Philippines: 16th largest economy by 2050? Here’s the truth!

Ugh…if I see another news headline comparing the Philippines to some kind of animal, I might just get physically sick. “Asian Tiger Economy of the World”; “The dark horse of the region”. Speaking of being sick, at least one headline referred to the Philippines as the “healthy man of Asia” as opposed to the perennial “sick man of Asia”. But seriously, all this talk of the country’s potential is nothing new.

As stated in one of the articles, there was much optimism in the air during former President Cory Aquino’s time too and this was immediately after she was installed as the head of state following the first EDSA “People Power” revolution. Back then they referred to us as “the blooming tiger economy of Asia”. Unfortunately, investor confidence quickly fizzled out. The tiger must have turned out to be just a fat cat.

The pattern of renewed optimism can be attributed to the confidence enjoyed by every newly elected president. This was the case with former President Fidel Ramos and I’m pretty sure that after former President Gloria Arroyo was installed following the second EDSA uprising dubbed “People Power II”, the world thought the Philippines would be on the right track once more. Every new leader brings with him or her an assurance that this time around, things will be different. That is, until they actually start working and realize that they have no choice but to dance to the tune of the padrino system.

Propping up deadbeats

Luckily for the incumbent President Noynoy Aquino (PNoy), his propaganda machine in the media can keep trumpeting his so-called popularity with the people until his term ends regardless of how much a mockery he makes out of the country’s institutions and even without introducing any new economic policies. After all, the people who pushed PNoy to run for the Presidency have no choice but to keep propping him up like that lifeless character from the film Weekend at Bernie’s lest they be forced to apologize for tricking the voters into thinking that he is “The One”. But I digress…

Going back to the state of the economy, every time the topic shifts to something that deals with data, people’s eyes glaze over and boredom sets in, which is a shame because the only way to understand how the country can move forward is to look at the facts and figures. Unfortunately, only a handful of people really understand what the heck the economists are talking about. What are they talking about, really? Let’s try to analyze what the expert from CNBC had to say:

The Philippines’ “very robust and young population” presents a ready pool of talent, says Mark Matthews, Head of Research Asia at Bank Julius Baer. He expects the country’s population of 93 million, around half of whom are below 20 years old, to more than double to 190 million by 2040.

With fertility rates declining in the West and in Asian countries like Japan, Korea and China, the Philippines will increasingly become an important source of immigrant labor, he added.

While the above statement is actually bad news for advocates of the proposed Reproductive Health bill (RH bill) which seeks to curb population growth, the expert from CNBC is basically saying, however, that it is our enormous population particularly the young members of our society that can help propel our economy forward. Investors see the potential of the young as a source of skilled workers or employees in the future.

Whether they end up as employees in the country or abroad does not really matter. This is as opposed to the increasing number of elderly people in the West and other Asian countries. China might be successful in luring in foreign investors for now but everyone knows that their one child policy and Chinese couples’ preference for boys will contribute to their declining birth rate and can (if not already) create an imbalance in the sex ratio that will in turn pose a colossal challenge to their population dynamics.

Here’s the question though: do young members of the Philippine population really present a “ready pool of talent”? Not yet. They can but the problem is that before they can become skilled workers, young Filipinos need to be educated and trained first before they can be part of the pool of talent. Without the necessary education and training, they will only be good at drinking large amounts of alcohol after a day’s work as jeepney drivers or household helps. Who can educate and train the young generation? The government cannot do it without putting more into the education budget. We all know that education is the least of the government’s priorities.

“[…] And the interesting thing is 80 percent of them speak English,” Matthews said. “Most people who speak English in third world countries, they don’t want to go overseas to work in sort of manual labor. But the Filipinos have no problem doing it…and they are making three times as much as they are making back at home, and they are sending it back home.” .

