The reconstruction activities in the wake of super typhoon Yolanda will lift economic growth in the Philippines by 6.7 percent in 2014, possibly trailing the expansion of world economic powerhouse China, the latest macro-economic forecast of the United Nations for the region, said.
The UN Economic and Social Commission for Asia and the Pacific said in a poll report the Philippines could make it as the second fastest-growing economy in the Asia-Pacific region, next to China.
“[The] further acceleration [is] due to reconstruction activities in the aftermath of typhoon Haiyan (international name for typhoon Yolanda),” the report said.
Like other research studies on the Philippines’ growth outlook for 2014, Escap said remittances from migrant Filipino workers would provide a stable support for the economy “given the better outlook for receiving countries as well as the general lack of short-term volatility in remittance flows.”
The Philippine economy grew 7.5 percent in the first half of 2013, one of the fastest in Asia. Growth slowed to 7 percent in the third quarter, bringing the expansion in the first nine months at 7.4 percent, still higher than 6.7 percent year-on-year.
The government earlier projected the economy to grow between 6 percent and 7 percent in 2013. It expects the economy to expand between 6.5 percent and 7.5 percent in 2014 despite the spillover effects of super typhoon Yolanda.
“The role of remittances in supporting buoyant domestic consumption in the country has been important,” Escap said.
Cash remittances coursed through banks hit a record high of $2.1 billion in October, a 7-percent increase from $1.928 billion a year ago, on the back of sustained demand for migrant Filipino workers abroad.
Cash remittances from January to October last year totaled $18.542 billion, up 6 percent from $17.499 billion on year.
The Bangko Sentral said remittances from migrant workers would remain robust and sustain the surplus in the country’s balance of payments.
Escap also cited the robust investments in the country, benign inflation and a relatively low budget deficit that allowed substantial government spending in infrastructure and other basic services.
“The prospects are positive in 2014, despite the losses resulting from Typhoon Haiyan in 2013. Concerns remain, however, regarding the high unemployment rate and relatively low investment level compared to other similar South-East Asian economies,” Escap said.