Economics

The relationship between economic growth and population growth has long been established.  Thomas Malthus claimed that there is a tendency for population to outgrow food production because the latter increases at a geometrical rate, the former at an arithmetic rate. The Philippine economy has proven this Malthusian catastrophe holds true, in that way the country has not been able to post a significant level of economic growth to satisfy the ever increasing demand of its ballooning population.

There is the on going debate on the relationship of population and economic growth. On the positive side, a huge population means a bigger labor force, more competition in the market which in turn entails innovations and technological advancements (Fumitaka, 2005). On the other hand, a large population heightens the scarcity of resources, meager savings, and constrained development of foreign exchange and human resources. Unfortunately for developing countries, the latter is always the case as proven by the Philippine experience.

It is worth nothing that Philippines was among the pilot countries to launch a population program in 1970 that became a model for others (Orbeta  Pernia, 1995). However, while other counties embarked on effective implementation of population programs to bring down their annual population growth rate, the Philippines is still growing by over 2 percent. Philippines and Thailand used to have the same population size of 36 million sometime in 1970. The effective population program of Thailand allowed them to slow their population growth and to speed up their progress. On the other hand, Filipinos are yet to appreciate the importance of strong policy on population to achieve socioeconomic growth.

The population of the Philippines in 2007 is about 89 million, composed mostly of young individuals (National Statistics Office of the Philippines). The population growth rate of the country is among the highest in Asia, averaging 2.04 percent per year. According to the last survey conducted by the National Statistical Coordination Board in 2006, 12.2 million Filipinos or 15.5 percent are considered subsistence poor which means that these people do not have enough income to buy their own food. True enough, saving rate at the household level has been declining, only 15 percent of the total income of the family in 2006 goes to investment. As the youth dependency group swells, the demand for primary education and primary health care becomes more taxing in the economy.

On the Policy Paper released by Philippine Institute for Development Studies, Orbeta and Pernia (1999) stresses that population growth impedes economic growth because of its impact on savings. Estimates using cross-country data show the negative impact of rapid population growth on savings. Low savings implies limits to finance investments which are imperatives of economic growth. While Thailand and Indonesia (the latter with lower per capita income than the Philippines) have been saving at around 35 percent of GDP in recent years, the Philippines has a meager savings rate of around 20 percent. Consequently, the Philippine investment rate (as a percentage of gross domestic product) is only around 25 percent compared to 40 percent and 44 percent of Indonesia and Thailand, respectively. Simulation exercise done by Mapa (2009) shows that had the Philippines followed Thailands population growth path results to an additional increase of at least 0.76 percentage point per year, for the period 1975 to 2000, on the average income per person, an increase in the year 2000 to US 4,839.00 from US 3,971.00.

The problem of booming population is always associated with unemployment (Asian Development Bank). When the economy is growing slowly it cannot generate the necessary employment to satisfy the labor supply and this will translate into either a fall in wages or an increase in unemployment. As shown in table above, Philippines has the highest unemployment rate among South East Asian countries. Further, the continued growth in the number of overseas Filipino workers is also a testimony to the lack of employment opportunities in the country.

Human capital investments are also negatively impacted by rapid population growth. National level analyses show that while this negative impact is negligible in terms of school attendance rates, the allocation of resources per pupil has been quite telling.  More pupils are accepted in school but with lower resources per pupil. This is also the case in the health and nutrition sector. At the household level, bigger family size per household implies smaller share per members education, health and nutrition needs. Performance in school of children in large families is relatively poor compared to children belonging to small families (Asian Development Bank). Also, they have relatively poor health, lower survival probabilities and are less developed physically.

Philippine has not able to bounce back to its per capita income level attained in the early 1980s. The regional economic crisis experienced in 1997 plus the recent calamities that hit the country made the situation even worse. Thus, if the political leaders want the country to catch up with its neighbor countries, the country cannot afford anymore delays. Mapa (2009) identifies three possible sources of countrys population growth and the corresponding responses the country have to commit. The causes are (1) unwanted fertility at 16 percent (2) wanted fertility at 19 percent and (3) population momentum at 65 percent. Unwanted fertility calls for an effective family planning to incorporate well-targeted human capital investments as well as greater economic opportunities for women (Orbeta  Pernia, 1999). Wanted fertilities warrant socio-economic environment that favors small families. Finally, raising age at first birth and delayed age at marriage are deemed appropriate to solve the population momentum (Mapa, 2009).