MANILA, Philippines (3rd UPDATE) - The Philippine economy grew by 6.5% in the fourth quarter, bringing full-year growth to 7.2% in 2013, the government announced on Thursday.
Socioeconomic Planning Secretary Arsenio Balisacan said the fourth quarter and 2013 real GDP growth has surpassed expectations of both the public and private sectors. The government's growth target was 6% to 7% in 2013.
The full-year growth was also above the private sector's forecast of 7% and is the strongest since 2010.
"This is a remarkable turnout. The economy grew better than our target of 6-7% for 2013, despite the challenges we faced last year. Particularly the disasters that struck central and southern Philippines in the fourth quarter. Indeed, growth could have been better had we not been perturbed by various disasters that hit the country such as the Bohol earthquake, Zamboanga siege and the super typhoon Yolanda," Balisacan said.
The country's GDP, which averaged 7.4% in the first nine months of the year, was pulled down in the fourth quarter as super typhoon "Yolanda" hit the central Visayas in November.
"In 2013, the combined impact of typhoons and other natural disasters that hit the country may have reduced the full-year real GDP growth by at least 0.1 percentage point," he added.
Despite the impact of the disasters, the NEDA chief noted the Philippines remained one of the fastest growing economies in Asia in 2013, second only to China which grew by 7.7%.
On the supply side, Balisacan said the services and industry sectors continued to drive economic growth. "The 6.5 percent expansion of the services sector was driven largely by the strong demand for communications, land and air transportation, and storage and services incidental to transport. Increased air traffic in Q4 2013 was due to the additional flights and destination of the country's leading airlines, and number of passengers and cargo for tourism and for relief operations after super typhoon Yolanda," he said.
Growth in the industry sector was driven by manufacturing, which grew 12.3% in the fourth quarter of 2013. "This is more than twice the growth it exhibited in the same period of 2012, at 5.5 percent. The top performer was chemical and chemical products," Balisacan said.
However, Balisacan said the effects of "Yolanda" will still be felt in the first quarter of 2014, as many businesses in the typhoon-hit areas are still recovering.
"But we are optimistic that the Philippine economy will remain strong in 2014, especially that the outlook on the global economy is becoming more favorable and as the domestic economy remains robust," he said.
The Philippine economy, particularly the industry sector, is in a good position to take advantage of wider export markets, Balisacan said. He expects the agriculture, industry and construction sectors to fuel economic growth this year.
"Notwithstanding this vibrant outlook, we remain keen on the domestic and external challenges that the economy is facing... Importantly, we know, too, that the country is very prone to natural disasters, particularly typhoons, earthquakes, and volcanic eruptions that significantly damage and disrupt economic activity... This is why the government has strengthened its strategies to improve disaster resilience," he said.
Meanwhile, Finance Secretary Cesar Purisima described last year's economic performance as "astounding", pointing out that the final quarter was the eighth consecutive three-month period of growth exceeding 6.0 percent.
"This growth demonstrates the resilience of the country," he said.
"The Philippines continues to be the second-fastest growing economy in Asia, after China, with its strengthening BPO and tourism sectors."
Krystal Tan, a regional economist with research group Capital Economics, also described the Philippine economy as having proved "remarkably resilient" to Haiyan.
She said the vast amount of money being spent on the reconstruction effort would help spur the economy in 2014, and forecast full-year growth of 6.5 percent. - With Agence France-Presse