World Bank cuts growth forecast for PH

The World Bank has trimmed its growth forecast for the Philippine economy for this year and 2014 as the country reels from the devastation brought by Supertyphoon “Yolanda” last month.

The multilateral lender likewise warned that the government’s finances might be constantly strained amid the likelihood of frequent storms of the same intensity hitting the country every year.

“The costs of Yolanda’s reconstruction program include the substantial mark-up for both the private and the public sector to rebuild at the higher standards needed to deal with the more extreme weather events caused by climate change,” World Bank lead economist for the Philippines Rogier van den Brink said.

“Going forward, finding a fiscally sustainable solution to deal with these ever more frequent events and maintaining the current excellent economic performance will be key,” he said.

The Washington-based multilateral lender noted that timely implementation of the country’s recovery and reconstruction program would reduce the economic and social impact of Yolanda and help the Philippines maintain a high growth rate that would benefit the poor.

Before Yolanda, the World Bank projected that the Philippine economy would grow by 7 percent this year and 6.7 percent in 2014. Now, the World Bank sees the economy growing by 6.9 percent in 2013 and 6.5 percent in 2014.

For 2015, the World Bank revised its projection to 7.1 percent from its pre-Yolanda forecast of 6.8 percent.

The faster growth, the World Bank said, would be driven mainly by the construction of better kinds of roads, bridges and other infrastructure to replace the ones destroyed in the Visayas.

Meanwhile, the World Bank affirmed its plan to support the Philippine government in its reconstruction efforts in areas affected by Yolanda.

On Saturday, the World Bank Group’s board of executive directors approved the $500-million quick-disbursing budget support loan that the Philippine government can use in dealing with the short-term recovery and reconstruction efforts.

“Timely implementation will enable the typhoon-affected communities to rebuild their homes, their livelihoods and infrastructure faster and better, thereby mitigating the disaster’s social impact while maintaining the country’s growth momentum,” World Bank Philippines Country President Motoo Konishi said.