Uh oh…the economic expert is praising us for our ability to speak English better than our neighbors in the ASEAN region. Unfortunately, the future generation of Filipinos might not be as fluent or well-versed in the English language because of the introduction of the “Mother Tongue-Based Multi-Lingual Education” reform program by the Department of Education (DepEd) this year. This program involves one where “any of 12 major local languages spoken in different regions of the country will be taught as a subject and used as a medium of instruction from kindergarten to Grade 3.” The 12 mother tongues for classroom use are Tagalog, Kapampangan, Pangasinense, Iloko, Bikol, Cebuano, Hiligaynon, Waray, Tausug, Maguindanaoan, Maranao, and Chabacano.

Now, that new DepEd program that will give less priority to teaching the English language is obviously not going to work well with the idea of Filipinos being more desirable as employees because of the perception that our communication skills are better than others. Somebody should call the attention of the DedEd quick so they can reverse this trend.

The Philippines is already one of the world’s biggest recipients of remittances — the fourth biggest in 2010 according to the World Bank — which account for a tenth of the country’s gross national product. According to the country’s central bank, monthly remittances hit a record high of $1.7 billion in September with total remittances for the year expected at $20 billion.

What was once just a stop-gap measure to ease unemployment and foreign exchange problems introduced in 1974, sending overseas contract workers had since become a permanent fixture. In fact, the country has become too dependent on remittances from OFWs to keep its economy afloat. How exactly do the remittances help? It is premised on the idea of “a people-centered emphasis on growing levels of consumptions and a widening middle class.” In other words, corporations are looking into the spending habits of the hard-working and mostly displaced Filipinos abroad who earn foreign currencies and who do not have a habit of saving.

But like what I said in an earlier article of mine, the remittances are also dependent on the economic conditions of the countries where Filipinos seek employment. When countries like Saudi Arabia stop accepting OFWs for one reason or another, the OFWs will have no choice but to come back home and the spending fuelled by their remittances will likewise stop and adversely affect industries across the country.

In another article of mine, I wrote that perhaps venture capitalists should keep in mind three things: 1) The earning capacity of Filipinos can be volatile. Considering OFWs do not have a habit of saving, their earning capacity will become little to nil if their luck runs out in the job market. 2) Natural resources are finite, meaning there will come a point when raw materials will become so scarce, the prices of goods will skyrocket. 3) Making money does not necessarily have to mean aggressive expansion. A lot of companies have fallen victim to overexpansion. What’s the point in opening up more branches of SM Supermalls if the people have run out of money to spend?

Anyhow, the Filipino people’s spending habits must have caught the attention of a few gambling lords as evident in what of late has been a growing interest in setting up casinos. The chairman of gambling regulator Philippine Amusement & Gaming Corp (PAGCOR), Cristino Naguiat Jr is even claiming that he is up to his eyeballs “fielding calls and booking appointments to meet possible investors in a sprawling gambling and entertainment project his government hopes will rival Las Vegas in five years.”

The Philippines as another Las Vegas? That image is not going to sit too well with the country being the biggest Catholic nation in Asia. I wonder how the Catholic bishops are feeling about this proposal. This will certainly boost employment in the entertainment industry. We can say goodbye to the family friendly image some people might have wanted the country to project. But even before the plan materializes, Naguiat, a close friend of President Noynoy Aquino, is already embroiled in controversy. Naguiat is now under investigation after he was named in a US lawsuit as among those who allegedly accepted $110,000 worth of hotel accommodations and illegal payments, courtesy of Kazuo Okada, a Japanese gambling magnate who is planning a $2-billion casino in Manila. This is a situation they describe in the Filipino vernacular as tinapay na nga, naging bato pa. Here’s to hoping that PNoy will give his buddy a bit more than just a slap on the wrist to prove to foreign investors that he means business.

