The global balancing act.Why good policy starts with dry feet TIMO NG

When the World Economic Outlook (WEO) for Fall 2025 was released by the International Monetary Fund (IMF), it confirmed what many feared: global growth is slowing, and risks remain "tilted to the downside." Despite easing trade tensions, volatility persists, demanding complex, minded responses.

- WONDERS DIWA C. GUINIGUNDO

For emerging economies like the Philippines, these global forces slowing growth, inflation risks, and geopolitical instability pose real threats.

Yet the deeper question is one of capacity: how can we pursue sophisticated global strategies when our domestic foundations are so fragile?

THE IMPERATIVE OF GLOBAL STRATEGY

The IMF's prescriptions are not abstract theory but pragmatic defenses against global turbulence.

The call is clear: rebuild fiscal buffers, pursue real fiscal consolidation, and restore market confidence through transparent, sustainable policy.

Equally vital are growth-enhancing structural reforms to raise productivity and long-term potential. Central bank independence must be protected as a bulwark against political interference and inflationary populism. Industrial policy, while valid, must be carefully weighed to avoid crowding out private initiative and imposing more fiscal burden.

These are not optional ideals but strategic blueprints for economic survival. To dismiss them is to court self-inflicted crisis. The real test lies not in strategy, but in execution.

THE LOCAL DRAG: WEAK GROWTH AND WEAKER TRUST

The Philippine economy's recent performance exposes the cost of chronic execution failure. To be announced by the Philippine Statistics Authority today, growth likely slowed again in the third quarter, missing the 5.5-6.5% target. This broadsheet's poll result indicates forecasts of a low of 4.7% and a high of 5.9%. But market signals soft equities, weak sentiment indices, and a cooling Purchasing Managers' Index - all point to loss of momentum.

Even if global conditions justify monetary easing by the Bangko Sentral ng Pilipinas (BSP), domestic transmission is blunted by eroding public trust and deepening political uncertainty. This undermines investor confidence, drives capital outflows, weakens the peso, and fuels inflation.