Page last updated at 03:25 Asia/Manila, Thursday, 03 April 2014 PH
Dr. Jim Walker, analyst par excellence of economic developments in Asia and founder of ASIANOMICS, has come out with another superlative for the Philippine economy. We can now add to monickers like "New Asian Tiger," "Breakout Nation," "Rising Star of Asia," "Sweet Spot Economy," and "Fastest Growing Asian Economy," the new flattering label given to the Philippines by Dr. Walker: "The Perfect Fit." His bullish observation about the prospects for our economy in the medium and long term is firmly based on our large, young and growing population. Together with many other foreign observers of the global economy, Dr. Walker is happy the birth control advocates are failing in their efforts to transform the Philippines into a poor and aging population. The supporters of Reproductive Health (which internationally includes abortion rights) can talk in Manila or elsewhere until their faces are blue. The Philippines will continue to treasure its young and growing population.
The latest report from ASIANOMICS starts with the following commentary: "According to United Nations projections, between now and 2050 the working age population (15-64 year olds) in North Asia--China, Japan, Korea and Taiwan--will shrink by over 190 million. Over the same period in Southeast Asia the working age cohort will rise by 98 million. Indonesia will supply the biggest increase in workers with 53 million but it is closely followed by the Philippines where the workforce will increase by 46 million." The report then expounds on how Japanese companies are eyeing the Philippines as a relocation site for many of its manufacturing firms. This observation is confirmed by PEZA Director General Lilia de Lima who has repeatedly appealed to developers of industrial zones to significantly increase their capacities because she can hardly cope with the requests of Japanese companies for space in these export processing zones. Manufacturing at last is becoming another strong pillar for the rapid economic growth we will be experiencing in the next decade or so.
Because our population is rapidly reaching the 100 million mark and is expected to peak at about 150 million by the middle of this century, our country is a perfect fit for the aging countries of Northeast Asia and such ASEAN countries as Singapore, Malaysia and even Thailand that is prematurely aging. As can be gleaned from the ASIANOMICS glowing report, the poverty problem of the Philippines today cannot be attributed to population growth. There are other more obvious explanations: "The English-language proficient population...has the potential to transform the Philippines into the fastest growing country in Asia for years to come--if only politicians' attitudes towards foreign direct investment can be changed. But there are good signs in that respect. For the first time in our 20 plus years in Asia, Philippines' governance is being compared favorably with other countries in the ASEAN. Moreover, the Aquino Administration has made giant strides in building a much cleaner, more transparent public procurement and infrastructure project tendering and award process. He has one last economic legacy to achieve--more openness. That will be his goal for 2015."
We can infer from these insightful remarks that the Philippines became the "sick man of Asia" for most of the last twenty years because of poor governance (spelled corruption), unenlightened economic policies, and ultranationalism. Thanks to the reforms introduced slowly and painfully over the last four to five Governments, the Philippines is now highly regarded by credit rating agencies, international agencies like the World Bank and Asian Development Bank and foreign investors. The engines of growth are the remittances of overseas Filipino workers, the IT-related services, tourism and infrastructure spending by the Government. All these are highly dependent on a young and growing population. Investors in the capital market are assured that not even the tapering off happening in the U.S. will drastically reduce the inward flowing portfolio investments. The summary of the Introduction to the study reads: "Economically, politically, technically and from a corporate fundamentals view Philippine equities are a BUY. We would go further and say that demographically, they are a buy today and for years ahead regardless of valuation. If this government, and future Administrations, can cash in on the Philippines' population growth, its good macro fundamentals and the solid governance fundamentals put in place in the last four years, then Philippine assets will more than justify rich current valuations. Nowhere in Asia hold more appeal: all the Philippines has to do is seize the day." I hope the RH Bill proponents will take note of these clear advantages of a growing population. For comments, my email address is email@example.com.