A follower advised me that the hashtag “2050” was trending on Twitter the other day. I presume this has something to do with the HSBC prediction that the Philippines is set to leapfrog 27 places to become the 16th largest economy by 2050. I don’t mean to burst anyone’s bubble but I think the bank’s prediction is too optimistic. They even said it themselves: in order to achieve this, the country has to grow by “8.4 percent from 2010 to 2020, by 7.3 percent from 2020 to 2030, and by 6.6 percent from 2030 to 2040, and by 5.8 percent from 2040 to 2050.” Now that growth could mean encouraging a lot of spending and consumption just to stimulate the economy. Again, they have not taken into consideration that the supply of natural resources like crude oil, which is used in manufacturing might not meet this demand in the future.

The country’s growing population can offset any growth achieved if the majority of the population is unemployable. HSBC even echoed the same sentiments regarding the talent pool in their prediction confirming that the “growing population, which, if properly educated and trained, should help the economy generate more income over the next decades” — which could also mean that if not properly educated and remain untrained, the growing population can only help pull the economy down. Like what I’ve said before, if the country’s population keeps growing, any economic growth achieved will not mean much for the additional mouths to feed.

HSBC probably gets its perception that the current government has sound “macroeconomic fundamentals and improving governance” from members of the Philippine media allied with PNoy. The truth is, PNoy’s good governance is just smoke and mirrors. Nothing has changed since he took over from the previous government.

Tiger, dark horse or whatever animal they may want to use in describing the Philippine economy, it seems it still boils down to the people performing well as humans in order to achieve their potential. Performing well does not necessarily mean we have to multiply like rabbits just to satisfy corporations’ voracious appetite for our hard-earned cash. On the contrary, performing well means managing our population to the level where the country’s domestic resources could cater to everyone’s needs.

* * *

I got this from a member of a GRP forum:

Sometime in the past, one young, representative from Laguna sponsored a bill recommending that Filipino language be used in all levels of accounting firms and banking institutions. The congressman claimed it will provide a better understanding of the business transactions for those who are inexperienced and non-English speaking citizens.

The bill received unanimous approval from the House and was presented to the President for signature to become the law of the land. But in spite of the overwhelming pressure from the members of Congress, President Gloria Arroyo vetoed the bill.

Why? She found out that when the English “business” words are translated in Tagalog, they sound very malicious and are “nakaka-hiya at nakaka-kilabot!”

Here are a few sample words:

Asset – Ari
Fixed Asset – Nakatirik na ari
Liquid Asset – Basang ari
Solid Asset – Matigas na ari
Owned Asset – Sariling pag-aari
Other Asset – Ari ng iba
False Asset – Ari-ari-an
Miscellaneous Asset – Iba-ibang klaseng ari
Asset Write off – Pinutol na pag-aari
Depreciation of Asset – Laspag na pag-aari
Fully Depreciated Asset – Laspag na laspag na pag-aari
Earning Asset – Tumutubong pag-aari
Working Asset – Ganado pa ang ari
Non-earning Asset – Baldado na ang ari
Erroneous Entry – Mali ang pagkaka-pasok
Double Entry – Dalawang beses ipinasok
Multiple Entry – Labas pasok nang labas pasok
Correcting Entry – Itinama ang pagpasok
Reversing entry – Baligtad ang pagkakapasok
Dead Asset – Patay na ang ARI

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Post Author: Ilda

In life, things are not always what they seem.

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102 Comments on "Philippines: 16th largest economy by 2050? Here’s the truth!"

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auriga
Guest

I’ve always frowned at that “2050” thing. As opposed to the popular (and idiotic) interpretation of sucking it in and spewing out “bahala nas” for the next 38 years, I’d rather believe that we wouldn’t have to wait that long if we all got our acts together.

JC
Guest

I’ve been saying the exact same thing! Why wait for it when you can do something to get it done faster. It’s just like Juan Tamad waiting for the fruit to fall instead of picking it already.

Vincenzo B. Arellano
Guest

But its ironic that they always attack Tito Noy kht mgnda naman ang hangad nya. Tumingin muna s slamin

Daido Katsumi
Guest

IKAW mismo ang tumingin sa salamin. Kaya sya binoto ng tao because many, including you, are brainwashed by the Yellow Media.

