Philippines pays high price for unchecked population growth

If development were a race, it may be said that among the competitors, at least in Southeast Asia, the Philippines and Thailand were the most evenly matched when the contest started. Their total populations were almost the same in the 1950s and, over the years, the infant mortality rate (IMR) and the life expectancy at birth (LEB) for both countries were not too far apart.

By 1975, even their incomes, measured in per capita Gross Domestic Product (GDP), were about even, despite the fact that a quarter of a century before that, the Philippines’ per capita income was just slightly lower than Japan’s.

But some 25 years later, as the world entered a new millennium, the Philippines would register one of the poorest records in Asia and would be overtaken by most of its neighbors.

*figures are the averages of the year and the four years preceding

Fallen star

TThe Philippines’ move from being one of Asia’s brightest stars to one of fading glory (it has also been described as the “sick man” or, to be politically correct, “person” of the region) has often been attributed to its inability to curb its high population growth rate. But such observations have always been made in general terms.

Thailand has a higher per capita GDP now partly because its population, which used to be about the same as the Philippines, was 62 million as of the year 2000 compared to this country’s 75 million. Thailand’s total fertility rate (TFR) was down to 1.9 for the same year while Indonesia’s was 2.5. On the other hand, the Philippines, while registering an impressive 50 percent reduction in TFR, still had the highest rate of 3.6.

Indeed, even in those broad terms, it does make one wonder if population has much to do with the fact that, according to World Bank data, the percentage of the Philippine population living below the international poverty line of US$1 per day in 2000 was 14.6. This was certainly dismal compared to Thailand’s less than two percent or even Indonesia’s 7.2 percent.

And now comes a new report that goes beyond the generalities. It gets into details, translating into dollars and cents the impact on the Philippines—economy, social services, etc.—of allowing the population to grow at its present high rate. It goes into the specifics of why failure to recognize that population is an important element to be considered in setting economic growth goals and preparing development plans will undermine the achievement of those very same objectives and the execution of those programs.

The report The Population-Poverty Nexus: The Philippines in Comparative East Asian Context was prepared by Arsenio M. Balisacan and Charisse J. Tubianosa for the Asia Pacific Policy Center, through the support of the Philippine Center for Population and Development, Inc. It included contributions from Dennis S. Mapa, Leonardo A. Lanzona, and Rosemarie G. Edillon.

Same difference

The report builds on work done in the past quarter of a century. While it includes data already cited in other studies like GDP, quality-of-life indices, among others, it is groundbreaking for looking into what it calls foregone benefits, primarily incomes and rates of economic growth.

Despite using another tack in looking at the population issue, it echoes conclusions already reached through different ways by different people and groups: “Population matters are inexorably linked with economic growth, investments in human capital, the status of women, and the environment, among others.” The impact of population growth is much more significant compared to the influence of other factors that the study also looked into like governance, graft and corruption, availability and quality of social services.

It may be said that the report answers a series of “What ifs…” Questions like: What if the Philippine population grew at the same rate as Thailand, how much reduction will there be in the percentage of people below the poverty line? or What if the Philippine population is smaller, what would be the per capita income of Filipinos?

Using simulations, the report plots the economic growth path the Philippines would have taken if the rise in its population had followed the same route as those of its neighbors. While the Philippines and Thailand, for instance, started at about the same point population-wise in 1975, Thailand’s falling population growth rate was complemented by rising per capita GDP, and at very significant rates. On the other hand, the Philippines’ almost constant population growth rate was accompanied by snail-paced increments in per capita GDP.

Thailand’s per capita income grew to eight times the 1975 level, Indonesia 6.5 times and South Korea 10 times. The Philippines could only manage 2.6 times but it had the highest population growth rate among the three at 2.36 percent a year on the average.

The report says a one-percentage point reduction, on the average, in total population growth from 1976 to 2000 could have meant an increase of 1.23 percentage points in the average income growth rate of countries.

