The Philippine economy, which recently became one of the fastest growing in Asia, is expected to hit the government’s official growth target and expand by 6.5-7 percent this year.
According to the National Economic and Development Authority (Neda), the estimate took into account the adverse impact of Supertyphoon “Yolanda,” which not only led to loss of lives but also to multibillion pesos in damage to the agriculture sector, public infrastructure and private properties.
The projected growth rate for this year is well within the official target of 6 to 7 percent and higher than last year’s 6.8 percent.
However, it is lower than projections released prior to the latest calamity, which struck mostly the Visayas regions in November.
For 2014, the Neda said the economy was still poised to hit the government’s official target of between 6.5 and 7.5 percent despite the spillover effects of the latest typhoon.
In a press briefing Tuesday, Economic Planning Secretary and Neda Director General Arsenio Balisacan said that were it not for Yolanda, the Philippine economy could have grown faster, or anywhere between 7.3 and 7.5 percent, this year.
In the first three quarters, the economy grew by 7.4 percent to register one of the fastest growth rates in Asia for the period.
Growth drivers cited were higher government spending, sustained rise in household consumption and the recent phenomenon of significant growth of the manufacturing sector.
The country’s performance in the first three quarters was a welcome development in light of a consensus among economists that the Philippines needed to sustain a growth rate of at least 7 percent over the medium to long term for poverty incidence to drop by a significant margin.
Growth of the Philippine economy is commonly described as non-inclusive in that it is driven largely by rising incomes of the rich and the middle class and that the poverty is hardly declining. Poverty incidence stood at 25.2 percent last year from 26.3 percent three years in 2010.
Balisacan said the damage caused by Yolanda made it probable for the Philippine economy to grow slightly less than 7 percent.
Should this be the case, the trend of an economic growth of at least 7 percent, which had been registered over the past five quarters, would be disrupted.
Nonetheless, Balisacan said the Philippines would still be one of the fastest growing in Asia.
Meantime, he said the government was set to release the updated Philippine Development Plan (PDP) in January. The plan would state poverty-reduction strategies to be implemented from 2014 to 2016, the end of the Aquino administration’s term.
The strategies are expected to include investments in the agriculture and manufacturing sectors, the development of which is believed to be crucial in substantially reducing poverty.
The bulk of the country’s poor belonged to the agriculture sector, which employ a third of the country’s labor force.
The sector, however, contributes only about 12 percent to the Philippine economy’s output.