OUR banking people are lamenting the fact that the Philippines, among many countries, has one of the lowest percentages of people making use of the services of the banking sector. Earlier, in the Southeast Asian Games, we were saddened by the fact we won less gold medals than six comembers of the Association of Southeast Asian Nations. In the Human Development Index (HDI), we are steady in our place at about the middle of some 170 rated countries.
There are reasons for these phenomena. In banking, the people either had no money to deposit in the banks or were too illiterate to understand the banking sector’s requirements. In sports, our athletes did not have enough material support from the government or their communities. Our HDI ranking is what it is simply because our gross enrollment ratios and life spans are lower or higher than those of some of our neighbors.
As clear as these explanations are, they are not the best explanation of why things are as they are. The single best indicator of our rank relative to those of our neighbors is gross domestic product (GDP) per capita, that is, the value of economic output per person. In 2013 it was $2,765.50 for the Philippines, $3,475.3 for Indonesia, $5,779.0 for Thailand, $10,538.1 for Malaysia and $55,182.5 for Singapore. For latecomer Vietnam, it was $1,910.5.
Why is GDP per person the best indicator of achievement in the various fields of human endeavor? Because it has a positive relationship with just about everything else in life that is “good” or desirable.
For example, the higher the income of a person, the more he or she is likely to be better nourished, better educated and healthier. On the other hand, the lower the income, the more likely is he or she to be suffering from hunger, poor health, illiteracy, etc. Sometimes a poor man’s son or daughter will top the graduating class, but this is the exception rather than the rule. Have you seen a zombie winning the 100-meter dash or a scavenger depositing money in a bank?
What is the significance of this? It is that, to improve our standing in any field of human endeavor, we must concentrate our attention and energy on two “variables,” the economy and the population. Let us raise the growth rate of our GDP to, say, 8 percent to 10 percent per year, from the current 5 percent to 6 percent per year, by increasing our investment rate and raising the productivity of our workers. Let us moderate the growth rate of our population from the current 2 percent per annum, one of the highest in the world, to, say, 1 percent to 1.5 percent per annum. This will mean doubling our GDP per capita every eight years to nine years, rather than 12 years to 14 years.
These changes will improve our chances, not just of beating the competition in sports, raising the percentage of our population making use of banking services, and improving our HDI ranking, but of achieving many other things of importance to our status as human beings.
Image credits: Jimbo Albano
2 comments
Too many of us Filipinos sharing the economic pie, that’s why.
“Improve the economy and temper the population growth rate.” Presently, the economy’s biggest obstacle, corruption, is slowly being pushed back. For continuity, the next top leaders of the country should continue with what has been started by PNoy. The tempering of the population growth stand to benefit from the passage of RH law. The government should go all out in carrying out the intents of the law. The sine qua non in all this is the full education of the masses. Education that is on par with the best in the world. Education will eradicate poverty. The government should recognize this as its top priority.