In a report looking into the Pacific country’s economy, the bank projected its GDP will shrink by 8.1% this year – more than the 6.9% it forecast in October.
Three typhoons hit the Philippines in the space of two weeks in November, with strong winds and flooding particularly damaging Luzon, the island on which the capital city Manila sits.
Prior to this, the economy had already recorded a 10% contraction in the first three quarters of 2020 – the worst recession since a debt crisis of the 1980s – because of a drop in domestic demand and exports caused by Covid-19.
The report warned the typhoons, combined with the effects of the virus, threaten to reverse the trend of steady poverty decline in recent years.
A survey in August showed around 40% of households reported a fall in income this year, particularly from small non-agricultural businesses, and remittances from abroad fell for 40% of households that received them.
As a result, poverty was estimated to have increased from 20.5% in 2019 to 22.6%.
“The series of natural disasters that hit the country while we are battling the pandemic highlights the importance of mainstreaming disaster risk reduction and climate change adaptation into policy and planning,” said Ndiame Diop, the World Bank’s country director for several east Asian countries, including the Philippines.
“While the Philippines is financially resilient, stronger coordination, execution and implementation will help further improve social and physical resilience to frequent shocks.”
Economic recovery depends on the global economy, and particularly on China, which will allow exports and remittances to grow, the report said.