That is significant considering that an earlier study by Balisacan and Pernia (2003) showed that a one percent increase in the overall mean income would raise the mean income of the poorest 20 percent of the population by about 0.5 percent. It was also established that with a fixed level of illiteracy rate, a more rapid population growth would curtail economic growth. In the case of the Philippines, this means a one-percentage point increase in the population growth rate lowers the growth of average per capita GDP by about 48 basis points, as increases in the dependency burden outpaces the growth in the working-age population.

Other variables

An additional year increase on the average life expectancy at birth seems to have a more positive effect on incomes, raising by about 5.5 basis points the average growth rate. This finding is consistent with the quality versus quantity trade-off with respect to family size preference. An economy more open to trade is also conducive to economic growth—a 10 percent increase in openness, measured by the percentage of total trade (exports and imports) to GDP, translating to an increase of about eight basis points, all other things held constant. Savings also affect economic growth positively, a one percent increase in saving rate resulting in a rise of about five basis points in the average income per capita growth.

The quality of public institutions, which is based on an overall index developed by Knack and Keefer (1995) scaled from zero (worst) to ten (best), also have an impact on economic growth—an improvement of one-point increase in the index raising the average growth rate by as much as 17 basis points.

Looking at these factors in relation to the Philippines, and in comparison with Thailand, indicates that this country is unable to make the most of what should be positive elements partly because of the heavy population burden.

For instance, the growth in the labor force boosted economic growth in the Philippines by only 1.06 percentage points, while the comparable figure for Thailand was 1.83 percentage points. The report shows that, on the average, a one-percentage point rise in the average workers’ population growth (between the years 1976 to 2000) results in an estimated expansion of about 1.79 percentage points in the average income growth rate for the 80 countries included in the study.

The difference in the per capita GDP growth rates between the Philippines and Thailand in the period 1975-2000 was about 4.7 percentage points—the Philippines growing at the rate of 4.1 percent and Thailand by 8.8 percent. For the Philippines, having the same population growth rate as Thailand would have meant an additional 0.768 percentage points more in per capita GDP every year.

But if the Philippines also had comparable saving rate, illiteracy rate and life expectancy at birth (LEB) as Thailand, it would mean an additional 0.394 percentage points of growth in per capita GDP every year. Another 0.574 percentage points every year would be added to the growth rate in Philippines’ average per capita income if the quality of its institutions were the same as Thailand’s.

Monetary equivalent

The 0.768 percentage point annual increase in per capita GDP resulting solely from a slower population growth would have meant a total of 22 percent increase in average income per person by the year 2000. It is even more impressive when translated into monetary values. It would have meant that rather than a per capita GDP of US$993 for the year 2000, Filipinos would have gotten US$1,210 instead.[1]

On a broader scale, Thailand’s and the Philippines’ diverging population growth paths also had a telling effect on the poverty situation in both countries. In 1997, some 25 percent of the Philippine population was classified as below the poverty line, using Balisacan’s (2003) estimates. But if the country registered similar population growth figures as her neighbor, and with the respective increase in per capita income, poverty incidence would have been reduced by 11 percentage points to about 14 percent in the year 2000.

In actual numbers, this 11 basis point reduction meant over one million families would not have been counted among the poor by the year 2000.

With rural poverty accounting for about three-fourths of national poverty, it was found that a significant decrease in rural poverty could be achieved if population growth slowed, incomes rose and investments were made in the agricultural sector including research, irrigation, extension. Such investments could be paid from savings resulting from lesser demands for basic education and health services due to a smaller population.

This kind of intervention could lower the poverty incidence by about 60 percent on the national level and 70 percent in the rural sector.

Where, how to jump in

Having established that the population issue has to be faced and addressed particularly by the government, the paper moves on to identify critical areas where interventions could make a difference. Apparently, population growth comes out as one of the significant factors that needs to be addressed if the Philippines wants to at least be at par with others in the region.

