Economic prospects-A A +A
Tuesday, April 8, 2014
THERE was the recent effort to enliven the national economy by reviving the retail trade industry. The retail outlets, in a way, are the small countryside network of small stores through which basic consumer items are distributed. This was one aspect of ensuring that production and marketing of consumer goods among the masses are effectively boosted.
The World Bank (WB), in assessing the Philippines’ prospect over the next couple of years, foresee the country as “sustaining its strong economic performance next year through (a) fast reconstruction program and high infrastructure spending despite the devastation brought (about) by typhoon Yolanda. The WB’s Philippine Economic Update (PEU) released the other day pointed out “that one of the effects of Yolanda is lower consumption growth...”
In turn, this situation “may (also) affect the country’s gross domestic product (GDP) expansion.” It appears that the “intensive reconstruction spending and fast implementation of these (planned) projects” would boost the GDP growth expected over the next two years 2014 and 2015.
The WB projection of the Philippines GDP growth before Yolanda “was at 6.7 percent this year and at 6.8 per cent next year. The World Bank has now revised its GDP growth projection to 6.6 percent for 2014 and 6.9 for 2015.” This three percent rise indicates a rather phenomenal growth.
The point at issue here is the reported $8 billion worth of reconstruction program that has been launched by the administration which is expected to reduce the effect of the huge damage wrought by typhoon Yolanda, and thus enable the Philippines to “rebuild better homes, schools, health facilities, utilities, infrastructure, and livelihoods.”
The WB’s economic updating report assumes that the program for recovery and reconstruction would result in increased spending.
And as such, it is said that the WB’s strategy of “build back better” would result in “spending 30 percent higher than the estimated (actual) cost of damage...The estimated cost of damage to public and private physical assets was at P424 billion or 3.7 percent of the total GDP. However, initial recovery and reconstruction cost was only P361 billion or 3.1 percent of the GDP.” This means the recovery and reconstruction cost was only 85 percent of the estimated damages cost.
At any rate, the WB looks at the Philippines as one of the nations that nourishes a prospect of a stable global economy over the next two years.
Other potential investors have foreseen the same economic prospects of the Philippines as they are also looking forward to expand here.
In any case, Cebu’s economic circumstance is further boosted by the optimism shown by a Japanese carmaker. Nissan Philippines Inc. (NPI) “introduced in Cebu...its new sales company as the exclusive distributor of (its) brand in the country,” thus adding further affirmation of the WB’s faith in Cebu’s positive economic prospect in our part of Asia.
Published in the Sun.Star Cebu newspaper on April 09, 2014.