MANILA - As thousands of families were affected by the onslaught of Typhoon Ondoy, economists say there may be a dampening effect not only on the morale of the victims but also on the economy.

Economists polled by the BusinessMirror said a dampening effect may be expected, particularly in the second half of 2009. The third quarter, in particular, could be the quarter when lower-than-expected gross domestic product (GDP) growth will be seen.

The government said growth in the second half may be higher than 2.6% due to an expected increase in private consumption expenditure. In the second-quarter GDP growth announcement, the National Economic and Development Authority (Neda) said 2.6% growth is necessary to achieve the high end of the target growth range of 0.8 to 1.8% in 2009.

“[Typhoon Ondoy] hit both rich, middle and poor communities. In brief, its effect cuts across income class. Its dampening effect on the human spirit must be devastating,” former budget secretary Benjamin Diokno said via SMS.

First Metro Investment Corp.-University of Asia and the Pacific (UA&P) executive director Victor Abola also zeroed in on a dampening effect in the third quarter.

Abola said that initially, UA&P expected growth to be at around 2.3% in the third quarter before hitting a growth of 4.2% in the fourth quarter.

However, due to Typhoon Ondoy and the extent of its damage on lives, property and industry, there may be a 0.2-percentage-point reduction in their expectation, which will bring down their GDP growth forecast down to 2.1% in the third quarter.

“There will be an impact in the third quarter, probably a reduction by 0.2 percentage point, but our quarterly model shows good fourth-quarter [growth that can] bring annual growth above government targets,” Abola said via SMS.

However, Diokno is not as optimistic. He said that even before Typhoon Ondoy, he did not expect a strong rebound, particularly from agricultural output and manufactured exports.

Diokno said the typhoon further reduced the chances of hitting better growth in the second half of the year and, consequently, in the entire 2009.

He said GDP growth of between 1% and 1.4% for the full year “appears likely,” taking into consideration his earlier expectations and the possible effects of the typhoon on the economy in the third quarter.

“I have doubts about any strong rebound from agricultural output and manufactured exports even before the killer typhoon hit the country this weekend. The unprecedented flood has removed all doubts about a strong second half,” Diokno said via SMS.

“Strong capital formation is also in question. Note that capital formation is net change in investment. But with devastating damages to existing infrastructure, it is doubtful whether the government is capable of massive reconstruction within [or] in less than 90 days,” he added.

For his part, former Neda director general Cayetano Paderanga said that at this point, it is difficult to provide a forecast given the fact that the full extent of the damage has not yet been assessed.

However, Paderanga said it is likely that food prices may go up and that the increase in housing repairs and other infrastructure repairs could contribute to better GDP in the second half of 2009.

“[It is] difficult to say what will happen until we know the extent of the damage. Impact would be on agriculture [and] food prices may go up. Infrastructure repairs may increase GDP, though. [But we] still [have] to check [whether the] impact on other industries is material,” Paderanga said.

Metro Manila experienced the worst flooding in 42 years due to Typhoon Ondoy, which dumped in just six hours on Saturday a rainfall level that approximates an entire one-month average. The typhoon sent many residents in Cainta, Marikina, Pasig, Quezon City and other nearby flooded areas in Luzon to the roofs of their homes, as water swamped an estimated 80% of Metro Manila.

Based on the Philippine Atmospheric, Geophysical and Astronomical Services Administration, in only six hours, Typhoon Ondoy brought down 341 millimeters of rain in the metropolis.

The average rainfall in the whole of September is 391.7 millimeters. Typhoon Katrina, which flooded New Orleans, brought down only 250 millimeters of rainfall.