Comparison of Economic Well-Being, Jobs and Fertility Rate: Philippines and Thailand

In the wake of another scam called the RH Bill to be rolled out by Noynoy and his merry Tongressmen and Senatongs, I figured that it would be best to let the numbers do the talking.

RH BILL – YOU GET A “FREE CONDOM” – AND YOU ARE STILL JOBLESS AND POOR. BEATS THE SCAM OUT OF AMAN. MORONIC SOLUTIONS FOR A MORONIC PEOPLE!

The poster boy of the pro-RH is Thailand’s because allegedly, the low Total Fertility Rate (TFR) was achieved by distributing artificial contraceptives funded by the Thai government.

The conventional wisdom is that “Thailand is one of the best examples of a family-planning success story where the fertility rate has dropped from more than 6.5 births to 2.1 per woman in 25 years through the use of contraceptives. The Thai government concludes that lowering the population growth rate enhances the prosperity of the nation. Also, individuals in Thailand have realized that having fewer children enhances the prosperity of their families.”

This notion is rife with a fallacy which presumes that “correlation implies causality”. The drop in Thailand’s TFR might be caused by contraceptives – but, it is not necessarily artificial contraceptives as the pro-Rh Bill will have us believe.

GDP Per Capita Income – PHL vs THA, 1960-2010

Before I get ahead of myself, it would be best to review the data on economic well-being as indicated by the GDP per capita income. In order to ensure that we are comparing apples to apples – the GDP per capita income is expressed in constant 2000 US$. The figures were gathered from the indexmundi website.

The table below compared the GDP per capita income of the Philippines and Thailand from 1960 to 2010.

A review of GDP Per Capita (in constant 2000 US$) of PHL and Thailand will show the following:

1. Philippines GDP Per Capita was higher than Thailand’s GDP Per Capita from 1960 to 1984.

2. Philippines GDP Per Capita was lower than Thailand’s GDP Per Capita from 1985 upwards.

Note:  Philippines lost a major source of FDI – when US Parity rights expired in 1974 – but PHL GDP Per Capita was still higher than THA during the period.

For roughly the same period – 1970s to 1984 – Thailand had suffered from many economic problems – - ranging from decreasing American investment, current account deficit, a sudden rise in oil price to inflation.

3. Philippines GDP per Capita greatly reduced after EDSA ’84 – from 1984-1995 – GDP per capita was at $994 to $982 – similar to 1975 (a setback of 10 years) – PHL constitution restricted FDI to not more than 40% and embedded welfare programs in the constitution.

For the same period 1986-1997 – Thailand opened its economy – and had a boom in FDI – as Japanese FDI poured into the country

4. When the Asian Financial Crisis took place in 1997 to 2000 – Thailand pursued strict fiscal and financial policies and reduced government spending – the Philippines increased government spending

While the Philippines and Thailand both pursued subsidies – Thailand also pursued Free Trade Agreements. The Philippines however maintained its economic xenophobia and limited free trade to export processing zones only.

As of 2010, the CIA reported that Thailand’s Gini coefficient (income inequality) is 42- lower than the Philippines’ 44.

Unemployment Rate: Thailand versus Philippines

The outcome of economic policies when measured in terms of unemployment shows stark contrasts as shown in the table below.  Thailand showed lower unemployment rates even at the height of the Asian financial crisis.

In 2010, Thailand had unemployment of only 1.04% while the Philippines had 7%. As of 2012 – the Philippines still has 7% unemployment rate.

UNEMPLOYMENT RATE: THAILAND VERSUS PHILIPPINES

Total Fertility Rate: Thailand Versus Philippines

Both Thailand and Philippines had high TFRs. The gap between the TFR of both countries did not exceed 2, from 1955 to 1985 as shown in the table below.

From 1985 to 2005 the gap in the TFR of THA and PHL was greater than 2. This coincides with the period when Thailand liberalized its economy, attracted more FDI, and

The gap returned to less than 2 from 2005-2010.

The figures were gathered from the United Nations data website.

Comparison: GDP Per Capita, Unemployment, and TFR: Thailand versus Philippines

At this point, we bring all the data together and connect the dots. The table below combines the jobless rate, GDP per capita, and Total Fertility Rate of  Thailand and the Philippines.

Jobless Rate, GDP Per Capita, TFR: Philippines vs Thailand

What are the numbers telling us?

1. Philippines had higher GDP per capita and higher TFR than Thailand from 1960-1984

Despite Thailand’s spending on contraceptives in 1960s  - fact remains that PHL still had higher GDP per capita than Thailand from 1960-1984 – even if Thailand had lower TFR 

2. Philippines had lower GDP per capita and higher TFR than Thailand from 1985 to 2010 – Thailand had higher GDP per capita after it opened its economy – and Japanese FDI boomed.. leading to a more abrupt drop in TFR

3.  TFR dropped abruptly as Thailand’s unemployment dropped during the period when Thailand opened its economy and attracted more investments.

4. Philippines TFR is also decreasing – even without an RH bill.

5. The higher TFR of the Philippines is also consistent with the findings that when women have limited opportunities except to raise a family, TFR will be high. Corollary to this is the experience of the Asian tigers that when women have jobs TFR drops abruptly.

What this shows is that jobs lead to an increase in GDP per capita. Lower TFR did not lead to an increase in GDP per capita  since THA ALWAYS had lower TFR than PHL  but had lower GDP per capita before it opened its economy.

TFR and GDP per Capita

The pro-RH conventional wisdom is that lower TFR leads to higher GDP per Capita. The statement is proven falsebecause there are countries with high TFR and still have high GDP per Capita and there are countries with low TFR and have low GDP per Capita.

This means that TFR does not explain why countries have high or low GDP per capita – and is therefore irrelevant to improving the quality of life of Filipinos.

If it’s not TFR – the question becomes what other factors have an impact on GDP per capita?

There is already a lot of literature on this matter – which the pro-RH bill continue to evade. For example, a peer-reviewed study on economic freedom, per capita income, and economic growth by Sadequl Islam shows that:

Based on cross-section data, this paper explores the relationship between economic freedom and the economic performance of low, middle and high income countries.

The regression results show that there is a direct relationship between the economic freedom index and per capita income in low income countries and all countries as a whole. The evidence also indicates that there is a direct relationship between the economic freedom index and the growth rate of per capita income in high income countries and all countries as a whole.

The Japanese experience of the dearth in birth rates is even more telling, as reported by The Economist:

From the start of the Meiji period in 1868 Japan’s population rose for about 70 years. During that time Japan cast off its isolationist feudal system, opened its borders and started its headlong rush to industrialisation. Then, in the 1950s, fertility started to plummet. Since the 1980s, when the birth rate fell below 1.5 children per woman, Japan has, in effect, had a one-child policy—though, unlike in China, it was self-imposed.

***

the cost of weddings may be the least of the reasons why the Japanese are increasingly putting off marriage or avoiding it altogether. One weightier one is that employment rates among women have increased but private companies implicitly discourage mothers from returning to their old jobs.

Noynoy and the his merry Senatongs and Tongressman are clearly bent on passing an RH bill instead of opening the economy – and let jobs function as natural contraceptives.

Obviously, there is money to be made on awarding government contracts for the procurement of artificial contraceptives. That money however will not go to the pockets of the people who need it most – the jobless, the underemployed, the poor.

About the Author

BongV has written 459 stories on this site.