MANILA - The Metrobank Group and the University of Asia and the Pacific (UA&P) have scaled down anew the projected economic growth of the Philippines in light of the devastating impact of tropical storm Ondoy and typhoon Pepeng.

Metrobank’s First Metro Investment Corp. (FMIC) as well as the UA&P now sees the country’s gross domestic product (GDP) expanding by only 2.1% instead of the revised 2.2% this year.

“We have scaled down, nonetheless, our full-year GDP growth forecast to 2.1%, as the positive spending may not be sufficient to completely offset the output losses in agriculture and productive capacity,” FMIC and UA&P said.

A study titled “Flooded Road to recovery” stated that the Philippine economy was hit by catastrophic, record rainfall and floods in end-September, which have put a dampener on the speed of the recovery.

It pointed out that the main impact on agricultural output as well as manufacturing sector would partly be offset by the spending on new appliances, furniture as well as repair of houses, buildings, and infrastructure.

As such FMIC and UA&P now see the country’s fourth quarter GDP expanding by only 3.8% instead of 4.3%.

“We think this will shave fourth quarter GDP estimates by 0.5%, and so we now expect it to rise by 3.8%, which will still enable it to beat the high end of government projections,” the study said.

This would bring the full-year GDP growth to 2.1% or lower than the original projection of 2.4%.

The revised forecast was still higher than the government’s GDP growth projection of between 0.8% and 1.8% this year from 3.8% last year.

The country’s GDP grew by 1% in the first half of the year from 4% after the country’s domestic output expanded by 1.5% in the second quarter and by 0.6% in the first quarter.

FMIC and UA&P expect consumer prices to ease to 3.2% this year from 9.3% last year despite the price spikes caused by the recent natural calamities.

Inflation rose to a five-month high of 1.6% in October from 0.7% in September due to higher food prices. This brought the average inflation in the first 10 months of the year to 3.4% from 9.4% in the same period last year.

The study added that interest rates would tend to move sideways, with a slight downward bias.

“This can be reversed if the BSP continues having an aggressive liquidity-mopping stance, despite the weak economy, needing a boost from the devastation caused the two typhoons,” the study said.