MANILA -Expectations of continued strong growth of Philippine gross domestic product are holding up despite the risks of reduced output and hampered business operations from the double threat of dry conditions and more typhoons amid the El Niño dry spell.
In their quarterly update, the Asean (Association of Southeast Asian Nations) + 3 Macroeconomic Research Office (Amro) maintained its growth forecast for the Philippines at 6.2 percent in 2023 and 6.5 percent in 2024. The numbers are unchanged from the forecast made last April.
Amro maintained the forecast for the Philippines while revising downward the projection for the entire Asean region’s growth this year. From 4.9 percent in April, the forecast is now 5.4 percent.
The Asean includes the Philippines, Indonesia, Malaysia, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam. Meanwhile, “+3” refers to China, South Korea and Japan.
“Asean+3’s recovery is now riding on resilient demand within the region,” Amro chief economist Hoe Ee Khor said in a press briefing.
“Recovering labor markets and falling inflation, along with steadily growing intraregional tourism, are helping to cushion growth against sluggish external demand that is dampening the region’s exports,” Khor said.
In a separate report, Fitch group subsidiary BMI said that based on five occurrences of “severe” El Niño since the 1990s, rice production in the Philippines was one of the worst-hit in Asia whenever the climate phenomenon hits overdrive.
Severe El Niños were recorded in 1991 to 1992, 2002 to 2003, 2003 to 2004, 2009 to 2010 and 2015 to 2016.
The most recent severe El Niño was considered as one of the worst in recorded history and, during that time, BMI noted that rice production in the Philippines was 10 percent below the average annual output.
Meanwhile, Moody’s subsidiary Risk Management Solutions (RMS) said more typhoons in the Western Pacific basin —the area that includes the Philippines—will see more typhoons this year due to El Niño.
Moody’s RMS said that during El Niño years, weaker trade winds and increased atmospheric instability typically lead to increased overall activity or more typhoons forming in the Western Pacific.
“Sea surface temperatures across the Western North Pacific Basin are expected to be near or above average between July and November,” RMS said. “The waters immediately surrounding the Philippines and the South China Sea are expected to be between 0 degrees Celsius and +0.5 degrees Celsius above average.”
RMS forecasts that in the Western Pacific basin, there will be 17 to 24 tropical storms plus 10 to 14 typhoons in 2023.
In 2022, there were more tropical storms that formed (25) but less typhoons (only 10). INQ
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