They attack you’re false god Tito Noy because all of them are VERY TRUE. Due to his incompetence and his vendetta on his enemies, his ‘daang matuwid’ is a total farce. Am I right?

Der Fuhrer
Guest

@Nutzi Vincenzo

“They” always attack your Tito Noy because of all the evil things he continues to do. Maganda ba ang diktadura? Ikaw ang tumingin sa salamin.

iloveildadontjudgeme
Guest

GO ILDA! i love you! PAKASAL NA TAYO!

amboy24
Member

great article ms.ilda.all the articles you write are really informative.i almost spilled my coffee when reached that part where english translation of our business words are translated.it’s so funny.

Domingo Arong
Guest

Ilda

Hope you will go over this Working Paper on World Population Ageing (2009) by the Population Division of the Department of Economic and Social Affairs (DESA) of the United Nations–the third in a series, the first released in 2002 and the second in 2007:

http://www.un.org/esa/population/publications/WPA2009/WPA2009_WorkingPaper.pdf

The Paper suggests that the real concern is not about a population that is exploding, but a population that is rapidly aging (count me in!) and its impact, among others, on government pension systems and what it refers to as the “potential support ratio” worldwide.

jay
Guest

its more like animal farm with pigs in pork, monkeys who see no evil, hear no evil, speak no evil!, scorpions, snakes and chameleons and the black widow spiders
lets all go noynoying

Dean
Guest

NOOOOO!!! LOL

Der Fuhrer
Guest

Philippine Government Incorporated. A profiteering venture?

Profiteer.PhL

james_neil
Guest

Ilda i have found your articles intriguing i like they way you tell it like it is no sugar coating Im a new reader of getrealphilippines and i can say you are my favorite writer to date. keep up the good work!

james_neil
Guest

thanks for enlightening us.!

Der Fuhrer
Guest
A journey of a thousand miles starts with the first step. This is followed up by a well planned course of more steps. Hopefully leading to success. Is the Philippine economy under Mr. Aquino’s administration moving forward by leaps and bounds? What happened to its planning? A strategic economic plan must be in the works. Cabinet meetings should meet regularly to tune the economy. I have seen reality. I do not like it at all. The almost daily increase in fuel pump prices, LPG at almost a thousand pesos, rising tuition fees, rising transport fares and still rising prices of… Read more »
Joe America
Guest
Nice article. The one high-growth 2050 projection I read was from HSBC and – like the CNBC projection you cited – it predicated its conclusion on the simplistic notion that population would keep growing rapidly, so the economy would grow to match. Well, if that is all that transpires, we can be assured that this over-birthing madhouse will be the number one beggar-nation in the planet. A bigger beggar nation of sweaty laborers doing the world’s dirt work. (But NOT a “nation of servants”; no, I did NOT say “a nation of servants”.) And we can be further assured that… Read more »
Lord Chimera
Guest
That’s the translation of some of the words in English to Filipino? It’s horrifying and it’s show that some words translated in Filipino are not that pleasing to say the least. The importance of English-fluency is an important one when dealing internationally. Considering that it is the language between different nations and nationalities as well as day-to-day usage for international business, I can’t for really understand the myopic idea that we should prioritize Filipino which by the way is not used internationally. Am not saying we shouldn’t learn and use Filipino, but the thing we must remember is that our… Read more »
Joe America
Guest

Right. It depends on your overall objective. If it is to compete economically with the global players, you pick English. If it is to hang onto the pride attached to history, you pick Tagalog, which is not even the primary language for much of the Philippines. I’d opt for competitiveness over pride any day. After all, you can always hang onto the old languages if people are motivated enough to learn them. Just as Latin is an important language no one really speaks.

Trosp
Guest

This time I completely agree with you Joe.

