MANILA - A brutal run of natural disasters late last year took their toll on the Philippine economy, slicing growth to 5.7 per cent in the first quarter of the year from 7.7 per cent a year earlier and dislodging the Philippines as Asia's fastest-growing economy.
The country's gross domestic product (GDP) growth is now behind China's 7.4 per cent and Malaysia's 6.2 per cent.
"The relatively slow growth is expected, given the magnitude of the destruction in production capacity," Economic Planning Secretary Arsenio Balisacan said in a news briefing on Thursday.
The Philippines was hit in November last year by Haiyan, the strongest typhoon in recorded history. It killed more than 6,500 as it tore through the country's mostly agricultural central regions.
The previous month, a 7.1-magnitude earthquake killed more than 200 on the tourist islands of Bohol and Cebu.
Haiyan caused an estimated US$700 million (S$879 million) in damage to agriculture and infrastructure.
Four in 10 farmers and fishermen in central Philippines lost their primary source of income, and there have been concerns that harvests in July will be greatly diminished.
That will affect a largely agricultural region that produces key crops like rice, coconut and sugarcane, and accounts for 12.7 per cent of the Philippines' gross domestic product (GDP).
Mr Balisacan said the damage from Haiyan extended beyond agricultural produce like coconuts, as it also disrupted supply chains, resulting in lower food manufacturing output.
"What most people don't appreciate is that the damage in Haiyan-affected areas is not confined to those areas. Through the supply chain, markets are connected. If there's a supply shock in Haiyan-affected areas, it affects other areas in the country," he said.
Despite the marked slowdown, the country's economic managers expressed confidence that the economy would grow within their target of 6.5 per cent to 7. 5 per cent for the rest of the year.
"We don't see any major departure from our assumptions about the fundamentals of the economy, at least at the moment," said Mr Balisacan. "The growth momentum will likely strengthen within the near term, notwithstanding the risk and challenges that the economy is facing."
He said 30 billion pesos (S$858 million) worth of funds meant to rehabilitate areas affected by Haiyan have already been released.
"The resources are already there, and all we need are for agencies, especially local government units, to get their acts together," he said.