WB adjusts Phl growth forecast

MANILA, Philippines - The World Bank (WB) has revised its economic growth targets for the Philippines this year from 6.7 percent to a slightly slower 6.6 percent.

The WB’s original target figure was made prior to the onslaught of Super Typhoon Yolanda, which killed thousands and displaced a million others, last November.

However, the WB accelerated its outlook on the country’s gross domestic product (GDP) in 2015 from the original 6.8 percent to 6.9 percent.

Last year, the economy expanded by 7.2 percent from 6.6 percent in 2012.

The WB said much depends on the speed and scope of the reconstruction program in areas affected by Yolanda, including

Eastern and Western Visayas.

The key challenge of the reconstruction process is to develop and enforce explicit standards to be able to have safe and resilient buildings and infrastructure, according to the WB.

The stronger growth rate relies on the ability of government to form an action-oriented, coalition-supported program on job generation, it said.

The WB said disruption of economic activities in affected areas will pull down growth through lower consumption, but a speedy implementation of the Reconstruction Assistance on Yolanda program would partially offset the decline in consumption and keep GDP growth strong at 6.6 percent in 2014 and 6.9 percent in 2015.

WB sector manager for sustainable development Ousmane Dione supported the government’s actions to improve the Philippines’ resilience to natural disasters and integrate existing disaster risk management programs into a single coherent framework.

“Work is intensifying to put in place an integrated strategy for increasing resilience to climate change impacts and natural disasters at the household, local and national government levels, and also internationally,” Dione said.

Assuming all goes well this year, the Philippines expects to maintain strong growth rates in the next three years.

WB senior economist for the Philippines Karl Kendrick Chua said the country continues to benefit from strong macroeconomic fundamentals, characterized 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.

The country also benefits from a pro-poor government, and the reform momentum the Aquino government is accelerating.