Der Fuhrer
Guest
Whoever is making policies in the DepEd sure knows about what’s going on in the real world. I am one of the few people who do not believe in the patriotic or nationalistic value of emphasizing Pilipino as a beginner’s course. We have to face reality. Many foreign countries realize the value of learning the language of choice for knowledge, technology transfer and advancement in the real world of highly technical jobs and professions. English is the way to personal development and progress for many individuals. Some of our gifted people even learn other foreign languages. Being multi-lingual has its… Read more »
FallenAngel
Member
Say, Ilda, Aside from tiger, dark horse, hasn’t the Philippines been called a bunch of monkeys too? I know you’d rather not hear another animal comparison, but we’ve got to find something that actually fits. The HSBC prediction, and many others like it, was yet made into another excuse by lazy Filipinos to simply wait for the financial guava to fall from the tree. They’ll never understand that even by just planning for our future growth properly, a good part of the work is done. The kayod-kalabaw part becomes more bearable for us citizens if we learn to truly work… Read more »
FallenAngel
Member

And by the way Ilda, great article, as always 🙂

brokenphantom
Guest

The one who said that Philippines will be a large economy by 2050 doesn’t know the adage: “Aanuhin mo pa ang damo, kapag patay na ang kabayo?”

Seriously, Philippines might have self-destructed by 2050 if things today continue as it is.

Hyden Toro
Guest
Now we’re talking of “aris”…si Noynoy Aquino ay patay na ang “ari”. Gusto niyang pabuhay kay Grace Lee…so much for that… Our country has no economic plans. We have optimism for good future; but; optimism without any working plans are just useless hopes. Cory Aquino came; Ramos came; Estrada came; Gloria Arroyo came. We stayed in the same rut. Noynoy Aquino came. We are now digging ourselves deeper into an economic hole. OFW slaves/Drug Mule Program will never solve our economic problems. Since, people are going in foreign countries to work in low manual and menial work. Most OFWs are:… Read more »
cool ass
Guest

hahaha!…you will not believe it, that the principle of an “incandescent lamp” long obsolete in most technologically advance countries…is still being taught in Electrical engineering course in the Philippines!…

Hyden Toro
Guest

Advanced industrialized countries are now dealing with LASERs, Genetic Engineering,Trigybytes (trillion in bytes in computers), anti matter, atom colliders, etc…and we are still talking of incandescent lamps technology?
We are Wowoowee people and YellowTards, indeed…

Mike
Guest
I like your articles so much but… I’m afraid I have to disagree on your stance on the Mother Tongue project of DepEd. in fact, I am a teacher and most of my co-teachers support the Mother Tongue program and many studies have already concluded that it works and effective. now if the issue is the fluency of English, the Mother Tongue DOES NOT kill English education. it is still in the curriculum. while most people advocate an English-only education then we are committing a VERY UNCONSTITUTIONAL act. I have also a suggestion to your opposition to the Mother Tongue… Read more »
Don
Guest
All my school life was taught in English, with a subject in Tagalog masking as “Filipino”. I flunked Math a lot though. BUT… thanks to a mostly English education, more opportunities were opened to me at an earlier age. I may have flunked Math a lot, but at 8 I pretty much knew a lot about dinosaurs, at 10 I knew how an A-bomb worked, and at 12 I made my own AC/DC power adaptor. I doubt that the knowledge would have been available at the time if it wasn’t in English. I still doubt that the knowledge is available… Read more »
james_neil
Guest

Knowledge is power! the more knowledge you have the more powerful you will become. and a good command of the english language is a good start.

