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IT is doubtful if President Arroyo’s vision of the
Philippines becoming a First-World country in the next two decades
will come true because local living standards and
infrastructure—which are far behind its neighbors—must first be
massively improved, the Asian Development Bank (ADB) said Tuesday.
At a press briefing Ifzal Ali,
ADB’s chief economist, told reporters that the Philippine economy
needs to grow at the same pace as China’s economy “for 25 years
in a row” to achieve President Arroyo’s goal.
“For the Philippines to achieve
First-World status, it will have to achieve growth rates of 9.5
percent that we have seen in the People’s Republic of China for 25
years in a row. Maybe then we can start thinking of the Philippines
as a First World country,” Ali said.
The Philippine economy grew at
6.4 percent, 4.9 percent and 5.4 percent over the past three years.
In the first quarter this year, the country’s gross domestic
product (GDP), a standard measure of goods and services produced by
a nation, rose 6.9 percent, a multiyear record, according to the
government.
This year the government has a
GDP target of between 6.1 percent and 6.7 percent and 6.1 percent
and 6.8 percent next year.
In its State of the Nation
address (SONA), Mrs. Arroyo promised to put the Philippines’ on
its way toward First-World status in 20 years by spending more in
infrastructure investments.
In addition, according to the
preliminary report of the ADB’s “International Comparison
Program (ICP) in Asia and the Pacific: Purchasing Power Parity
Preliminary Report,” using real GDP as the basis, the Philippines
needs more than 20 years to reach Thailand’s present per capita
GDP level if it grows only at an average annual per capita of 3.7
percent.
The country will take 77 years to
reach the level of Brunei now because it only has a per capita real
GDP of HK$16,663 (in 2005)—below the regional average of
HK$20,545.
Other Asian countries’ real GDP
per capita figures are: Malaysia HK$ 65,136; Thailand, HK$39,086;
Indonesia, HK$18,427; Vietnam, HK$12,295 and Cambodia, HK$8,269.
The per capita real GDP figures
in the top five rich countries are Brunei Darussalam, HK$269,581;
Singapore, HK$236,336; Macao, China, HK$212,617 and Taipei, China,
HK$202,941.
“Economies with high per-capita
real GDP and high per-capita real gross fixed capital formation are
the economies with the highest potential for growth,” the ADB
said.
Per-capita GDP measures divides
the sum of all economic activity produced in a country or economy by
the number of people.
ADB added that richer countries
generally invest more on a per capita basis than poorer countries,
which is partly why they are richer.
The Philippines’ per-capita
real gross fixed capital formation was HK$1,914 in 2005, way below
the regional average of HK$5,298.
Gross fixed capital formation
consists of investment in residential and other buildings, roads,
bridges, railways, electricity networks and other infrastructures
and purchases of machinery and equipment.
The ADB also said the Philippine
living standard is lagging behind neighbors in terms of per-capita
consumption expenditure with HK$6,556, China HK$5,753 and India
HK$3,486.
Five economies that topped the
list are Hong Kong, with a per-capita consumption expenditure of
HK$125,303, Singapore HK$99,706, Brunei HK$81,744 and Macau
HK$67,639.
At the bottom of the survey are
Nepal, Bangladesh, Laos, Cambodia and Vietnam.
Based on the price level index,
which is the ratio of the PPP to the exchange rate, Fiji Islands and
Hong Kong are the two costlier places to live in. They are followed
by Macau, China; Singapore and Taipei, Taiwan-China. Price levels in
the Philippines, Thailand and Indonesia are very similar and are
close to the Asian average.
ADB said it used Hong Kong dollar
as a currency base because it has a broad-based economy, its prices
are available for many products, its strong statistical system for
both prices and national accounts are well recognized in the region.
--Darwin G. Amojelar
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