The Philippine economy grew by a surprising 7.1 percent in the third quarter, an indication of the country’s resilience despite problems overseas.
If the government keeps this pace of growth in gross domestic product (GDP) in the next quarters, it may make a dent on the poverty problem without necessarily resorting to controversial policies such as population control, an economist said.
“Right now, the important thing is to focus on what we’re doing [which is to solve corruption],” said Alvin Ang, vice president of the Philippine Economic Society.
The Philippines exceeded expectations of economists and multilateral organizations such as the World Bank, International Monetary Fund, Asian Development Bank, after posting its highest quarterly growth since the third quarter of 2010.
“The beyond-expectation third quarter growth was driven by the services sector with the robust performances of transport, storage and communication, financial intermediation, and real estate, renting and business activities supported by the five consecutive quarters of sustained accelerated growth of the industry and the seemingly weather-tolerant agriculture sector," the National Statistical Coordination Board said in a report.
Ang, the former director of UST Research Cluster for Cultural, Educational, and Social Issues, said he did not expect that high growth would come from these sectors, particularly construction, which grew by 24 percent.
“The most important sector is manufacturing, because that’s where you produce products,” he said. “Construction is not sustainable, because once construction is done, it’s done.”
If the country continues to produce 7 percent growth rate for the next seven years, poverty in the Philippines could be reduced significantly. “If you grow 7 percent every year for the next seven years, it means the economy will expand by 49 percent, that’s almost half,” Ang said. “That means the poor will experience the spillover effect of the growth.”
The Philippines has been getting good international press recently, with entities such as HSBC projecting economic expansion due to a rise is the number of working-age people.
The HSBC Global Research report titled “The World in 2050” said the Philippines would leapfrog its way to the 16th spot among the world’s largest economies by 2050 with a robust and young population.
With 7 percent growth rate for 2010, the country can achieve development in the next 40 years and advance to No. 16 from being the 44th largest economy, the report said.
Last August, New York Times cited the country’s young and growing population, hailing the Philippines as “Asia’s economic bright spot.”
The young population of the Philippines drives its strong outsourcing industry, it noted. “[The Philippines] will remain competitive due to the sheer abundance of workers joining the labor force,” said in the article.
Education needed
Ang, however, warned that the Philippines would not be able to utilize its growing and young population without an empowered education sector.
Human capital is only potential capital and must be nurtured by providing the right education and proper health to become effective, he said.
“If everybody gets access to right education, population control will not be a function of the government but instead, an informed choice that is voluntarily rooted from the people themselves,” Ang said.
Ang said population control in itself is not evil, but if the government wants to make it a policy, it must be able to justify it.
“If they think the population control is the way to do it, they have to show why,” Ang said, citing Thailand, which he said was like the Philippines during the 1960s but was able to improve its economy essentially by reforming its structure.
A study titled “Population Policy and Economic Growth: The Case of Thailand and the Philippines” by Ida Pantig of the University of Tokyo said there was no direct link between population control and economic growth. “Enabling conditions” were responsible for economic growth, the study said. Kristelle Ann A. Batchelor
