Research and analysis

One Hundred Million Strong - August 2014

Published 15 August 2014

This research and analysis was withdrawn on 1 August 2016

This publication was archived on 4 July 2016

This article is no longer current. Please refer to Overseas Business Risk – Philippines

This publication was archived on 4 July 2016

This article is no longer current. Please refer to Overseas Business Risk – Philippines

Detail

On Sunday, 27 July, the Philippine government officially welcomed the country’s 100 millionth citizen, a baby girl named Chonalyn Cabigayan. The Philippine Statistics Agency (PSA), noting that 3 Filipino babies were being born per minute, worked on the basis that the national population count would reach 100 million at 12:06am on the 27th of July, when Chonalyn was born .

The government, through its Commission on Population (PopCom), said it would monitor the conditions of 100 other babies born across the country at around the same time to see if living standards improve over time. PopCom representatives argued that the Philippines should bring its fertility rate down from three children per woman to a more manageable replacement rate of two, in a bid to relieve the pressures caused by rapid population growth. The Catholic Church took the opposite view, arguing that rising populations were good for the economy, as a bigger workforce would produce more goods and services.

The Catholic hierarchy in the Philippines has resisted the Reproductive Health (RH) bill throughout its formulation and passage through Congress and the judiciary. Nearly 80% of the national population identify as Roman Catholic and many follow the lead given to them by the church. Previous efforts to curb the country’s population growth have been held up by the Church, which actively discourages the use of artificial birth control. In April 2013, after more than a decade of debate, the government approved the RH law to help poor families gain access to family planning methods. However, implementation was legally suspended until April 2014, when the Supreme Court finally upheld most of the basic law after striking out a few provisions.

Economic Implications

The Philippines is now the 12th most populous country in the world. Poverty incidence stands at about 25% of the population. The unofficial unemployment rate in December 2013 stood at 25%, equivalent to about 11 million jobless Filipinos.

Rapid population growth is a drag on national development. If the economy grows slower than the number of Filipinos born each year, there simply won’t be a big enough cake to share. Even in years like 2007 and 2010, when per capita economic growth rose by a healthy 5%, the growth didn’t trickle down because low-income households grew faster than higher-income households, leaving poverty incidence largely unchanged.

Stagnant job prospects at home have led more than ten million Filipinos to leave the country and work overseas. Overseas Filipino Workers (OFWs) provide about 10% of GDP and are crucial to the economy. Many families rely upon an OFW relative to support them and many OFWs leave home for years at a time in order to provide for their families. As the population edges beyond 100 million, there will be greater pressure on the economy to produce home grown employment opportunities and reduce the reliance on OFWs. But this remains some way off for now and the prospects for many young people due to join the labour force in the next few years are not promising. Many will end up in either low-paid unskilled jobs or on the dole.

Although the absolute number of people in the population is estimated to reach 142 million by 2045, the Philippine Statistics Agency (PSA) notes that the rate of growth will decline, changing the country’s age structure and leaving the Philippine population a little greyer than it used to be. In 2010, 4.3% of the population was 65 and above. By 2025, the proportion will be 6.5%; and by 2045, it will be 11.4%. The annual population growth rate declined from an average 1.9% in 2000-2010 to 1.73% in 2010-2015.

Environmental Impact

The World Bank argues that climate change will ultimately affect about 42% of coastal populations in the country and about 14% of the total population. Rising population growth will exacerbate these environmental risk factors, particularly in the informal squatter settlements that make up 45% of the country’s urban population. With economic growth unlikely to keep up with the fertility rate, rural, coastal, and urban populations will become even more exposed to the regular natural disasters that strike the Philippines and to resource stresses that could push living standards even lower. Growth in the agriculture sector and agricultural productivity lag behind the rest of the economy. Without reform of the sector leading to improved productivity, food security will increasingly become a problem, with a real risk of rising prices due to scarcity- leaving the poorest Filipinos unable to buy food.

Comment

Traditionally, growing populations have offered countries both large risks and large opportunities. The Aquino administration pushed the landmark RH law through Congress, and over time, this will nudge the growth rate slowly downwards and should relieve some of the pressures. It will be several years before the benefits of the RH bill can be seen.

Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.