Crossroads (Toward Philippine economic and social progress)
Philippine Star, 10 January 2018


The National Statistics Authority estimates that this year, our headcount will be 107 million Filipinos. This is based on all known statistical indicators about our population dynamics.

Crossing the century million mark. All population magnitudes for this year are larger than those for 2015 when an actual population census was taken.

According to our population census of 2015, there were 102 million Filipinos. So we broke the 100 million level about two years ago.

Population size arithmetic. The economic arithmetic of population is simple. More population means more food and other necessities to produce, and also more goods to consume. Another inevitable outcome is the need for more government expenditure, even if to meet only the need for basic services to the people.

It also means the necessity of more investment. If investment lags or fails to catch up, production capacity is threatened. This also imperils employment growth and opens the possibilities for poverty becoming a much larger problem to tackle.

Philippines, Indonesia and Thailand: population size and growth over time. The comparison of our country with two neighbors is fully enlightening.

(I will use data compiled by the UN Population Division, which are just slightly off from the more precise Philippine data, so as not to detract from data issues.)

In 1980, the population of the Philippines (47.06 million) and Thailand (47.48 million) were roughly equal, with Thailand slightly more populous. The population of the larger country, Indonesia (150 million), however, was much larger, more than three times as much of each country.

Three decades later in 2010, the population of the Philippines was 93.3 million; Thailand’s 69.1 million; and Indonesia’s 239.9 million.

Such numbers reveal a lot in terms of actual population increase. Philippine population expanded by 46.2 million more, or by almost 100 percent of the 1980 level. Thailand’s population grew by 21.6 million persons, or by just 46 percent of the 1980 population. Indonesia’s population also grew by about 60 percent of the 1980 population.

Thus, in relative terms, the Philippines today is more populous than both Thailand and Indonesia. Although Indonesia continues to have more people than the Philippines (because it is a much bigger country, both in land area and in population size), it can be said that Filipinos, by the family unit, tend to produce more members per household than Indonesians.

GDP per head. An obvious outcome of these is reflected in GDP per head of the three countries. Whereas all three started with the same initial conditions of being relatively under-developed, but with the Philippines having the edge at independence. Today, our country is falling behind the two.

According to World Bank estimates of GDP per head converted to equal purchasing power US dollars, Thailand leads. The measures for 2016 are: Thailand’s per head GDP is $16,946; Indonesia’s is $11,631; and that of the Philippines $7,819.

These measurements indicate differences that are stark and large. We must explain!

Two major factors have been in play to account for the event that we observe. The first is economic development policy and the second is direct population policy.

Economic development policy. I have often reminded readers of this column of how these countries have reformed their economic policies and sustained those that produced positive results for them. They have also supported and directly benefited from the growing interdependence of the ASEAN market.

The long rule of Suharto in Indonesia consolidated the country politically and economically. Though the economy was once one of the most insular of economies because of high industrial protection, it allowed foreign direct investments in natural resources industries. In 1987, Indonesia underwent major economic reforms that opened the economy toward the world markets and introduced better competition in domestic industries.

By following much more market-based labor market policies, it was able to attract a lot of foreign capital that took advantage of policies that employed labor. And slowly, Indonesia’s labor intensive industries, supported by foreign direct investments, began to conquer world markets.

Thailand, on the other hand, had been relatively an open economy over a much longer period of time, with a policy that welcomed foreign direct investments in general. It developed its agriculture and industry in the spirit of relatively open competition, although they also had preferential incentives for their own domestic industries.

In the course of time, these policies bore fruit to produce a high growth economy. Thailand is one of the most successful Southeast Asian economies in terms of economic performance.

Direct population policy. In terms of direct population policy, both Thailand and Indonesia have adopted proactive family planning policies since the 1960s. The result of these family planning policies have allowed the use of contraceptives that have effectively helped to reduce the fertility rate to a norm that allows reduction of family size among families.

The results of these policies can be seen in the way the population growth rates of both Thailand and Indonesia have fallen. Advances in maternal health care and in medicine have reduced death rates significantly in most countries.

In the Philippines where the debate on family planning had gone on for prolonged periods, the fertility rate remains one of the highest in the region, which today is at “3.” (Definition: Fertility rate is a measure of the number of live births per 1,000 women in the population).

Today, the fertility rate in Thailand is “1.4.” This is very low, about one-half the rate in the Philippines. Indonesia’s fertility rate is “2.3” Thus in both cases, the fertility rate is so much lower compared to that we find for the Philippines.