The destruction from Super Typhoon Yolanda will pull down the country’s gross domestic product (GDP) to the “low-end target” of 6.5 percent in 2014, economic experts predicted on Friday.
The 6.5-percent forecast will break the GDP’s above 7 percent run for the first three quarters of this year.
In his presentation at the Asian Institute Management, Roberto de Ocampo, chairman of RFO Center for Public Finance and Regional Cooperation, said the 6.5 percent or lower GDP will not be because of the typhoon damage alone, but also to its aftereffects that will increase the jobless in Visayas.
In the report, “Philippine Economy 2014: Fearless Forecast,” de Ocampo also said unemployment will hover between 7 percent and 7.3 percent; inflation from 3 percent to 5 percent, the foreign exchange above P43 to the US dollar and overseas Filipino workers’ remittances will surpass $22 billion.
He said several multilateral agencies also predicted a below 6-percent GDP, disputing the government’s claim that it could rise as high as 7 percent despite Yolanda.
The International Monetary Fund (IMF) projected the 2014 GDP at 6 percent, the Asian Development Bank (ADB) came up with 6.1 percent and the World Bank put it at 6.7 percent by yearend.
University of Santo Tomas economist and Philippine Economic Society President Alvin Ang agreed with de Ocampo’s view that the growth projection will be lower because of the super typhoon’s aftereffects.
“The jobless rates in the coming year could go from the low of 7 percent . . . This is still one of the things that has not quite moved,” de Ocampo said. Ang said the number of unemployed could even be higher.
The Labor Force Survey of the National Statistics Office (NSO) noted that the number of jobless individuals rose by 7.3 percent in the third quarter.
De Ocampo said the “lack of adequate skills” in the pool of the country’s workforce is also a problem.
“Unemployment and poverty can be solved not solely by job creation but also by managing the quality and quantity of the workforce,” he said.
De Ocampo said the effects of the previous disasters such as the 7.8-magnitude earthquake in Bohol and Ceby and Typhoons Pablo and Santi will also reflect in the GDP next year.
He said “public spending on infrastructure is necessary for growth, [but]may experience some delays.”
Instead of depreciating next year, the peso could stay “flat” because of increased investments and OFW remittances for Yolanda victims, de Ocampo said.
OFW remittances are expected to be above $22 billion, he said.
Destroyed crops in the Visayas, where 35 percent of the country’s agricultural products comes from, could push up inflation as commodity prices rice, de Ocampo said.
For Ang, “the upgrades we have experienced in the past year is mainly because of the confidence in the government and because of this there is some concern in the sustainability of growth.”
“We also have to look at the possibility that the government will put in a lot of its resources in rebuilding,” he added.
Yolanda will force its victims to flock to urban centers such as Manila, Cebu and Davao, making development targest “difficult to achieve even by the end of the term of the president,” Ang said.
Alan Ortiz, president and chief operating officer of SMC Global Power Holdings, said the government should fix the justice system because it is “the key to sustaining economic growth.”
“The way for sustainability [of growth]there is only one solution and it is to fix the justice system . . . a fully functioning justice system will answer all the problems,” Ortiz said.