Population and Poverty: The Real Score*

Executive Summary

The public debate on the population issue – long settled in most of the developing world
– remains unresolved in the Philippines. We aim in this paper to contribute to the debate,
in particular to highlight the role the government must play to face up to this
development challenge.

On one extreme, there are those who say that there is no population problem and,
hence, that there is nothing the government needs to do about it. On the other, some view
population growth as the principal cause of poverty that would justify the government
resorting to draconian and coercive measures to deal with the problem (e.g., denial of
basic services and subsidies to families with more than two children).

We consider these extreme views and arrive at what we think is a balanced, more
reasoned and, hopefully, more widely acceptable position. Our review of the extensive
literature and our analysis of relevant empirical data lead us to the following key
messages:

• Poverty is a complex phenomenon, and many factors are responsible for it.
Rapid population growth alone cannot explain poverty. Bad governance, high
wealth and income inequality and weak economic growth are the main causes.
But rapid population growth and high fertility rates, especially among the
poor, do exacerbate poverty and make it harder for the government to address
it. The government’s target of reducing poverty incidence to 20% or lower by
2010 would not be feasible, given historical growth rates of population and
the economy.

• Time and again, Filipino women across all socioeconomic classes have
expressed their desire for fewer children. But many, particularly the poor and
the less educated among them, have more children than they want and are
unable to achieve their desired number of children. Moreover, an
overwhelming majority of Filipinos have affirmed the importance of the
ability to plan one’s family or control one’s fertility, and believe that rapid
population growth impedes the country’s development.

*
By: Ruperto P. Alonzo, Arsenio M. Balisacan, Dante B. Canlas, Joseph J. Capuno, Ramon L.
Clarete, Rolando A. Danao, Emmanuel S. de Dios, Benjamin E. Diokno, Emmanuel F. Esguerra,
Raul V. Fabella, Ma. Socorro Gochoco-Bautista, Aleli P. Kraft, Felipe M. Medalla, Nimfa F.
Mendoza, Solita C. Monsod, Cayetano W. Paderanga, Ernesto M. Pernia, Stella A. Quimbo,
Gerardo P. Sicat, Orville C. Solon, Edita A. Tan, Gwendolyn R. Tecson. U.P. School of
Economics, December 2004.
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• An unequivocal and coherent national population policy – backed by an

adequately funded family planning program that provides accurate
information and enables access to methods of contraception of choice – is pro-
poor, pro-women, pro-people, and pro-life. Any government that cares about
the poor cannot be blind to the fact that many of them have no access to
effective family planning services.

• Good population policy and programs are not costly and, based on the results
of surveys, are likely to be widely welcomed. But political will and
commitment are needed to make them effective.

• The threat of the so-called “demographic winter” (birth dearth, aging, etc.) for
the Philippines is greatly exaggerated, and using it as an argument against a
sensible population policy is a plain and simple scare tactic.

What macro data show

Population growth in the Philippines declined slowly from 3.0% per annum in the early
1970s to 2.5% in the mid-1980s, then leveling to 2.36% in the 1990s and remaining at
this rate today. By comparison, Thailand’s and Indonesia’s population growth rates,
which were similar to the Philippines’ in the early 1970s, are down to 1.4% and 1.5%,
respectively. Likewise, while Thailand’s poverty incidence is down to 9.8% and
Indonesia’s to 18.2%, the Philippines’ poverty incidence remains high at 33%.

These comparisons are instructive in understanding the links between governance,

population policy, and poverty. Thailand is arguably the best among the three countries
on all three counts, suggesting that good population policy combined with good
governance results in rapid economic growth and poverty reduction. Meanwhile, the
experience of Indonesia, where governance and corruption ratings are worse than those of
the Philippines, suggests that good population policy by itself can contribute to
significant poverty reduction. In short, population policy does matter.

What household data reveal

The Philippines’ total fertility rate (TFR or the number of births a woman would have on
average at the end of her reproductive years) declined from 6.0 in 1973 to 4.1 in 1993,
and more slowly to 3.5 in 2003. By comparison, Thailand’s and Indonesia’s TFRs,
starting at about the same level in the early 1970s as the Philippines’, are currently 1.7
and 2.6, respectively.

