Despite typhoon Yolanda and a stringof natural disasters throughout 2013, Philippine economicgrowth accelerated to 7.2 percent in 2013. Higher growth wasunderpinned by the robust performance of consumption andservices, and supported by the expansion of investments andmanufacturing. Like other emerging markets, Philippinefinancial markets experienced large volatilities asinvestors responded to the tapering of the United States(U.S.) stimulus program. Monetary and fiscal policy remainedsupportive of growth. Amid the challenging globalenvironment and the impact of typhoon Yolanda, thePhilippines are likely to sustain high growth in themedium-term. Risks to growth include a slower globalrecovery, financial market volatilities following thetapering of the U.S. stimulus program, potential bubbles inthe real estate sector, slower post-typhoon reconstruction,and domestic reform lags. The government responded quicklyto the typhoon by rolling out immediate humanitarian aid andpreparing the reconstruction assistance on Yolanda (RAY), astrategic plan to guide recovery and reconstruction in theaffected areas. The Philippines will also need to preparemore broadly for the increased risk of disasters broughtabout by climate change. The Philippine economic updateprovides an update on key economic and social developments,and policies over the past six months. It also presentsfindings from recent World Bank studies on the Philippines.
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