The Philippines is lagging behind most of the other founding members of the Association of Southeast Asian Nations in many economic and development indicators and, without sufficient improvement, it may be overtaken by the newer, less developed neighbors.
A report of the OECD Development Center suggests this possibility, considering ongoing Asean efforts to bridge the development gap within the region and to enable poorer members to catch up.
Founding members of the grouping are the Philippines, Indonesia, Malaysia, Thailand and Singapore. The Philippines, based on the report, also lagged behind newer member Brunei, which joined the group in the 1980s.
The newer members of the Asean, which was formed in 1967, are Cambodia, Laos, Myanmar and Vietnam—all of which signed up in the 1990s.
Kensuke Tanaka, head of the Asia desk of the OECD think tank, said in a lecture delivered in Jakarta last week that among the five founders, the Philippines ranked fourth in terms of labor productivity.
The OECD-DC’s “Southeast Asian Economic Outlook 2013” report showed that a Filipino worker accounted for $10,000 worth of products valued in 2009 prices. This is barely above Indonesia’s level and below the Asean average.
Tanaka also noted that poverty incidence in the Philippines was the highest among the five with almost a quarter of the population living below the poverty threshold. This was almost the same as that in Indonesia.
Further, Tanaka cited the World Bank’s latest Doing Business report which showed the Philippines ranking 136th in the world in terms of ease in doing business. This is the lowest among Asean founding members and just two notches from Cambodia’s 138th.
Also, according to the Asean Secretariat’s Asean Integration Monitoring Office, the Philippines has the lowest gross domestic product per capita among the six oldest Asean members, including Brunei. Each Filipino accounts for $2,300 a year, which is less than a quarter of the world average of $10,000.
The OECD think tank has projected that in the next five years or until 2017, the Philippines’ real GDP growth will be 5.5 percent yearly, which would be at par with the figure for the entire Asean.
However, the four less developed members are expected to surpass this level with Vietnam seen growing by 5.6 percent; Burma, 6.3 percent; Cambodia, 6.9 percent and Laos, 7.4 percent.
The OECD-DC’s outlook report said the Philippines’ medium-term development plan faced the challenge of the need to improve road and power infrastructure, access to and quality of education and ensure jobs for all job seekers.