The

Popu

latio

n-Po

vert

y N

exus

The

Phili

ppin

es in

Com

para

tive

East

Asi

an C

onte

xt

Ars

enio

M. B

alis

acan

Dire

ctor

, SEA

RCA

Prof

esso

r, U

P Sc

hool

of

Econ

omic

s

Man

ila P

enin

sula

Hot

el, M

akat

iCity

10 A

ugus

t 200

4

Pres

ente

d at

the

Book

Lau

nch

cum

Le

ctur

e of

�Th

e Ti

es T

hat

Bin

d:

Pop

ula

tion

an

d D

evel

opm

ent

in t

he

Ph

ilip

pin

es�

Bas

ed o

n th

e St

udy

The

Popu

latio

n-Ec

onom

y-Po

verty

Lin

ks: A

Q

uant

itativ

e A

sses

smen

t

by

Ars

enio

Bal

isac

an, D

enni

s Map

a,

and

Cha

risse

Tub

iano

sa

in a

ssoc

iatio

n w

ithLe

onar

do L

anzo

naR

osem

arie

Edi

llon

Fina

l Rep

ort p

repa

red

for t

he P

hilip

pine

Cen

terf

or P

opul

atio

n an

d D

evel

opm

ent,

2003

Com

paris

on o

f key

eco

nom

ic in

dica

tors

of

sele

cted

Asi

an c

ount

ries

The

popu

latio

n de

bate

and

the

dem

ogra

phic

tr

ansi

tion

Stud

ies

on th

e po

pula

tion-

econ

omy-

pove

rty

nexu

sEs

timat

es fr

om th

e ec

onom

etric

mod

elSi

mul

atio

n re

sults

Con

clus

ions

Org

aniz

atio

n

The

Phili

ppin

es in

Eas

t Asi

a� G

DP

per c

apita

19

50

-

2,0

00

4,0

00

6,0

00

8,0

00

10

,00

0

12

,00

0

USA Si

ngap

ore Ho

ng K

ong

Japa

nM

alay

sia PH

ILIP

PINE

STa

iwan

Kore

a Indo

nesi

aTh

ailan

d

Chin

a

19

75

-2,0

00

4,0

00

6,0

00

8,0

00

10,0

00

12,0

00

14,0

00

16,0

00

18,0

00

20,0

00

USA

Japa

n Hong

Kon

g Sing

apor

eTa

iwan

Mala

ysia

Kore

a PHIL

IPPI

NES

Thail

and In

done

sia

Chin

a

20

00

-5

,00

01

0,0

00

15

,00

02

0,0

00

25

,00

03

0,0

00

35

,00

0

USA Ho

ng K

ong Si

ngap

ore

Japa

nTa

iwan

Kore

aM

alays

iaTh

aila

nd

Chin

a PHIL

IPPI

NES In

done

sia

Pove

rty

redu

ctio

n in

Eas

t Asi

a

0102030405060

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

% Poor

Chin

aIn

done

sia

Thai

land

Philip

pine

sV

ietn

am

No

te: P

ove

rty

esti

ma

tes

ba

sed

on

a p

ove

rty

lin

e o

f U

S$1

/da

y p

er

per

son

.

% p

oor

GD

P &

Pop

ulat

ion

Gro

wth

Rat

es fo

r Sel

ect

Cou

ntrie

s, %

per

yea

r

4.1

2.36

8.0

1.87

8.8

1.58

9.9

1.20

0246810

Phili

ppin

esIn

done

siaTh

aila

ndK

orea

, Rep

.

Per c

apita

GDP

gro

wth,

197

5-20

00Po

pula

tion

grow

th ra

te

Popu

latio

n G

row

th R

ates

: Tha

iland

vs

Phili

ppin

es

0

0.51

1.52

2.53

3.5

1970

1975

1980

1985

1990

1995

2000

Phi

lippi

nes

Thai

Com

paris

on o

f Key

Indi

cato

rs

3.6

3.0

Elde

rly P

opul

atio

n G

row

th

-0.3

1.7

Yout

h Po

pula

tion

Gro

wth

2.5

2.8

Wor

kers

Pop

ulat

ion

Gro

wth

1.6

2.4

Tota

l Pop

ulat

ion

Gro

wth

Thai

land

Phili

ppin

es

Inco

me

per P

erso

n: T

haila

nd v

sPh

ilipp

ines

(in

US$

PPP

)

0

1,00

0

2,00

0

3,00

0

4,00

0

5,00

0

6,00

0

7,00

0

8,00

0 1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

PHIL

- Act

ual

THA

I

Dyn

amic

and

con

tent

ious

Con

sequ

ence

s of

pop

ulat

ion

grow

th o

n ec

onom

ic d

evel

opm

ent

Doe

s po

pula

tion

grow

th c

urta

il or

pro

mot

e ec

onom

ic g

row

th?

