NEDA chief: Population boom stunts PH growth

By Ryan Chua, ABS-CBN News

Posted at Aug 06 2012 03:10 PM | Updated as of Aug 06 2012 11:10 PM

MANILA, Philippines - The Philippines' rapid population growth is preventing the economy from taking off, the country's chief economic planner told lawmakers.

Secretary Arsenio Balisacan, director-general of the National Economic Development Authority (NEDA), told senators on Monday that the Philippines has been lagging behind its neighbors like Vietnam in terms of economic growth.

He said the Philippine economy grew only by 4.7 percent over the past 10 years because of a 2-percent yearly population growth rate. Unlike in other Asian countries, the Philippines also has more dependents than members of the labor force, he added.

"If you look at the East Asian experience ... during the last 20 years, a big part of the increase of per capita income comes from the fact that population growth patterns shifted from high dependency rate to lower dependency rate," Balisacan said during a Senate briefing on the proposed 2013 national budget.

He said the Philippines needs to have the same "demographic shift."

"Clearly, rapid population growth constrains our ability to move to a higher long-term growth," Balisacan, a former dean of the UP School of Economics, told reporters after the hearing.

"What we would really want to see is that we break away from that high dependence or high contribution of our young-age population in the total population," he added. He said that in the future,  this would lead to a faster increase in the labor force, and contribute to greater economic growth.

Balisacan did not give a categorical answer when asked if he supports the reproductive health (RH) bill, a proposed law that is seen to address the population problem.

However, he cited the bill's advantages.

"The intention of the bill is really to provide opportunities for the poor people to manage their own family size and to be able to provide their children with better education through health and education investment," he said.

During Monday's hearing, some senators challenged Balisacan's claim on population and economic growth.

Senate President Juan Ponce Enrile, an opponent of the RH bill, believes more foreign investments can lead to a better economy.

"For me, these are the most important ingredients of growth in any country. It's not population," he said.  "All the prosperous countries, they didn't grow by themselves. They grew because of massive investments."

Enrile is pushing for Charter change to amend the Constitution's economic provisions and open the country to more foreign investments.

Meanwhile, Sen. Ralph Recto, a former NEDA chief, said inflation--the rise of prices related to an increase in the volume of money--is another factor to consider in measuring economic growth.

"If we have not grown as much as we should, there are many other issues and not just the population," he said.

According to Bangko Sentral ng Pilipinas Governor Amando Tetangco, the country's inflation has been going down. He said it was only 3 percent during the first half of the year, and is expected to rise only up to 4 percent in the next few years.