The Philippines will continue to outshine other countries in the Asia-Pacific region when it comes to economic growth, according to Moody’s Analytics.
“The Philippines will remain one of the world’s fastest-growing economies in 2014,” Glenn Levine, senior economist at Moody’s Analytics, said in a newly released commentary titled “Asia Pacific Outlook 2014: Realizing Potential.”
Levine said that what drives the Philippine economy forward is the high investor confidence which was reflected in the robust investments in both public and private sector.
The economist also sees a rebound in domestic demand next year despite the massive devastation caused by Super Typhoon Yolanda (international name Haiyan).
“Demand should rebound quickly after Typhoon Haiyan,” Levine said.
The typhoon damaged infrastructure and crops worth an estimated P22 billion but reconstruction efforts in devastated areas were seen to
support the expansion of the domestic economy next year.
Meanwhile, the Moody’s Analytics commentary said that economies in the Asia-Pacific region will enter 2014 on a more solid growth,
“The Asia Pacific region enters 2014 growing solidly with a mild tailwind from growing global demand,” Levine said.
He added that the global and regional economies are on a “slow cyclical upturn” and downside risks are receding.
Levine is optimistic that next year will be better than 2013 because most national economies growing near or at potential rates by year’s end.
“This year was on the whole slightly disappointing, marked by problems in Europe, political distraction in the US, and a weaker first half in China. Yet there are reasons to believe 2014 will be better,” he said.
Levine said that global risks have receded, most notably in Europe and to a lesser extent in the United States.
“Europe’s economy should grow in 2014 for the first time since 2011, lifting Asia’s export-facing economies,” he added.
The Philippine government sees an economic growth of between 6.5 percent and 7.5 percent next year.
Economic planning minister Arsenio Balisacan said that while losses in agriculture caused by Yolanda in November were expected to hit growth in the near term, rebuilding would likely make up for it further down the line.
He said 2013 gross domestic product (GDP) growth should hit the “upper limit” of the government’s 6.0-percent 7.0-percent target, forecasts first made before the typhoon hit last month and a 7.1-magnitude quake struck some of the country’s main tourist regions in October.
“Without all these crises, we could have achieved 7.3-percent to 7.5-percent growth this year,” Balisacan said in a statement.
Nevertheless, he added that the Philippines should continue its hot streak of five consecutive quarters of at least 7.0-percent growth.
“For 2014, we forecast growth to be in the 6.5 [percent]to 7.5 percent range.”
President Benigno Aquino 3rd has said rebuilding dozens of towns and cities, some of which were obliterated by tsunami-like storm surges brought by Yolanda, would require nearly $3 billion of government spending.
Balisacan said Manila will shortly unveil a reconstruction plan for areas hit by the typhoon.
“The intention mainly is to restore the economic and social conditions of these areas at the very least to their pre-typhoon levels and to a higher level of disaster resilience,” he added.
Despite the period of high growth, Balisacan acknowledged that the government had yet to make a significant dent on widespread poverty and joblessness.
About 25.2 percent of the population were considered poor last year, almost unchanged from 26.3 percent in 2011, according to government data.
The unemployment rate stood at 6.5 percent in October, on top of 17.9 percent of the labor force that were considered underemployed.
“These twin problems of poverty and unemployment require more than just five quarters of impressive economic growth,” Balisacan said.
“Structural transformation is necessary, that is, to maneuver the economy from one that is household consumption-driven . . . to one that is increasingly investment-led and employment-oriented.”
With Report From AFP