Or i

s it

inde

pend

ent f

rom

ec

onom

ic g

row

th?

The

Popu

latio

n D

ebat

e

In th

e 19

90s,

the

popu

latio

n de

bate

shi

fted

from

the

issu

e of

pop

ulat

ion

grow

th to

the

age

stru

ctur

e of

the

popu

latio

n.

Indi

vidu

als

have

var

ied

econ

omic

beh

avio

rs a

t diff

eren

t st

ages

in li

fe.

The

youn

g re

quire

inte

nsiv

e in

vest

men

t in

heal

th a

nd

educ

atio

n, p

rime-

age

adul

ts s

uppl

y la

bor a

nd s

avin

gs,

the

aged

requ

ire h

ealth

car

e an

d re

tirem

ent i

ncom

e.

The

natio

n�s

age

stru

ctur

e ha

s an

impo

rtant

impa

ct o

n its

eco

nom

ic p

erfo

rman

ce.

The

Popu

latio

n D

ebat

e

Dem

ogra

phic

Tra

nsiti

on

�� is

a c

hang

e fro

m a

situ

atio

n of

hig

h fe

rtilit

y an

d hi

gh m

orta

lity

to o

ne o

f low

fe

rtilit

y an

d lo

w m

orta

lity.

�

Popu

latio

ngr

owth

rate

time

deat

h ra

te

Birt

h ra

te

The

Dem

ogra

phic

Tra

nsiti

on

Phas

es o

f the

Dem

ogra

phic

Tra

nsiti

on

Phas

e 1.

Trig

gere

d by

initi

al d

eclin

e in

infa

nt m

orta

lity,

th

e yo

uth

depe

nden

cy g

roup

sw

ells

.

Male

Fem

ale

Phas

e 2.

Econ

omic

gro

wth

pro

mot

ed a

bout

20

year

s la

ter

whe

n th

e yo

uth

ente

rs t

he w

orki

ng

age

grou

p. Male

Fem

ale

Male

Fem

ale

Phas

e 3.

Econ

omic

gro

wth

may

or

may

not

be

impe

ded

as th

e el

derly

coh

ort s

wel

ls. I

t app

ears

th

at a

ris

ing

elde

rly s

hare

doe

s no

t de

pres

s no

r el

evat

e th

e ra

te o

f eco

nom

ic g

row

th.

Mal

eFe

mal

e

Mal

eFe

mal

e

Mal

eFe

mal

e

Phas

e 1

-Phi

lippi

nes

Phas

e 2

-Tha

iland

Phas

e 3

�Ja

pan

Find

ings

from

Ear

lier S

tudi

es

Dem

ogra

phic

cha

nges

follo

win

g W

orld

War

II w

orke

d in

fa

vor o

f mor

e ra

pid

grow

th in

Eas

t Asi

an c

ount

ries.

1

Abou

t one

-third

of E

ast A

sia�

s ec

onom

ic g

row

th is

at

trib

utab

le to

dem

ogra

phic

influ

ence

s.2

Had

all

coun

trie

s re

duce

d ne

t fer

tility

by

five

birt

hs p

er

thou

sand

wom

en in

the

1980

s, th

e po

vert

y in

cide

nce

wou

ld

have

bee

n re

duce

d by

a th

ird, f

rom

18.

9 pe

rcen

t (on

e in

ev

ery

five)

to 1

2.6

perc

ent (

one

in e

very

eig

ht).3

1Sa

chs

et. a

l. (1

997)

, Eco

nom

ic G

row

th in

Asi

a (1

965-

1990

).2

Bloo

m a

nd W

illiam

son

(199

7) a

nd B

loom

, Can

ning

and

Mal

aney

(199

8) o

n P

opul

atio

n D

ynam

ics

and

Econ

omic

Gro

wth

in A

sia

(196

5-19

90).

3Ea

stw

ood

and

Lipt

on (2

000)

.

