MANILA, Philippines - The country’s economic managers remain optimistic that growth could hit the high-end target of seven percent this year, despite a probable slowdown in the fourth quarter due to the devastation caused by the recent natural calamities.
In a statement, Socioeconomic Planning Secretary Arsenio Balisacan said based on preliminary data on the damage and production losses due to the destructive earthquake and typhoon in the Visayas, estimates indicate that fourth quarter 2013 growth could slow down to 4.1 percent.
“But the negative impact of the typhoon may linger in 2014 due to reduced production capacity. The full year GDP (gross domestic product) growth for 2013 could be reduced by 0.3 to 0.8 percentage point, lowering growth estimates to 6.5 percent to seven percent.,†he said.
Balisacan, who is also director general of the National Economic and Development Authority (NEDA), noted that prior to the onset of calamities, the Philippine economy was expected to grow by 7.3 percent for 2013, after registering a 7.6 percent growth in the first half of the year.
For his part, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said they still expect the economy to expand within the government’s six to seven percent target amid a benign inflation environment despite Super Typhoon Yolanda’s devastation.
“Economic growth will still be doable at six to seven percent... it’s very hard to quantify the damage and yes, there will be impact on activity but the impact on GDP for 2013 will be manageable,†he said in a briefing yesterday.
Guinigundo explained that the impact of Yolanda, which ravaged the Visayas region last week, is very hard to assess at the moment as ongoing relief and rescue operations are ongoing.
“All that we know at this point is that all the affected areas accounted for 13 percent of the GDP in 2012,†he noted.
Since the economy has already expanded by 7.6 percent in the first half and is expected to have grown by another six to seven percent in the third quarter, the impact of the typhoon on full-year GDP will be minimal, he pointed out.
Eastern Visayas bore the brunt of the damage after Yolanda devastated the Visayas last week. The death toll, already at 2,360 yesterday morning, has been continuously rising, while damage to infrastructure and agriculture has also been climbing.
In terms of inflation, Guinigundo noted that the effect of the calamity will also be “manageable†since the regions affected only contribute 15.8 percent to the basket of commodities used to measure the rise in prices.
“Assuming that price movements become very significant in those areas, that will be limited to about 15.8 percent in the consumer basket,†he said.
“For 10 months, the average inflation was at 2.8 percent, that’s lower than target so I think the three to five percent [target range] will be kept. Actual inflation will be close to the lower end of the country,†he added.
Meanwhile, Balisacan said even as relief operations are ongoing, NEDA is spearheading the development of a recovery and reconstruction plan to restore normalcy in regions hit by Yolanda and help get the affected local economies back on their feet.
In a meeting yesterday, the Cabinet-level Economic Development Cluster formed an interagency task force to craft the plan, focusing on immediate and near-term actions needed to rebuild facilities, restore social services and revive economic activities. The plan, which will be presented to President Aquino in two to three weeks’ time, will be implemented immediately following relief operations in affected areas.