Philippines: Quick recovery expected for the Philippines after historical storm slams country
November 13, 2013
Typhoon Haiyan, one of the strongest storms in history, slammed the Philippines on 8 November. Although the final death toll has not yet been released, it is estimated there will be at least 3,000 casualties. The country suffered substantial damage, especially in the city of Tacloban in the Leyte province, which is an important agricultural center and represents about 2.0% of national output. Significant losses in this year's rice and sugarcane harvest are expected and inflation is likely to accelerate due to supply shocks resulting from lost harvests and infrastructure damage.
Immediate humanitarian relief efforts have been challenging even though the government has USD 530 million at its disposal, according to President Benigno Aquino. Infrastructure and reconstruction spending should begin early next year. Large amounts of foreign aid and overseas remittances will provide much needed economic support.
Despite the magnitude of the devastation, analysts have emphasized the country's strong macroeconomic fundamentals and maintain a positive outlook. Some analysts believe that achieving 7.0% growth this year is still possible. Determining the magnitude of the damage to infrastructure and lost productive activity will take time, however, and the true impact will likely only be visible starting with Q1 2014 data.
Author: Carl Kelly, Economist