The

Cro

ss-C

ount

ry E

cono

met

ric M

odel

Inve

stig

ated

the

rela

tions

hip

betw

een

popu

latio

n gr

owth

and

the

dem

ogra

phic

tran

sitio

n, o

n th

e on

e ha

nd, a

nd e

cono

mic

gro

wth

and

pov

erty

, on

the

othe

r, us

ing

cros

s-co

untry

dat

a fro

m 1

975

to 2

000

and

Philip

pine

pro

vinc

ial p

anel

dat

a fr

om 1

985

to

2000

.

Sim

ulat

ion

tech

niqu

es w

ere

used

to q

uant

ify th

e co

ntrib

utio

n of

pop

ulat

ion

grow

th to

the

obse

rved

di

ffere

nce

betw

een

the

Philip

pine

s� G

DP

per p

erso

n an

d Th

aila

nd�s

.

The

data

set

con

sist

ed o

f 80

deve

lope

d an

d de

velo

ping

eco

nom

ies.

The

Econ

omet

ric M

odel

Pove

rty

Red

uctio

n

�exp

ansi

on

of th

e pi

e�

(Gro

wth

C

hann

el) �d

ivis

ion

of th

e pi

e�

(Red

istr

ibut

ion

Cha

nnel

)

Popu

latio

n G

row

th�

Wor

kers

�Yo

uth

�O

ld

Det

erm

inan

ts o

f G

row

th�

Educ

atio

n�

Hea

lth�

Econ

omic

cl

imat

e/O

penn

ess

�Sa

ving

�In

itial

Con

ditio

ns�

Inst

itutio

ns

Inco

me

Gro

wth

Dire

ct

Effe

ct

Exte

rnal

ities

Dire

ct

Effe

ct

Rev

erse

C

ausa

lity

Rev

erse

C

ausa

lity

Con

trib

utio

n of

Pop

ulat

ion

Dyn

amic

s to

Ec

onom

ic G

row

th

C

ount

ry

Av

erag

e G

row

th

(GD

P pe

r per

son,

%)

N

et C

ontri

butio

n of

Pop

ulat

ion

(%)

Philip

pine

s 4.

10

1.06

Thai

land

8.

84

1.83

Indo

nesi

a 7.

98

1.27

Sout

h Ko

rea

9.90

1.

66

Not

e: E

stim

ates

of G

DP

per p

erso

n ar

e in

pur

chas

ing

pow

er p

arity

(PPP

).

Som

e H

ighl

ight

s of

the

Stud

y

Tota

l Pop

ulat

ion

Gro

wth

Rat

e ha

s a

nega

tive

and

sign

ifica

nt im

pact

on

econ

omic

gro

wth

.

Wor

kers

� Pop

ulat

ion

Gro

wth

has

a p

ositi

ve a

nd

sign

ifica

nt im

pact

on

econ

omic

gro

wth

.

Aver

age

Life

Exp

ecta

ncy

at B

irth

(a p

roxy

for h

ealth

) ha

s a

posi

tive

and

sign

ifica

nt im

pact

on

econ

omic

gr

owth

.

Ope

nnes

s to

trad

e ha

s a

posi

tive

and

sign

ifica

nt

impa

ct o

n ec

onom

ic g

row

th.

Qua

lity

of P

ublic

Inst

itutio

ns h

as a

pos

itive

and

si

gnifi

cant

impa

ct o

n ec

onom

ic g

row

th.

Why

the

Phili

ppin

es G

rew

Slo

w�

Tota

l Gro

wth

Diff

eren

tial

Actu

al G

DP

per c

apita

gro

wth

Varia

ble

Phili

ppin

esTh

aila

ndFo

rego

ne

Gro

wth

(%)

Initi

al C

ondi

tions

1.

072

GD

P pe

r per

son,

197

515

0280

5R

atio

of W

orke

rs to

Tot

al P

opul

atio

n53

.76

52.1

2

Popu

latio

n G

row

th0.

768

Tota

l2.

361.

58W

orke

rs

2.85

2.53

OPE

NN

ESS

64.3

067

.96

0.02

8 SA

VIN

G R

ATE

22.0

328

.02

0.20

6 H

uman

Cap

ital I

:Av

erag

e LE

B (1

976

�20

00)

64.3

966

.11

0.07

2 H

uman

Cap

ital I

I:Ill

itera

cy R

ate

(Ave

rage

, 197

6 -2

000)

7.93

5.58

0.11

6

INST

ITU

TIO

N2.

976.

260.

574

TRO

PIC

11

0.00

0

(Acc

ount

ed b

y M

odel

)2.

836

(ave

rage

in p

erce

nt, 1

975-

2000

)4.

100

8.84

04.