Again, this is instructive. Contrary to claims that significant fertility declines can
happen only in countries at high income levels, Indonesia with lower per capita income
and lower literacy rate was, in fact, able to reduce fertility faster than the Philippines. The
same can be said of Bangladesh, Sri Lanka, and India’s Kerala state.
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There is a close association between poverty incidence and family size, as borne
out consistently by data over time. For example, data for 2000 show that poverty
incidence rises monotonically from 9.8% for family size of one to 57.3% for family size
of 9+. Moreover, poverty incidence declined the slowest for family size 9+, from 59.9%
in 1985 to 57.3% in 2000 compared with 19% to 9.8% for family size 1. Further, family
size is directly related to the vulnerability to poverty or the likelihood of falling into
poverty owing to exogenous shocks (e.g., typhoons, droughts, and price increases).

As expected, mean per capita income, expenditure and savings fall monotonically
as family size increases. Likewise, mean education spending per student drops from
P5,558 for family size 1 to P682 for family size 9+, and average health spending per
capita falls from P1,700 to P150 over that family size range.

National government expenditure on social services per capita has fallen sharply
in real terms from P2,487 in 1997 to P1,999 in 2004. For education the decline has been
from P1,789 to P1,415, and for health from P266 to P141 over the same period. More
specifically for education, annual real spending per student in public elementary and
secondary schools has dropped precipitously from P8,439 to P6,554, with negative
annual average growth rate, over that seven-year interval.

The prevalence of child labor rises, and school attendance falls, with the
number of children in the family. Moreover, the odds of a child becoming underweight
and stunted are greater if he/she belongs to a household with 5 or more members (FNRI
1998). This partly explains why poverty tends to be transmitted and perpetuated from one
generation to the next.

The average TFR masks the wide variance across wealth (or asset) groups: 5.9
children for the bottom quintile, 3.5 for the middle quintile, and 2.0 for the top quintile
Likewise, wanted fertility declines monotonically from the bottom to the top asset class:
3.8 for the bottom quintile, 2.6 for the middle, and 1.7 for the top. The large gap between
actual and unwanted fertility among poor households (2.1 bottom quintile versus 0.9
middle and 0.3 top) suggests that family size adversely impacts on their living standards.
As expected, the actual-wanted fertility gaps are also evident by education level and
urban/rural location.

Behind this gap is high unmet need for family planning services: 26.7% bottom
quintile versus 15% middle and 12.4% top. Hence, low contraceptive use or
contraceptive prevalence rate (CPR) (any method): 37.4% bottom versus 52.7% middle,
and CPR (modern method) of 23.8% versus 35.7%. Poor households mostly depend on
public sources of modern family planning methods (88% versus 74% among the middle
quintile).

Higher-order pregnancies are more likely to be unwanted and, as would be

expected, unwanted pregnancies often result in abortions. Indeed, 70% of unwanted
pregnancies are aborted intentionally, accounting for a large part of about 400,000
abortions yearly (estimated in 1994 and must have risen over time).
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What people say

The latest survey carried out by Pulse Asia (February 2004) shows that people’s views on
family planning have not changed much over time since previous surveys. Virtually all
Filipinos nationwide and across the broad regions affirm the importance of the ability to
control’s one’s fertility or plan one’s family. Moreover, 7 out of 10 Filipinos believe that
rapid population growth impedes the country’s development. Further, a vast majority
(82%) are of the opinion that candidates favoring family planning should be supported
rather than rejected in elections.

Is the government’s poverty goal achievable?

The government aims for a poverty incidence of below 20% in 2010 from about 33%
currently. Is this goal achievable? Estimating a simple functional relationship shows that
a GDP per capita growth rate of 1% is associated with drop in poverty incidence of
0.95%. This suggests that a poverty incidence of 20% by 2010 would require a GDP per
capita growth of at least 3% per annum.

Such economic growth rate is significantly higher than the Philippines’ historical
average since the early 1980s and even higher than the more recent average of at most
1.8% from the mid-1990s to the present. This suggests that even for more modest
reductions in poverty than the government’s objective, it’s not realistic to rely on
economic growth (already severely constrained by fiscal deficits) while benignly
neglecting the population issue.

