Reposted from article by Macan Nia
Over the weekend, we were once again reminded of the destructive capability of Mother Nature. Typhoon Haiyan made landfall in central Philippines with winds at 315 km/hr (195m/hr) at its top, the strongest in recorded history. I look in awe at the magnitude of the storm from a photo taken from the International Space Station by astronaut Karen L. Nyberg. Each year, the earth experiences multiple devastating natural disasters (hurricanes, earthquakes, flooding, wild fires), it is an eye opening to witness such a storm develop and cause as much destruction as it has. It is a reminder of how powerful and unpredictable nature is.
Hurricane? Cyclone? Typhoon? They are all the same; they are cyclic movements of the air caused by depression in the atmosphere. Their differences in names derive from their location on earth. In the Atlantic, Caribbean and central and northeast Pacific, the term hurricane is used; in the northwest Pacific, they are typhoons; and they are known as cyclones in the Bay of Bengal and the Arabia Sea. A tsunami on the other hand, is a tidal wave caused by an earthquake (for example, the South East Asian Tsunami that occurred Boxing Day 2004, killing 230,000 people and devastating 14 countries).
Once a storm develops 120-150 km/h (75-95m/hr) winds, it becomes a hurricane and officially receives a name. In the Atlantic region, there are six lists in use. At the end of each year, the current list is rotated and will not be used again for six years. Naming began in 1953, and hurricanes were given female names similar to ships. In 1979, the use of alternating male names was introduced.
With the exception of a few, the names are recycled. Names of storms that are classified as devastating in which reusing the name may create anxiety are removed from the list. Recent removals include Andrew and Katrina. The list starts with A and ends with W with the exclusion of Q and U – who can blame them; can you think of 6 names starting with either x, y, z, q and u?
There are five levels of strength and the strongest level is a category five with wind speeds of 249km/hr (155m/hr). North of the equator cyclones rotate counter clockwise and south of the equator they rotate counter clockwise due to the Coriolis Effect (i).
Typhoon Haiyan was the worst recorded since Hurricane Allen in 1980 which clocked in at 305 km/hr (190 m/hr). Haiyan hit the Philippines at 315 km/hr (195m/hr). To put this into perspective; Hurricane Andrew reached 280 km/h (175m/hr) and Hurricane Sandy reached 185 km/hr (115 m/hr).
The images coming out of the city of Toclima (former population 200,000) portrays a humanitarian crisis unfolding in specific hard hit regions. The storm’s path may have spared the broader Philippine economy. The storm’s impact was modest in and around the capital Manila. Manila itself is responsible for one third of the country’s economy that is currently growing at 7%. It’s a diversified economy and recently has been a focus of outsourcing call centers. English is widely spoken in the Philippines. The country’s education system preference is for American English. For example, children are taught the alphabet in English and how to read and write at a young age. As a result, companies like Expedia and JP Morgan Chase have set up operations there. Approximately 400,000 Filipinos now spend more time talking to developed countries, more than in India.
In the event that the economy begins to slow, the central bank has the ability to decrease its interest rate, which is at 3.50%. After the Thailand typhoon in late 2011, the central bank reduced the overnight rate from 3.5% to 2.75% throughout 2012 in response to the worst flooding in 70 years. The Philippine’s economy is more diverse, as their exports make up only 33% of their GDP, much lower than Thailand whose GDP is 77% reliant on exports. It appears that Vietnam escaped the brunt of Haiyan force as it made landfall in Northeast Vietnam in Ha long bay sparring the majority of the economy tied to agriculture and manufacturing.
Manulife has operated in Asia since 1897, and has operated in Philippines since 1907. As a result, Manulife has close to 700 employees, and over 4,000 agents in the country. In Toronto, we have prominent Filipino community, and at Manulife that is true as well. At this challenging time for the country, our thoughts are with the victims and their family.
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M a c a n N i a | Manager | Portfolio Advisory Group | Manulife Asset Management
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Macan_Nia@manulife.com | 416 926 3000 ext. 228709