Hyden Toro
Guest

Our civilization is now going Global. The language of one-world civilization is English. Most of the technical terms written in technical textbooks is English…
There is nothing wrong with being Bi-Lingual, or being Multi-Lingual…anyway, you cannot eat your nationalism. Be a realist,Trust me,your nationalism will never put food on your table…

Der Fuhrer
Guest

Topic aside… A great lie is being floated by the power mad administration. They are now saying that they are not interfering in the release of pork barrel. Perceived enemies and opposition who do not abide by administration policies like Rep. Magsaysay are bypassed by the Palace and the pork “distributed” by the executive branch direct to mayors. This is confirming the creeping dictatorship. The Executive branch violated the Philippine Constitution of 1987. It cannot by its own distribute pork of a representative to mayors. There is nothing in the Constitution that allows this.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=63&articleId=788024

Der Fuhrer
Guest

Is this culpable violation of the Constitution?

jay
Guest

“Character assassination is at once easier and
surer than physical assault; and it involves far
less risk for the assassin. It leaves him free to
commit the same deed over and over again, and
may, indeed, win him the honors of a hero in
the country of his victims.”
alan barth

jay
Guest
noynoys – the origin of the species “A man who dares to waste one hour of life has not discovered the value of life” – Charles Darwin a man who wastes his life has not understood the meaning of life. noynoying – definition: “Laziness ( noynoying ) is nothing more than the habit of resting before you get tired.” Jules Renard (French Writer, 1864-1910) a day in the life of a noynoy: obsessing resting sleeping. related term : ‘caradanging’ – trying to turn a lie into a truth and/or vice versa, by using social media for spin/ black propaganda related… Read more »
Der Fuhrer
Guest
The continuing direct interference of Mr. BS Aquino in the Lower House of the Congress is seen as dictatorship. Perceived enemies of the dictator are singled out for committee removal, discipline and delayed PDAF. Executive branch arrogation of the representative’s PDAF directly to mayors is acting above and beyond the Constitution. Is the executive branch now selectively denying pork while it also distributes pork through mayors? The constituents of targeted representatives may not be equitably receiving the same. Is the executive branch now acting as a representative of the Congress? Delaying the PDAF is denying the constituents the right to… Read more »
Der Fuhrer
Guest

The House of Representatives through proper planning and apportionment of its PDAF have the capacity to improve the economy at their level. This is true. Continued interference of the executive branch will delay development, livelihood and other projects seen as conducive to building an economy. We say no to the annoying noynoy dictatorship!

Vincenzo B. Arellano
Guest

This good news all started after Gloria the most hated, fake president of the Philippines stepped down, now Tito Noy is pursuing to those corrupt people and making the economy rise again as reported by Bloomberg.

Daido Katsumi
Guest
Ummm… does Bloomberg also stated in the first place that Noynoy Aquino is BAD for the economy. Noynoy is the TRUE, fake president and he needs to step down due to his incompetence and he, just like you, loves to throw temper tantrums. At least Gloria did something during her 9 years in her term despite of the controversies against her: the 7.6% GDP rate is much better compared to the current admins’ 3.5%. Sorry, you’re telling us to be lazy bums and just wait. The ‘bahala na’ attitude is another stupidity. Man, you’re a delusional moron. Corruption is NOT… Read more »
Der Fuhrer
Guest

@Nutzi Vincenzo

Speak for yourself you black propagandist! You are saying that: “Gloria the most hated, fake president of the Philippines…” This just validates that you are painting the former president as evil and guilty before trial! The truth is your tito Noy is protecting his corrupt KKKK. He still has to show us his medium term development plan for the economy. Post your links. In other words, put up or shut up! You really are a despicable scoundrel troll. Remember you said before: “pugutin and ulo ni Gloria.” Remember? That marks you and your tito as criminals.

Anonymous
Guest

Another one of your dumbass statements eh vincenzo?
You are soooo predictable yellow dumbass.

Anonymous
Guest

“This good news all started after Gloria the most hated, fake president of the Philippines stepped down, now Tito Noy is pursuing to those corrupt people and making the economy rise again as reported by Bloomberg.”

MY REACTION TO YOUR POST:

FallenAngel
Member

post hoc fallacy again, Vincenzo?

Your Tito noy is riding on the economic gains started by Gloria. The wave is dying down yet he is still out there doing his thing, you know, noynoying

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