By Judith Ugwumadu | 17 March 2014
Economic growth in the Philippines is expected to hit 6.9% next year as the country recovers from Typhoon Haiyan, the World Bank said today.
The bank’s expectations exceed its pre-Haiyan forecasts, which put growth at 6.8% in 2015. However, it warned that this growth rate would depend on the speed and scope of the country’s $8bn post-typhoon reconstruction programme designed to enable the Philippines to rebuild better homes, schools, health facilities, utilities and infrastructure.
Its Philippine Economic Update said inclusive growth could be enhanced through sustainable reconstruction and job creation. ‘Addressing the jobs challenge while ensuring a timely and sustainable reconstruction in affected areas will help disaster survivors get back on their feet as well as mitigate future risks from calamities,’ the bank said.
As well as job creation, the report suggests the Philippines could improve its resilience to natural disasters and integrate existing disaster risk management programmes into a single framework.
‘Over the coming years, a comprehensive agenda to support the revival of agriculture and manufacturing will further strengthen the country’s resilience to calamities,’ said World Bank country director Motoo Konishi.
‘Reforms to secure property rights, enhance competition, simplify regulations, and increase investments in health, education, and infrastructure will make this happen.
‘If people, particularly the poor, have good jobs, they are able to raise incomes, save more, and invest for the rainy days.’
Ousmane Dione, World Bank sector manager for sustainable development, added that resilience work to cope with natural disasters in the country was increasing.
‘Work is intensifying to put in place an integrated strategy for increasing resilience to climate change impacts and natural disasters at the household, and local and national government level, but also internationally, by participating in international partnerships to support increased resilience.’
The report also identified some downside risks to growth in the Philippines, in particular a slower global recovery and the end of quantitative easing in the US. A slower Chinese economy could also stall recovery in the Philippine exports sector, given that China accounts for 12% of Philippine exports.
But Karl Kendrick Chua, World Bank senior economist for the Philippines and lead author of the report, said the overall economic impact of Typhoon Haiyan on the country is expected to be manageable, given its strong current account surplus and high international reserves, flexible exchange rate system, and sustainable deficits and debt levels.
He added: ‘The country continues to benefit from strong macroeconomic fundamentals, characterised by low and stable inflation, healthy external balances, and improving government finances. These strong fundamentals will continue to shield the economy from the impact of the global economic slowdown and financial market volatilities.’
