Tony Lopez wrote a piece for the Manila Times recently, which I requote below. On first read you’ll realize that the title “The Philippines Is Not That Poor” is misleading because this isn’t what Lopez is talking about, but more of: “Filipinos Are Still Happy Despite Being Poor”.
Add to this is his bewildering misuse of context (e.g. Filipinos texting, American bankrupcy) and his mixing of per capita and total GDP statistics to give the article some weight.
No doubt this “feel-good” article about poverty was written with the best of intentions, but I cannot fully shake the feeling that the writer was being intellectually dishonest about it.
Judge for yourself:
By Tony Lopez
The Philippines is not that poor
I was a reactor the other day to the Jaime V. Ongpin Memorial Lecture of poverty expert Dr. Arsenio Balicasan at the Ateneo at Rockwell. Here is the first part of my reaction:
The statistics and the analyses on poverty incidence in the Philippines are distressing. They will make you grab the nearest paltik and shoot the politician next to you.
My contention, however, is that the Philippines is not that poor. The Pinoy is not that poor. And yes, we need the politicians. Just look at how that priest in Pampanga is running the local government.
Why do I say the Philippines is not that poor? Let me cite some data:
1. The Philippines is a large country and a large economy. The population is 92 million, the 12th largest in the world. Only China, India, the US, Indonesia, Brazil, Pakistan, Bangladesh, Russian Federation, Nigeria, Japan and Mexico are bigger.
We are the same size as Vietnam. We are bigger than Germany 82.7 million, Thailand 65.3 million, France 60.9 million, the UK 60 million, Italy 58.2 million, Korea 48 million, Spain 43.6 million and Argentina 39.5 million.
The Philippine gross domestic product (GDP) in purchasing power parity is worth $327 billion, according to the World Bank 2008 World Development Report and $319 billion, according to the IMF World Economic Outlook October 2008. That makes it the 36th largest economy in the world, out of 200 countries. The Philippines is the ninth largest economy in Asia.
We are bigger than Hong Kong, Norway, Chile, Portugal, Singapore, Vietnam, Ireland, UAE, Kuwait, and New Zealand. Switzerland, home to the largest hoard of hidden wealth in the world, is just slightly bigger.
In the whole of Asia, only eight other countries are bigger than the Philippines in GDP PPP – China, Japan, India, Korea, Indonesia, Taiwan, Thailand and Malaysia,
2. As a domestic market, the World Economic Forum classifies the Philippines as the 33rd largest market in the world. Domestic market here means GDP plus value of imports of goods and services minus exports. RP is bigger than Austria, Malaysia, Switzerland, Hong Kong, Portugal, Vietnam, Chile, Hungary and yes, Singapore.
In October this year, the IMF classified the Philippines as a newly industrialized country with estimated its nominal GDP per capita at $1,908.
Per capita, the Gross National Income, per World Bank 2007 data, is $1,620, 50 percent more than Vietnam’s $790. Even in per capita PPP terms, we are richer than the Vietnamese—$3,730 vs. $2,550, a difference of $1,180 or 46 percent. Of course, we could have been far richer if we had grown as fast as Vietnam.
In the eight years from 2000 to 2007, the Philippine average GDP growth was 5.14 percent. That of Vietnam was 7.63 percent, 48 percent faster. But who is happier—the Filipino or the Vietnamese?
3. The Philippines has ten million expatriate workers, the so-called overseas Filipino workers (OFW). There are 16 million families in the Philippines. That means 63 percent of total households in the country have an OFW. Two of every three families.
This year, the 10 million overseas Filipino workers will remit $18 billion. That’s an average remittance of $1,800 per worker. Divide that by 5.5—the average of Filipino family size and you get $327.27 additional per capita income. Add that to the domestic $1,620 per capita income and you get a per capita income figure closer to $2,000. In other words, one can conclude that 10 million households—two of every three—are middle class.
Compare that to the ten million households in America who are technically bankrupt because their homes have less value than the loans borrowed with which to buy them.
4. The Philippines is unique as a poor country. Filipinos spend more for e-loading and texting than for their milk, coffee, patis and even Jollibee. Is that the behavior of poverty-stricken people?
The Filipino farmer is productive only half of the time. He has plenty of spare time. He uses that to drink gin or beer with his barkada, make bets at the cockpit, and make love. He breathes fresh air, eats his wife’s cooking and listens to the latest two-bit political commentator on the radio. His wife, meanwhile, watches the latest telenovela.
Is he happy? Yes. Is he poor? Yes.