MANILA - Economist Luz Lorenzo of ATR-Kim Eng said she is expecting the effects of Typhoons Ondoy and Pepeng to cost the economy half a percent of its gross domestic product growth for the year, as the government struggles to rebuild vital infrastructure and destroyed farms in the wake of both storms.

She stressed this is on top of the ill-effects of the global financial crisis that the government still has to deal with.

"Growth will be weak. Even without Ondoy or Pepeng, growth was already weak, so this time it will be much lower," she said.

Lorenzo pointed out that it will take the government 6 to 8 months before it can fully restore damaged roads, bridges and other infrastructure. Recovery will take even longer for private homes which were submerged in floods.

"Agriculture will be easiest, since crops will likely be restored by the next harvest season," she said.

According to the latest estimates of the National Disaster Coordinating Council (NDCC), damage wrought by both storms has already exceeded P10 billion, which is the proposed supplemental budget in Congress for the calamity fund.

Ondoy alone, as of 4 p.m. of October 5th, brought damages amounting to P9.77 billion. Pepeng caused damages of as much as P783.96 million.

But Finance Undersecretary Gil Beltran is confident that the government has sufficient cash to fund the supplemental budget and other costs needed to tide the country through Ondoy and Pepeng.

He cited the recently-completed P114 billion pesos collected from the retail treasury bond auction, in addition to available ODA from the World Bank and Asian Development Bank, and collections from possible privatization of the government's remaining assets.

"We'll try our best to stay within the P250 billion deficit target. We received some funds that have not yet been programmed. You would not see me here if there was no money," he stressed.

At this point, Lorenzo said proper spending of the government's budget is crucial for future growth.

"The government now has to find the most efficient use for its funds. Don't scrimp on maintenance, don't scrimp on social services," Lorenzo said.