The socio-economic metabolism of an emerging market: Monitoring progress of decoupling of economic growth and environmental pressures in the Philippines

In many Asian developing countries, including the Philippines, policy makers face tension between the needs of economic growth, human development and environmental sustainability. In a similar vein, the new global agreement on... [ view full abstract ]

In many Asian developing countries, including the Philippines, policy makers face tension between the needs of economic growth, human development and environmental sustainability. In a similar vein, the new global agreement on Sustainable Development Goals (SDGs) calls for the harmonization of economic and environmental goals. To shed light on the relationship between the economy and natural resources our research investigates the recent history and current state of environmental pressures in the Philippines as a case study, employing a material flow accounting approach based on national statistical sources. We analyze domestic material extraction and trade of materials vis-à-vis economic development for the period 1980 to 2014 and establish a set of standard material flow accounting indicators for the Philippines.

We also explore differences between territorial (production) and footprint (consumption) accounts to establish the extent to which environmental pressures in the Philippines serve domestic consumption or consumption abroad. About 40% of the overall material footprint occurred for the final demand of manufacturing goods followed by 25% for construction expenditure. The Philippines has started to follow the material consumption pattern of the region with non-metallic minerals and fossil fuels as key material component of urbanization and industrialization. While material efficiency has improved over the last three decades it is still only less than half of the global average. We find that the Philippine economy managed to grow while reducing material intensity because of an increasing share of services sector activities, which are less capital and material intensive. As a result, the relative changes of resource use and economic growth shows that MF and DMC grew slower than GDP, allowing for increasing resource productivity and relative decoupling to occur in the Philippines. Until 2010, material efficiency improved at an annual average rate of 1.7%. However, this trend was reversed since 2010 when stronger growth in GDP required proportionally more materials resulting in increasing material intensity of the economy, i.e. reduced material efficiency.

The DMC per capita and MF per capita in the Philippines are comparably low and well below the world average of 10 tonnes per capita; suggesting that the future material requirements of the Philippines may well grow, and even double over the decades to come. This will require well-designed policy frameworks to mitigate the environmental impacts and social and health costs of such growth.

The new data and indicators we present are aimed to inform the national policy agenda in the Philippines. They may help to formulate policies that integrate economic and environmental priorities and guide the Philippines, as well as rest of ASEAN countries and other developing nations in Asia toward achieving the SDGs.