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Philippine economy expands 7 per cent in 3Q but expected to slow as typhoon damage takes toll

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(Globalpost/GlobalPost)

MANILA, Philippines - The Philippine economy expanded 7 per cent in the third quarter, but growth is expected to slow because of devastation from the super typhoon that hit eastern and central regions earlier this month.

Statistics agency chief Jose Ramon Albert said Thursday that growth in the latest quarter was driven by services and industry.

He said agriculture made the smallest contribution to third quarter GDP due to the effects of 10 storms in the July-September period.

Growth for the first nine months of the year was 7.4 per cent, making the Philippines one of the world's fastest growing economies.

The government earlier lowered this year's growth forecast to a range of 6.5 to 7 per cent from 7.3 per cent to reflect damage to agriculture and industry from Typhoon Haiyan, which killed more than 5,500 people.

Finance Secretary Cesar Purisima said it was the fifth straight quarter of 7 per cent or higher growth since President Benigno Aquino took office in 2010 with promises to reduce poverty and root out endemic corruption in government.

"This solid growth demonstrates the continuing resilience of the economy in the face of global economic challenges and natural calamities," he said in a statement.

Purisima said growth has been supported by investment, which rose by 15.6 per cent.

"This, plus a structural current account surplus, well-managed fiscal position and strong governance agenda gives us optimism for the future," he said.

He said a key priority for government is mitigating the effects of climate change by modifying infrastructure location and design as well as drawing up a framework to better deal with the financial costs of its impact. Agriculture also needs to be less disaster-prone through sustainable insurance products, he said without elaborating.

Quoting the World Bank, Purisima said 0.8 per cent of gross domestic product is lost to natural calamities in the Philippines. In October, a magnitude 7.2 earthquake caused widespread damaged and killed more than 200 people in central Bohol province and nearby islands, which include popular tourist spots.

Purisima appealed to the global community to craft a risk-sharing mechanism that extends beyond aid and grants.

Budget Secretary Florencio Abad said the government estimates it needs 38.8 billion pesos ($881 million) to continue to provide typhoon relief supplies, restore livelihoods and employment, provide temporary shelter, rehabilitate hospitals and schools and restore electricity and water supply to affected provinces.

He said a more realistic estimate of reconstruction costs, especially housing for hundreds of thousands of families displaced by the typhoon, can only be made once more data come in.

http://www.globalpost.com/dispatch/news/the-canadian-press/131128/philippine-economy-expands-7-cent-3q-expected-slow-typhoon-d