The national economic growth has slowed down in the third quarter of 2018, the first time since three years ago, raising serious fears that the economy will not be able to attain the government’s target for this year.
Statistics showed the economy expanded 6.1 percent from July to September, slower than the 6.2 percent growth of the previous quarter. The growth was the weakest since the 6.0 percent recorded in the second quarter of 2015.
To attain the government’s full-year target of 6.5 percent to 6.9 percent, the economy must grow at least 7 percent in the fourth quarter, according to Socioeconomic Planning Secretary Ernesto Pernia.
The slowdown in the gross domestic product has been expected. The weakening exports because of decreasing global demands and the decreasing agricultural output because of the typhoons have largely contributed to slower growth.
The softening public spending due to the rising prices of basic commodities was also another factor. Pernia, however, said "the slowdown in household spending is deemed to be abatable and temporary, but we can only do so much."
Yes, household spending is one crucial economic growth barometer. A brisk increase in consumer movement would, of course, shove the economy upward because it triggers more manufacturing activity.
But what happened today is that given the increasing commodity prices in the wake of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, a large portion of the population lost a significant amount of their purchasing power.
Economic experts hope for a robust recovery in the fourth quarter in order for the economy to beat the government’s target for the whole year. But it remains to be seen whether the economy will rebound in the coming months. We all know that the effects of TRAIN Law and the rising inflation are just starting to take their toll.