Philippine economic growth likely slowed in Q3 amid governance concerns, says DBS – The Manila Times

Economic Performance and Sustainable Development Goals: Q3 Analysis for the Philippines

Overview of Q3 Economic Projections

An assessment of the Philippine economy for the third quarter indicates a potential deceleration in growth, with significant implications for the nation’s progress toward its Sustainable Development Goals (SDGs).

• Gross Domestic Product (GDP) Growth: Forecasted at 5.2 percent, a slowdown from the 5.5 percent recorded in the second quarter and below the government’s target range of 5.5 to 6.5 percent.
• Inflation Rate: Headline consumer price growth for October is projected at 1.8 percent, remaining below the Bangko Sentral ng Pilipinas’ (BSP) target band of 2.0–4.0 percent for the eighth consecutive month.

Challenges to SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure)

Several factors have been identified as primary constraints to achieving sustained and inclusive economic growth during the period. These challenges directly impact the country’s ability to create decent work and build resilient infrastructure.

1. Deceleration in Public Expenditure: A projected slowdown in government spending and investment has lost momentum, hindering public works and infrastructure development essential for economic expansion under SDG 9.
2. Business Sentiment and Investment: Uncertainties related to tariffs have reportedly weighed on business sentiment, potentially discouraging private investment necessary for job creation and industrial innovation.
3. Climate and Environmental Impact: A spate of typhoons further constrained growth, highlighting the economy’s vulnerability to climate-related events and underscoring the need for greater focus on SDG 13 (Climate Action) and building climate-resilient infrastructure.

Governance and Institutional Integrity (SDG 16: Peace, Justice, and Strong Institutions)

The slowdown in state spending is linked to significant governance concerns, which threaten the foundation of institutional integrity required to achieve all SDGs.

• Impact on Public Spending: Domestic governance issues, including a scandal involving flood control projects, are cited as a key factor behind the deceleration in public investment.
• Implications for Institutional Strength: Such concerns undermine progress towards developing effective, accountable, and transparent institutions (Target 16.6). The inefficient allocation of funds for critical infrastructure compromises community resilience and public trust, affecting SDG 11 (Sustainable Cities and Communities).

Areas of Economic Resilience Supporting Social Goals

Despite the challenges, certain sectors of the economy demonstrated resilience, providing a stable foundation for social development goals.

• Household Consumption (SDG 1: No Poverty): Household spending, accounting for approximately three-fourths of GDP, remained firm. This stability is supported by real income gains from a low inflation environment, which helps protect the purchasing power of households and contributes to poverty reduction.
• Labor Market Conditions (SDG 8): Relatively stable labor market conditions have underpinned consistent household consumption, supporting the goal of full and productive employment.
• External Trade (SDG 17: Partnerships for the Goals): Export activities have held up well, driven by a resilient global technology cycle that supports demand for the Philippines’ key electronics and semiconductor shipments. This highlights the importance of global partnerships in sustaining local industry.

Inflation Outlook and Socio-Economic Stability (SDG 2: Zero Hunger & SDG 10: Reduced Inequalities)

The inflation outlook presents a mixed picture regarding socio-economic stability and food security.

• Low Inflation Environment: The continued low inflation rate helps maintain the affordability of essential goods and services, which is crucial for reducing inequality and ensuring that economic gains are more widely shared.
• Food Security Risks: While food price inflation has been benign, weather-related disruptions pose an upside risk. These events can impact food supply chains and transport services, threatening progress towards achieving zero hunger (SDG 2) in the coming months.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses several economic and governance issues in the Philippines that connect to the following Sustainable Development Goals (SDGs):

• SDG 8: Decent Work and Economic Growth: The core of the article revolves around the country’s economic performance, specifically the gross domestic product (GDP) growth rate, which is a central theme of SDG 8. It also touches upon factors influencing this growth, such as household consumption, labor market conditions, and external trade.
• SDG 9: Industry, Innovation and Infrastructure: The article mentions a slowdown in government investment and a “flood control project scandal.” These points relate directly to infrastructure development, which is a key component of SDG 9, highlighting challenges in building reliable and sustainable infrastructure.
• SDG 13: Climate Action: The text explicitly states that a “spate of typhoons would have further constrained growth” and that “weather-related disruptions” pose risks to the food supply chain. This directly links climate-related hazards and natural disasters to economic stability and food security, which is a primary concern of SDG 13.
• SDG 16: Peace, Justice and Strong Institutions: The article attributes the slowdown in government spending and investment to “ongoing domestic governance concerns” and a “flood control project scandal.” This points to weaknesses in institutional accountability and transparency, which are central to SDG 16.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific SDG targets can be identified:

1. Target 8.1: Sustain per capita economic growth in accordance with national circumstances. The article is centered on the Philippines’ GDP growth, reporting a projected 5.2 percent for the third quarter, which is a deceleration from the previous quarter and below the government’s target range of 5.5 to 6.5 percent. This directly addresses the goal of sustaining economic growth.
2. Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure to support economic development. The mention of a “flood control project scandal” and the resulting “slowdown in government spending and investment” implies challenges in achieving this target. Effective infrastructure development is hampered by such governance issues.
3. Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries. The article highlights the country’s vulnerability by noting that “a spate of typhoons would have further constrained growth” and caused “weather-related disruptions.” This demonstrates the direct impact of climate-related hazards on the economy and the need for greater resilience.
4. Target 16.6: Develop effective, accountable and transparent institutions at all levels. The article’s reference to “ongoing domestic governance concerns” causing a slowdown in public spending points to a lack of institutional effectiveness and accountability. The scandal mentioned is a clear example of a failure in transparent governance.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions and implies several indicators that can be used to measure progress:

• Annual growth rate of real GDP: This is a direct indicator for Target 8.1. The article provides specific figures, such as the projected 5.2 percent growth for the third quarter, the 5.5 percent growth of the second quarter, and the government’s target of 5.5 to 6.5 percent.
• Government spending and investment levels: This is an implied indicator for Target 9.1. The article states that “government spending and investments lost momentum,” which can be measured as a percentage of GDP or in absolute terms to track progress on infrastructure development.
• Economic impact of natural disasters: This is an implied indicator for Target 13.1. The article notes that typhoons “constrained growth” and caused “weather-related disruptions,” suggesting that economic losses attributed to disasters can be used as a metric to measure resilience.
• Inflation Rate (Consumer Price Index): While a general economic indicator, it is mentioned explicitly in the context of household consumption (SDG 8). The article forecasts a 1.8 percent inflation rate, noting it stayed “below the Bangko Sentral ng Pilipinas’ (BSP) 2.0–4.0 percent target band,” which supports real income gains and stable consumption.
• Qualitative indicators of governance: This is an implied indicator for Target 16.6. The article’s references to “governance concerns” and a “flood control project scandal” serve as qualitative evidence of challenges in institutional accountability and transparency. Progress could be measured through perception-based indices or the number of resolved corruption cases.

4. Summary Table of SDGs, Targets, and Indicators

Source: manilatimes.net