740

Wha

t if t

he P

hilip

pine

s fo

llow

ed

Thai

land

�s P

opul

atio

n G

row

th

Path

from

197

5 to

200

0?

Wha

t is

the

Impa

ct o

n Ec

onom

ic G

row

th?

Addi

tiona

l inc

reas

e of

at l

east

0.7

6% p

er y

ear,

for

the

perio

d 19

75 t

o 20

00,

on t

he a

vera

ge

inco

me

per p

erso

n

Cum

ulat

ive

incr

ease

of

ab

out

22%

on

th

e av

erag

e in

com

e pe

r per

son

in th

e ye

ar 2

000

Incr

ease

on

the

aver

age

inco

me

per p

erso

n in

th

e ye

ar 2

000

to U

S$ 4

,839

.00

from

US$

3,

971.

00 (i

n PP

P)

Actu

al a

nd S

imul

ated

Inco

me

per P

erso

n

0

1,00

0

2,00

0

3,00

0

4,00

0

5,00

0

6,00

0

7,00

0

8,00

0 1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

PH

IL-

Act

ual

PH

IL S

IMT

HA

I

Wha

t is

the

Impa

ct o

n Po

vert

y?

If th

e Ph

ilippi

nes h

ad

Tha

iland

�s

pop

ula

tion

grow

th:

Pove

rty in

cid

ence

wou

ld h

ave

been

5.

5 p

erce

nta

ge p

oint

s les

s

Mor

e pe

ople

wou

ld h

ave

been

b

roug

ht o

ut o

f pov

erty

, ab

out 3

.6

milli

on m

ore

Exte

ndin

g th

e Si

mul

atio

n to

Foc

us

on R

ural

Are

as�

Why

rura

l are

as?

!2

of e

very

3 p

oor p

erso

ns a

re lo

cate

d in

rura

l ar

eas;

dep

ende

nt m

ainl

y on

agr

icul

ture

for

inco

mes

.!

Even

urb

an p

over

ty is

larg

ely

spill

over

effe

cts

of ru

ral p

over

ty.

Savi

ngs

from

pro

visi

on o

f bas

ic e

duca

tion

and

heal

th s

ervi

ces

beca

use

of s

low

er p

opul

atio

n gr

owth

rate

s

Thes

e sa

ving

s w

ill b

e ch

anne

led

to th

e ru

ral

sect

or, p

artic

ular

ly a

gric

ultu

re

Slow

er P

opul

atio

n G

row

th in

the

R

ural

Are

as�

Incr

ease

in

pare

ntal

in

com

es

from

in

crea

ses

in

prod

uctiv

ityO

ther

fa

ctor

s

Slow

er

popu

latio

ngr

owth

savi

ngs

from

publ

ic

educ

atio

n

and

heal

th

Rur

al

inve

stm

ent

(Agr

iR&

D,

Irrig

atio

n,

Etc)

Pove

rty

Red

uctio

n

Pote

ntia

l sav

ings

Estim

ated

sav

ings

from

bas

ic e

duca

tion:

Php

128

billi

on o

ver a

per

iod

of 1

0 ye

ars

Estim

ated

sav

ings

from

bas

ic h

ealth

:Ph

p52

bill

ion

Very

con

serv

ativ

e es

timat

es

Pove

rty

Inci

denc

e in

the

Agri

Sect

or

0

0.2

0.4

0.6

0.8

Yea

r 0Y

ear 1

Yea

r 2Y

ear 3

Yea

r 4Y

ear 5

Base

Sce

nario

: Sta

tus

quo

Sim

ulat

ed S

cena

rio 2

: ass

umes

a d

eclin

e in

pop

ulat

ion

and

an in

crea

se in

agr

icul

tura

l sec

tor i

nves

tmen

ts

Rur

al p

over

ty

inci

denc

e is

si

gnifi

cant

ly

redu

ced!

Pove

rty

inci

denc

e in

the

agri

sect

or

Sour

ces

of F

utur

e Po

pula

tion

grow

th

Unw

ante

d fe

rtili

ty (1

6%)

Wan

ted

fert

ility

(19%

)

Popu

latio

n m

omen

tum

(6

5%)

RES

PON

SE�

Fam

ily p

lann

ing

prog

ram

�C

reat

e so

cio-

econ

omic

con

ditio

ns

that

favo

r sm

alle

r fa

milie

s

�R

aisi

ng a

ge a

t firs

t bi

rth

�D

elay

ed a

ge a

t m

arria

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