Return to growth expected in 2027

Monetary authorities expect economic growth to return to target in 2027 with the Philippines again expected to underperform this year and the next, highlights of last month’s policy meeting showed.

Gross domestic product (GDP) growth will likely “fall slightly below the government’s growth targets for 2025 and 2026,” mainly due to the impact of recent storms on agriculture, weaker construction activity and reduced demand for services, “before rising to within target by 2027.”

Policymakers also tagged an ongoing corruption scandal as possibly dampening investment sentiment and infrastructure project implementation, and said that continued uncertainties over US tariffs “also warrants continued monitoring.”

An effort to reduce fiscal leakages, they said, could help alleviate downside risks to growth from slower government spending by boosting budget efficiency and the economy’s prospects over the longer term.

GDP growth slumped to 4.0 percent in the third quarter from 5.5 percent in April-June, well below the 2025 goal of 5.5-6.0 percent and all but cementing a third straight year of below-target results.

Growth was higher last year at 5.7 percent but missed the objective of 6.0-6.5 percent. A year earlier it was 5.5 percent, also below the 6.0-7.0 percent goal. The economy last outperformed in 2022 when it topped the 6.5- to 7.5-percent target by growing 7.6 percent.

Economic managers will be reviewing their assumptions next week and the 2025 GDP goal is expected to be revised downwards. The 6.0- to 7.0-percent target for 2026 to 2028, meanwhile, could also be changed.

The Bangko Sentral ng Pilipinas’ policymaking Monetary Board lowered key interest rates for a fourth straight meeting last Oct. 9, citing softer GDP growth prospects and a benign inflation outlook.

With price growth expected to remain within expectations and following the third-quarter GDP slowdown, another cut is widely expected to be announced on Dec. 6.

Average inflation is expected to settle below the 2.0- to 4.0-percent target range at 1.7 percent this year. The forecasts for 2026 and 2027 were also lowered to 3.1 percent and 2.8 percent, respectively, last month from 3.3 percent and 3.4 percent in August.

The projected rise will be due to changes in the country’s rice policies and base effects, the highlights of last month’s meeting stated. Lower global oil prices are expected to offset higher power prices and the “risks to inflation are seen to be limited as price pressures continue to ease.”

“On balance, the favorable inflation outlook and moderating domestic demand provided scope for a more accommodative monetary policy stance to support economic activity,” the highlights state.

“Future monetary policy adjustments will continue to be guided by evolving risks to inflation and growth.”

The BSP’s policy rate currently stands at 4.75 percent following last month’s 25-basis point reduction.

Source: Manila Times

Extreme heat impact as PH reaches boiling point

Ten years ago, the world ga­thered in Paris, pens poised above a landmark agreement. The Paris Agreement, born of collective resolve, aimed to rewrite the climate narrative, setting ambitious goals to curb emissions and hold global warming at bay. As we mark this milestone a decade later, the question hangs heavy in the air: “Have we steered the ship away from the climate precipice, or are we merely rearranging deck chairs on a rapidly heating planet?”

A new report, a chilling testament to the escalating crisis of extreme heat, offers a stark reality check. “Ten Years of the Paris Agreement: The Present and Future of Extreme Heat,” a collaboration between Climate Central and World Weather Attribution, is a global analysis spanning the decade since the Paris accord. It reveals the extent to which our world has already been reshaped by rising temperatures and casts an ominous shadow on what lies ahead.

While the Paris Agreement has tempered some of the most catastrophic warming scenarios projected before 2015, the report underscores that the battle against extreme heat is far from won. As Friederike Otto, climate science professor at the Center for Environmental Policy, Imperial College London, noted: “The Paris Agreement is a powerful, legally binding framework that can help us avoid the most severe impacts of climate change.”

The analysis paints a picture of a world grappling with extreme heat’s relentless advance. Since 2015, surging global temperatures have resulted in an average of 11 additional hot days each year. Beyond slightly warmer summers, this is a fundamental shift in weather patterns that pushes the boundaries of human and ecological tolerance. The report projects that even if current emission reduction pledges are fully honored (a monumental “if” in itself), the trajectory is still toward 2.6 degrees Celsius of warming by 2100. This seemingly modest increase unleashes a cascade of dire consequences: events that are already highly impactful on people and ecosystems would be intolerably more severe.

 n Number of hot days per year in each country for global warming levels of 2.6 C and 4.0 C above preindustrial temperatures.PHOTO FROM THE REPORT ‘TEN YEARS OF THE PARIS AGREEMENT: THE PRESENT AND FUTURE OF EXTREME HEAT’

Today, extreme heat contributes to an estimated 500,000 deaths worldwide annually. The most vulnerable among us — the elderly, outdoor workers, those with preexisting health conditions and marginalized communities — bear its deadly brunt.

