Page last updated at 06:51 CST6CDT, Friday, 14 June 2019 PH
One does not have to rely on Philippine government propaganda or cockeyed optimists like me to forecast bright prospects for the Philippine economy for the next decade or so. More than one think tank or international organization after another have been lavishing praises on the Philippine economy in recent months. The latest one was the prestigious Oxford Economics that recently ranked the Philippines as the second most promising emerging market in the world in the next ten years. The Philippines is second only to India that took the top spot as the biggest growth star in emerging markets by 2028. The rankings go as follows in descending order: India, the Philippines, Indonesia, China, Malaysia, Turkey, Thailand, Chile, Poland and South Africa.
What factors were considered by Oxford Economics to make such a bullish prognostication for the Philippine economy during the coming decade or so? It is not surprising that the main factor is the young, growing and English speaking population of the Philippines: “The Philippines is set to have the highest increase in its labor force of any of the top 10 which alongside its GDP growth of 5.3% means it will be one of the world’s fastest growing economies sooner than later.” Thanks to the demographic dividend that the Philippines can enjoy at least over the next generation or so, a large supply of productive manpower as well an expanding middle-income market of more than 100 million individuals will fuel both a consumer-led and investment-induced growth of GDP. In fact, the 5.3% projection may be an underestimate. Emerging markets like India and China grew at faster rates of more than 10% annually when they were at similar stages of development in which the Philippines will be in the next decade or so.
It is noteworthy that India is ranked ahead of China in the list of Oxford Economics which forecasts the former to be the world’s largest economy in the near future and not only among emerging markets. China is only number four because of its rapidly slowing economy while suffering from very high debt levels. Furthermore, China is facing a very serious demographic crisis as recently reported in the New York Times (January 17, 2019). Chinese academics recently delivered a stark warning to the country’s leaders: China is facing its most precipitous decline in population in decades, setting the stage of potential demographic, economic and even political crises in the near future. According to the Chinese Academy of Social Sciences, a decline in the birth rate and an increase in life expectancy mean that there will soon be too few workers able to support an enormous and ageing population. Although the Government started to ease enforcement of the “one child” policy, it is almost impossible to reverse the trend of declining fertility rates as countries like Singapore, Japan and South Korea have experienced. After a brief uptick, the Chinese birth rate fell again in 2017, with 17.2 million babies born compared to 17.9 million in 2016. Although the number of families having a second child rose, the overall number of births continued to drop. It was even estimated that the total number of births for 2018 could have fallen to as low as 15 million. In fact, some cities and provinces reported declines in local birth rates of as much as 35 percent. (To be continued).