y., this volume, Two years of lahars on the western flank of Mount Pinatubo: Initiation, flow processes, deposits, and attendant geomorphic and hydraulic changes.

Scott, K.M., Janda, R.J., de la Cruz, E., Gabinete, E., Eto, I., Isada, M., Sexon, M., and Hadley, K.C., this volume, Channel and sedimentation responses to large volumes of 1991 volcanic deposits on the east flank of Mount Pinatubo.

Umbal, J.V., and Rodolfo, K.S., this volume, The 1991 lahars of southwestern Mount Pinatubo and evolution of the lahar-dammed Mapanuepe Lake.

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