The implications of these global trends reverberate with urgency in the Philippines, an archipelago nation straddling the equator. Uniquely vulnerable to the intensifying impacts of extreme heat, the country can expect a relentless increase in the frequency and intensity of extreme heat events, with profound consequences across sectors.

Consequences for the nation

The health of Filipinos is on the line. As temperatures soar, heat-related illnesses and fatalities can surge, particularly in densely populated urban areas and among vulnerable populations lacking access to adequate cooling and health care. The agricultural sector, the lifeblood of many Filipino communities, faces a formidable threat.

Rising temperatures and prolonged droughts can decimate crops, imperiling food security and threatening the livelihoods of countless farmers. The Philippines’ critical infrastructure is also under siege. Extreme heat can strain the power grid, leading to blackouts and disruptions. It can buckle roads and transportation networks, disrupting commerce and everyday life.

As Kristina Dahl, vice president for Science at Climate Central, warns, “The Paris Agreement is helping many regions of the world avoid some of the worst possible outcomes of climate change, but make no mistake — we are still heading for a dangerously hot future.”

The government’s National Adaptation Plan (2023-2050) aims to fortify the nation against such climate impacts. But the stark reality is that a comprehensive Heat Action Plan is still under development.

The most urgent priority is for countries to dramatically increase their emission reduction targets, aligning their efforts with the Paris Agreement’s ambitious goals of limiting warming to 1.5 C or well below 2 C. Bold adaptation measures must be taken, and investments made to reduce the impacts of extreme heat to communities. This includes heat early warning systems that are effective at alerting the public about impending heat waves, and comprehensive heat action plans at the national and local levels.

Urban planning must promote cool roofs and incorporate accessible public transport systems that integrate cooling and shading. Educational campaigns can elevate public awareness, empowering citizens to protect themselves and their communities from extreme heat. Protection should be prioritized for the aforementioned most vulnerable. Intentional and equitable adap­tation efforts should include disaggregated data on gender, age and disability.

The future of extreme heat globally and in the Philippines hinges on the choices we make today. The world is at a crossroads: to choose between complacency and action, between a future defined by runaway warming, and a future where we protect the health and safety of all.

Source: Manila Times

Moody’s Analytics says 5% PHL GDP target ‘more manageable’

A 5% economic growth target for the Philippines in 2025 will be more realistic, Moody’s Analytics said, with the fourth-quarter performance unlikely to push full-year growth to the 5.5% to 6.5% target.

“A growth rate of around 5% will be more manageable for the country,” Moody’s Analytics Assistant Director and Economist Sarah Tan said.

In the first nine months, gross domestic product (GDP) averaged 5%, pulled down by weak public spending, consumption and investment in the third quarter.

The Development Budget Coordination Committee (DBCC) will review its macroeconomic assumptions and targets next week.

The DBCC first revised its targets in June, trimming its 2025 growth forecast to 5.5–6.5% and the 2026 outlook to 6–7%, citing “heightened global uncertainties” from the Middle East conflict and US tariffs.

Ms. Tan said fourth‑quarter GDP is likely to come in at 5.2%, which if borne out would represent a slowdown from the 5.3% posted a year earlier. It would also be well below the 6.9% needed to hit the 2025 target.

Asked if holiday spending will lift consumption, she said she is now “cautiously optimistic” after the weak third‑quarter performance.

She added the holiday boost may be overshadowed by weak government spending and still‑soft investment appetite.

Economy Secretary Arsenio M. Balisacan has said that he is counting on private spending to rebound on expectations of increased consumption and remittances during the holidays.

Meanwhile, Ms. Tan said one intervention that could boost the economy is rebuilding public trust by speeding up aid disbursement to calamity‑hit communities.

“Perhaps speeding up public spending would then be a positive signal to both investors and consumers that things are moving again,” she said, while adding transparency and accountability may help restore confidence. 

Source: Business World