The country’s growth will continue to be slow because of Supertyphoon “Yolanda,” the effects of which will be felt through the first quarter of 2014, said the National Economic and Development Authority.
Neda Director General Arsenio Balisacan said that, because of the damage to the agriculture sector, estimated at over P10 billion, growth of the economy in the first three months of the coming year would not match the robust 7.7 percent registered in the same period of 2013.
“But we expect to rapidly implement the recovery and reconstruction program in the affected areas to help ease the impact,” Balisacan said in a briefing before the Christmas break.
After the supertyphoon devastated the Visayas last month, the economy is expected to falter in the fourth quarter of the year. Based on the Neda’s estimates, the country’s gross domestic product (GDP) likely grew between 4.1 and 5.9 percent in the three months to December. From January to September, growth averaged 7.4 percent.
Balisacan said the slowdown would continue to be felt until March next year, explaining that reconstruction efforts would still not be significant enough to make an impact on the country’s growth.
But he was quick to stress that the economic slowdown would be short-lived.
Balisacan is also confident that the economy will recover starting the second quarter, when the positive impact of reconstruction kicks in.
As a result, he said, the government’s economic team in a meeting earlier this month decided to keep the official 2014 growth target at a range of 6.5 and 7.5 percent.
The government’s recovery plan, called the Reconstruction Assistance on Yolanda (RAY), includes the establishment of shelter for affected families, reconstruction of public infrastructure and government offices, and assistance to concerned farmers and fishermen, among others.
The Neda placed the cost of reconstruction and rehabilitation at P360.8 billion.
The government will provide part of the amount using its internal funds, while the rest will be sourced from foreign lenders offering cheap loans.
The World Bank and Japan International Cooperation Agency each offered $500 million worth of loans to the Philippine government. The Asian Development Bank offered around $1.1 billion in loans and grants.
The government expects to gather more pledges of financial assistance after the country’s economic officials earlier this month met with representatives of lending agencies from Australia, South Korea and the United States, among others.