First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific said that the country’s economy growth as measured in gross domestic product (GDP), may expand “7.3 percent in the third quarter” but can go below 6 percent in the fourth quarter, because of the devastation brought by Super Typhoon Yolanda.
FMIC Chairman Roberto Juanchito Dispo said in the monthly The Market Call that the super typhoon may severely impact economic growth figures for the fourth quarter and the first quarter of 2014, but said that overall economic outlook should remain positive.
“Despite the devastating impact of Super Typhoon Yolanda, our basic positive view on the economy remains, with some shimmer a little off. GDP probably expanded by 7.3 percent in third quarter, but could slow down to below 6 percent in fourth quarter, with the immediate effect of the typhoon on income and output,” Dispo said in the report.
Slower inflation in the third quarter, according to the report, was caused by the rise of crude oil prices, which “would certainly rise in the fourth quarter, exacerbated by the super typhoon’s effects in the Visayas.”
Part of the positive outlook also comes from the second semester’s double-digit growth of tax collections, increase in exports and better overseas Filipino workers’ remittances from the depreciation of peso, which would continue until yearend.
“The fiscal picture continues to look better. Tax collections’ rising pace have been at double-digit rates and this would keep deficit and debt build-up in check and bring down the debt ratio clearly below 50 percent by the end of the year,” Dispo said.
“Exports appear to be doing better in second half as we had anticipated. However, this mini-surge would just be enough to bring exports growth to positive territory for the year. OFW remittances will be a positive factor for the economy in second half due to the depreciation of the peso, and should continue to do so unto fourth quarter,” he added.
Dispo also said that reconstruction efforts in Yolanda-hit areas in the near future can help spur economic activity.
“To be sure, reconstruction effort could offset the loss on output and income due to the negative effects of the super typhoon, but the affected areas reportedly represent some 12 percent of the country’s population, and the latter would probably tilt the balance,” he added.