”The government will have to cough up higher than P5 billion in calamity funds that even the additional P1.75 billion that the President inserted in the budget would not be enough to cover the losses and destruction from the natural calamities expected to strike in 2011,” Recto said.

With 20 to 22 tropical cyclones already lining up to visit the country this year, Recto said the P6.75 billion calamity fund would be depleted by the time the first dozen of typhoons have finished wreaking havoc and leave a trail of destroyed homes and crops.

Recto said savings are expected from debt interest expense, which was pegged on an exchange rate of P47 to the dollar, and therefore, bloated by P7.7 billion if the peso appreciates to P44 against the greenback this year.

The government has set aside P357 billion for debt interest payments alone this year, of which P120.8 billion will be used to service foreign obligations. This is the amount to be paid on interest alone of the principal debt stock, which has grown to P4.68 trillion as of October 2010.

According to Recto, using a P44 to the greenback exchange rate would effectively reduce interest payment for foreign debt to P113.2 billion or a “savings” of P7.7 billion.

Recto said another P740 million could be saved from the P7.5 billion allocation for the subsidy of the Metro Rail Transit (MRT) 3 system this year since it was premised on a currency rate of P50 to the dollar.

At an exchange rate of P44 to the dollar, the subsidy savings would be P740 million.

The senator said savings from interest debt payments and MRT-3 subsidy could further increase should the peso appreciate to P41 to P42 to the dollar as estimated by banks and financial analysts.

“The President can realign savings for calamity fund,” Recto, chair of the Senate ways and means panel, said.

He said aside from urban dwellers to be affected by flash floods, the most severe blow will go to the agriculture sector and the farmers every time a powerful typhoon strikes.

Recto said savings channeled to the calamity fund must prioritize the little people of the countryside who always bear the brunt of devastating typhoons.

“The farmers must be helped to get back on their feet,” he said.

“If we are not losing them through aging, we are losing them through typhoons. We must cast a wide safety net at them," Recto added.

Based on the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), at least nine rural areas are considered “high-risk” areas for the typhoons this year, namely: Cagayan Valley, Aurora, Quezon, Bicol, Samar, Leyte, Surigao, Dinagat Island and Catanduanes.

Manila Bulletin