(Bloomberg) -- The Philippines is bracing for a hit by the fourth typhoon in over a month, after government data showed third-quarter growth was sapped by storms that shut offices and ravaged crops.
Yinxing, known in the Southeast Asian nation as Marce, is expected to make landfall in rice-producing Cagayan province on Thursday afternoon, according to the latest advisory from Manila’s weather forecasting agency.
The storm, the 13th to enter the Philippines this year, threatens lives, homes and crops in the north, and at least 17,700 people in Cagayan have been evacuated, the Manila Bulletin reported, citing disaster management officials. Data today showed the economy expanded just 5.2% in the storm-hit July-September period from a year earlier, missing the 5.7% median estimate of economists in a Bloomberg survey and down from 6.4% in the second quarter.
The latest typhoon has maximum sustained winds of 175 kilometers (109 miles) per hour and could bring torrential rain of up to 200 millimeters (8 inches) in Cagayan and nearby provinces, the weather agency said. A storm in late October killed at least 116 people.
Read: Philippine Death Toll From Trami Rises as Storm May Return
Typhoon Yinxing is also bad news for farm output, which dropped 2.8% in the third quarter. That was the steepest decline since early 2016 as typhoons, including Yagi and Gaemi, compounded seasonal rainy weather. Rough rice production fell 12.3% to 3.3 million tons in July-September, according to government data on Wednesday.
The currency and stock markets weakened after the data. The main stock index closed down 2.1% to the lowest level since Sept. 11, while the peso slipped 0.1% to 58.73 against the dollar.
Overall gross domestic product for the first nine months of the year expanded 5.8%, below the goal of President Ferdinand Marcos Jr.’s administration to grow the economy by at least 6% in 2024. Quarter-on-quarter, the economy posted a slightly faster-than-expected 1.7% expansion.
Economic Planning Secretary Arsenio Balisacan said the economy needs to grow by at least 6.5% in the current quarter to meet the government’s goal. “We remain optimistic that this growth target is attainable,” he said.
Balisacan said he expects the central bank to continue reducing interest rates to spur investment such as in construction.
The Bangko Sentral ng Pilipinas has delivered two quarter-point cuts since August to bring its key interest rate to 6%. Governor Eli Remolona has signaled that GDP data will guide the policy easing path, with another 25-basis-point reduction possible next month that could help bolster the economy.
Apart from the weaker agriculture sector, which accounts for nearly a tenth of Philippine GDP, growth in industry and the services sectors slowed to 5% and 6.3%, respectively.
Consumption, which makes up more than 70% of the nation’s output, rose 5.1% while growth in government spending slowed to 5% from 11.9% in the second quarter. Exports declined 1% in the third quarter, after expanding 4.2% in the previous three months.
“While the worst is probably over for private consumption in the Philippines, we doubt this pace of consumption growth is sustainable,” Capital Economics’ Shivaan Tandon said in a note. Tandon said downside risks to domestic demand have risen and, with the dollar strengthening, the central bank may opt “for fewer rate cuts.”
--With assistance from Cecilia Yap and Manolo Serapio Jr..
(Rewrites headline, first four paragraphs with fresh storm.)
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