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The eruption of Pinatubo severely hampered the economic development of the surrounding areas. Extensive damage to buildings and infrastructure cost billions of pesos to repair, and further costs were incurred in constructing dikes and dams to control the post-eruption lahars.

In total, 364 communities and 2.1 million people were affected by the eruption, with livelihoods and houses being damaged or destroyed. More than 8,000 houses were completely destroyed, and a further 73,000 were damaged. In addition to the severe damage sustained by these communities, roads and communications were damaged or destroyed by pyroclastic flows and lahar throughout the areas surrounding the volcanoes. Total losses in 1991 and 1992 alone were estimated at 10.6 and 1.2 billion pesos respectively, including damage to pubolic infrastructure estimated at 3.8 billion pesos.[17]

Many reforestation projects were destroyed in the eruption, with a total area of 150 square kilometres (37,000 acres) valued at 125 million pesos destroyed.Agriculture was heavily disrupted, with 800 square kilometres (200,000 acres) of rice-growing farmland destroyed, and almost 800,000 head of livestock andpoultry killed. The cost to agriculture of eruption effects was estimated to be 1.5 billion pesos.

Space Shuttle (Mission STS-43) photograph of the Earth over South America taken on August 8, 1991, showing double layer of Pinatubo aerosol cloud (dark streaks) above high cumulonimbus tops

Damage to healthcare facilities, and the spread of illnesses in relocation facilities, led to soaring death rates in the months following the eruption. Educationfor thousands of children was seriously disrupted by the destruction of schools in the eruption. The gross regional domestic product of the Pinatubo area accounted for about 10% of the total Philippine gross domestic product. The GRDP had been growing at 5% annually before the eruption, but fell by more than 3% from 1990 to 1991.

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