MANILA, Philippines - The Philippine economy is forecast to grow by 6.8 percent this year, according to the Institute of Institute of Chartered Accountants in England and Wales (ICAEW).
The ICAEW's forecast for the Philippines is lower than the 7.2% gross domestic product (GDP) growth in 2013, and at the low-end of the government target of 6.5-7.5% this year.
"The government spending is expected to increase as the authorities provide recovery and rebuilding assistance to those regions and people affected by last year’s typhoon... Although this will be mitigated to an extent by a higher tax take from the construction sector, the overall impact will be to increase the government deficit as a proportion of gross domestic product," ICAEW said.
Last November, super typhoon "Yolanda" (Haiyan) devastated parts of central Philippines. Rehabilitation efforts for the Visayas are still on-going.
ICAEW warned that food costs may increase in 2014, amid the agricultural damage caused by "Yolanda."
"The devastation wrought by typhoon Haiyan [Yolanda] destroyed rice and sugar crops, and damaged areas of farmland. This has resulted in a short-term drag on food production as the agriculture industry recovers from its recent turmoil," it said.
"A faster recovery in the nation’s fishing industry should help mitigate the damaging economic consequences. Overall, annual food price inflation is expected to increase to approximately 4 percent in 2014, up from 2.8 percent in 2013, before falling to 3 percent in 2015 and 2016."
ICAEW is an organization that provides insights to the global accountancy and finance profession.