MANILA - A powerful typhoon moved out to sea on Sunday after thrashing the remote northeastern Philippines and killing 17 people and may remain there for days, bringing more rain and possible landslides, officials said.

Typhoon Parma, the strongest typhoon to hit the country since 2006, was hovering off the northwestern coast of the main Luzon island, the weather bureau said.

It had weakened, with maximum sustained winds of 120 kph (75 mph) and gusts of up to 150 kph, but would spread rain over the mountains of northern Luzon while it was in the area, the bureau said.

It's very likely if this will continue the next several days, flooding and landslides will be inevitable, said chief weather forecaster Nathaniel Cruz, adding that the entry of another typhoon, Melor, in seas east of the Philippines was a factor.

It is interacting with the much stronger and faster Melor which is expected to enter the country's area of responsibility on Monday, he told Reuters. Melor is however not likely to hit the Philippines, he said.

Heavy rain in and around Manila, which is about 350 km (200 miles) southeast of the center of Parma, could worsen the situation in the capital area which was badly hit by floods a week ago after a previous storm, Ketsana. Nearly 300 people were killed and about half a million were forced out of their homes.

Parma's outer layers hammered the southern tip of Taiwan on Sunday and authorities have issued a land and sea warning.

More than 1,500 people, fearful of mudslides triggered by Parma, have left villages in Taiwan as the government -- bruised by perceptions of slow responses to an August 7-9 typhoon that killed about 770 people -- ordered pre-storm evacuations.

Parma hit the northeast Philippine province of Cagayan on Saturday, which bore the brunt of damage.

The destruction in our infrastructure and agriculture is huge, said Alvaro Antonio, the governor of Cagayan. Wide areas are still under water, including ricelands about to be harvested.

LANDSLIDES

Rains in Benguet province, also in northern Luzon, set off landslides in which at least 12 people were killed, police said. The victims included seven small-scale miners who were sleeping in a shelter when they were buried by one landslide, said provincial police chief Loreto Espeneli.

Five people were killed elsewhere.

Local government officials reported more than 100 million pesos ($2.1 million) in crop damage from Parma, particularly in rice and corn farms in Isabela and Cagayan.

Officials said some 6.5 billion pesos in crops, mostly rice about to be harvested, were damaged by Ketsana last week. The damage to bridges and roads was estimated at 1.6 billion pesos.

The government is working on a supplemental budget of 10 billion pesos for relief work, which is likely to push up the annual budget deficit to a record 260 billion pesos.
Finance officials have said the government may issue dollar and yen denominated bonds later in the year to fund the deficit.

President Gloria Macapagal Arroyo has ordered the speedy import of food items to prevent shortages, her spokesman said.

Agriculture Secretary Arthur Yap said the country may import more rice to fill its needs for the first half of 2010 following hefty damage to crops.

While there were enough stocks of the national staple until year-end, output for the first two quarters of 2010 may be affected by the heavy rain and flooding brought by the two typhoons, said Yap.

Arroyo declared a nationwide calamity on Friday to allow local governments to access emergency funds and cap the prices of essential goods.

She also ordered a one-year deferment in repayment of loans provided by state pension funds, part of liquidity-boosting measures to protect the economy following the massive typhoon devastation.

(Additional reporting by Manolo Serapio Jr. and Ralph Jennings in Taipei)

(Writing by Raju Gopalakrishnan; Editing by Louise Ireland)

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