Thursday, 16 April 2009

Philippines sees value of population growth

Cai U. Ordinario
Business Mirror

The National Economic and Development Authority (Neda) said the country’s estimated 92.23 million population may still prove to be a blessing especially at this time of crisis, when global trade has collapsed and countries struggle to keep their economies afloat.

Socioeconomic Planning Secretary and Neda Director General Ralph Recto told reporters on Wednesday that four countries are seen to post a positive growth this year despite the global recession—China, India, Indonesia and the Philippines. He noted the common factor among these countries: a high population.

The United Nations population division estimates that China’s population may reach 1.354 billion by 2010; India, 1.214 billion; Indonesia, 232.517 million; and the Philippines, 93.617 million.

“There’s a report of four countries that will experience growth this year [while] many others could be contracting. What’s the common denominator? Big economies [that have] big local markets [like] China, India, the Philippines, and Indonesia,” Recto said. “[All] I’m saying [is] there’s value [in] having a big domestic market.”
Recto said the average consumption growth in the Philippines from 1995 to 2008 is around 5 percent. This has helped drive the economy through various crises, during the period and will continue playing a key role in the global crisis, since personal consumption accounts for 70 percent of gross domestic product (GDP).

He said high domestic demand in the Philippines as well as in the other four countries will enable the economy to still post positive growth despite contraction in exports and a significant decrease in other macroeconomic indicators. The socioeconomic planning secretary said with this, the Philippines should also be increasing its trade relations with the other three countries, especially China—with the highest population in the world and the biggest economy in the region.
Recto said by trading and improving relations with the country’s richest neighbor, the Philippines can also improve its economy and recover from the crisis. The higher the growth posted by the country, the more jobs created and higher domestic consumption, he said.

However, the Neda chief said having high domestic demand is the reason there is a need to watch unemployment increase and remittance growth figures, since any drop in these two figures could mean a weakening in domestic demand.

Recto said it is with this anticipation that the Neda has proposed a downward revision of the country’s macroeconomic targets. The Neda sees gross domestic product (GDP) growth to be within the range of 3.1 percent to 4.1 percent in 2009 and 4.6 percent to 5.5 percent in 2010.

The official government estimates agreed by the Development Budget and Coordination Committee (DBCC) is a GDP growth range of 3.7 percent to 4.4 percent in 2009 and 4.9 percent to 5.8 percent in 2010.

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