After five straight quarters of growing by more than 7 percent, the Philippine domestic economy is likely to slow down in the next few quarters through 2014 in the aftermath of Supertyphoon “Yolanda,” several economists said.
Bank of the Philippine Islands economist Jun Neri said that factoring the effects of the typhoon, the country’s gross domestic product (GDP) growth might ease to 5.5 percent in the fourth quarter.
“This would still translate to nearly 7 percent growth in full-year 2013, still an impressive follow-through to 2012’s 6.8-percent rise. We expect the slowdown to be sustained through the first quarter 2014, before regaining momentum again by the second quarter 2014 as bulk of the reconstruction efforts start to kick in by then,” Neri said.
While growth could return to the 7-percent levels by the second half of next year, Neri said full-year 2014 growth could slow down to 6.1 percent from 6.3 percent.
In a separate research note, New York-based think tank Global Source said that in light of decreased economic momentum, the country’s 2013 growth might average 6.8 percent, lower than its earlier forecast of 7.2 percent. The think tank also reduced its 2014 growth outlook for the Philippines to 5.8 percent from 6.2 percent.
Despite being the country most devastated by natural disasters year after year, optimism is still high about the Philippines’ future, said HSBC economist Trinh Nguyen. However, she said the country’s GDP would likely slow to 5.1 percent this fourth quarter and to 5.8 percent for 2014.
Nguyen said the recent typhoon had exposed the Philippines’ most fundamental strength and weakness: The resilience of its people, reflective in the likely rise of remittance inflows to support relatives as well as the ability of the affected individuals to pick up and move on; and the limited funds available for spending on infrastructure, disaster preparedness and relief efforts.
She noted that only P29.9 billion was available for the entire fiscal year of 2013 for flood control, calamity, quick response and emergency housing. “The government estimates that the direct damage amounts to P24.5 billion, mostly agriculture losses, but about three million people are likely to have lost their jobs, so the indirect economic losses, if unaddressed, are likely to be more severe. A lot of infrastructure in the stricken Eastern Visayas region (farm-to-market roads, fishing boat landing sites, irrigation) was damaged or destroyed,” she said.