Fertility reduction, lowering the number of average children a child-bearing woman will have in her lifetime, is the practical way to slow population growth. The study presents anew some factors, not just outright birth control, that can contribute to making a lower TFR achievable, even desirable. A predominantly older female population and older age at marriage help curb fertility. Education/employment by women makes time off from work due to childbearing much more costly. A low IMR, which gives parents greater assurance that the children they will have will survive childhood, also encourages them to opt for smaller families.

These “personal” factors that can promote the desire for fewer children may be boosted by adequate and quality primary health care facilities that will contribute to assuring child survival. Institutional social security systems and other programs that will assure old-age support make it unnecessary for elderly parents to rely on children to care for them.

The report says, “When wanted fertility is higher than replacement level (a TFR of 2.1 per woman), influencing the fertility preferences of couples would require policies creating an environment that would encourage value of the quality of children over quantity.”

Reviewing how other Asian countries have achieved their population goals, the report concludes that each one had to adopt a different policy menu. Japan, which now has to cope with a rapidly aging population and almost zero birth rate, relied on better child survival rates through immunization, delayed marriages and abortion, which had been legalized. However, it must be noted that this phase will take about a century before it is felt.

Population growth slowdown in Thailand, Singapore, Sri Lanka and South Korea was boosted by lower infant and child mortality rates and high female education. Thailand was also helped along by a relatively stable government machinery (despite a series of coups earlier) that was consistently supportive of a purposive population program. The country was more open to new methods of contraception and developed innovative ways to bring family planning services to the people.

Indonesia brought its population growth rate to manageable levels through consistent and high-level political support and external assistance. The government’s determination and strong political will overcame what could have been negative effects from low income, low female education and high infant and child mortality.

Consistent in its variability

While the policy mixes in these countries varied, they shared one benchmark—consistency, something which the Philippines unfortunately lacks. Consensus—and political will—remain elusive. The report points out that while the ousted Marcos regime was strongly committed to reduce fertility and population growth, the country has since been plagued by “a constant shift in policy and a wavering support for family planning programs with each change in government.”

The experiences offered by her neighbors show that “there is no single formula for determining how fertility and population growth may be effectively reduced.” Debate still rages if the Philippines should start with socioeconomic changes or family planning programs. “Indeed, for some, the case may have been higher income levels, increased education for women, rising age at marriage and lower infant mortality. But the opinion is strong that it is governance and having moral leadership in matters of population policy that is crucial to success,” the report says.

Only the most blinkered observers could fail to accept that population growth has much to do with the sorry state of the Philippines now. The study does not single out population as solely to blame for the country’s “dismal” economic performance, citing other variables like saving rate, openness to trade, and quality of institutions. However, population makes a significant contribution to economic development and, left unchecked, it could only worsen the existing poverty situation.

The report acknowledges that there are both direct and indirect ways to address the issue. Both methods have to be employed in order to effectively have an impact on managing the country’s population. To illustrate, these methods may include a well-designed and well-funded family planning program, as well as finding ways to improve the status of women, perhaps through education, more job opportunities and, of course, health care. It is also important to put safety nets for those sectors that may be negatively affected by a slower population growth (like agriculture). Underpinning all this, however, is political will.

For like the chicken-and-egg conundrum, indirect interventions require investments and investments come from savings that result from not having to spend as much on a large population. It is—or should be—obvious by now that in terms of providing basic services, the Philippines is just marching in place, hardly moving at all. Improvements in the quality of health care, public education, utilities and other critical areas that will, in turn, improve quality of life cannot be achieved when the country does not even have enough to provide just for annual increases.

As the report points out, “any approach would be futile without the firm commitment from the country’s leaders and other influential sectors of society.”

Researchers quoted by the report urge the government to “make a convincing case regarding the consequences of continued rapid population growth and the goal of moderating it as soon as possible.”

The new report, by reducing the debate—and the statistics—into bite sizes of information like actual foregone monetary benefits and economic growth rates, should contribute to a committed government’s arsenal of weapons in fighting the cause for a significant slowdown in the Philippines’ population growth.