The government does aim for a population growth rate of 1.9% by 2010.
However, this target is simply not feasible with the government’s current stance on the
population front. To achieve such a target, contraceptive use – now at 49% (any method)
– would have to increase by 0.48% yearly and would require a drastic shift in
contraceptive method mix from predominantly traditional to predominantly modern,
costing P1.25 billion per annum. The amount is actually just a sliver of the Internal
Revenue Allotment (IRA) or of the Priority Development Assistance Fund (PDAF or
pork barrel). But will our political leaders spare such precious tiny slice?

Why the need for population policy?

The rationale for an active public policy on population essentially stems from three
considerations: (a) externalities, (b) imperfect information, and (c) poverty reduction.

First, externalities refer to costs imposed or benefits conferred on other people

outside private contracts and the market place. They are often associated with the
environmental effects of economic activities and of population, such as congestion,
environmental degradation and resource depletion (“the tragedy of the commons”). But in
developing countries like the Philippines which obligate the state to help the poor,
population growth also generates externalities of a fiscal character: the greater the
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number of poor people, the higher the taxes that the non-poor must pay in order to
prevent the quality of education, health, infrastructure and basic services from
deteriorating. With weak tax administration, high population growth means that poverty
will be perpetuated.

Second, information about and access to family planning services are inadequate.
Low-income or less educated couples are often ill-informed about the health risks to both
mothers and children of many and closely-spaced births. And even those who are
sufficiently informed about the advantages of family planning may not know how to
operationalize the information they have or often do not have access to suitable services.
In which case, the government must provide the needed information and access.

Third, the large gap between wanted and actual fertility, the high unmet need for
contraception, and the low contraceptive use particularly among the poor constitute
cogent justifications for the government’s provision of effective family planning services.
Further, there is a compelling case for the provision of free services to the poor.
Population policy should be an integral component of a poverty reduction strategy.

From the above, the need for a coherent population policy is obvious. There is,
however, the deep-seated opposition to such a policy from some religious groups. The
Catholic Church’s official position allows natural family planning (NFP) as the only
method in the exercise of responsible parenthood. However, NFP as practiced has not
been an effective method for family planning and for slowing the country’s population
growth. For many poor and less educated couples, in particular, learning and adopting
NFP is too complicated and cumbersome and requires extraordinary discipline. A more
humane stance would tolerate the use of modern and more effective methods of family
planning, besides NFP, provided they do not result in abortion. “This moral position is
also pro-life, in the sense of pro-quality-life. Each life brought into this world deserves to
be raised in a dignified, human way that the parents are capable of, according to God’s
design, and not left to a ‘bahala-na’ attitude” (Tanseco 2004, p. 16).

Perhaps it is time, therefore, that the Catholic Church hierarchy and other
religious groups listened to the people and took a more tolerant and humane position on
the need for a state-supported population policy backed by a responsive family planning
program. This type of mutual understanding has happened after all in other countries,
including many where Catholics predominate. A more tolerant stance on the part of the
Church would be in keeping with the Second Vatican Council’s teaching that the final
arbiter of moral decision is one’s informed and responsible conscience.

“The Catholic Church, as is well known, is opposed to contraception, but not to

family planning. The Second Vatican Council insists that parents-and parents alone-
should decide on the number of children whom they will bring into the world, and that
they should do so in view of the good of the family and of the society in which they live
("The Church in the Modern World" No. 50). It also recognizes the right and obligation
of individuals to follow their consciences. Thus, it should be possible for responsible
elements in the Church and the state, and other religious groups as well, to ignore the
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extremists on both sides, to end the cold war that has been going on for too long, and to
work out a modus vivendi for the good of the Filipino people” (Carroll 2004, p. A15).

Why must population policy be national in scope?

The national government’s current approach of leaving the adoption of population policy
and implementation of family planning programs to local government units (LGUs) is ill-
advised and is doomed to fail. It represents poor governance, to begin with.

In the first place, local government leaders typically wait for signals or directives
from the national leadership in terms of policy objectives and instruments. In other
words, if national leaders don’t care, why should they? Even worse, controlling
population growth at the local level is incentive-incompatible with internal revenue
allotments, which increase with population size, as well as with politicians’ electoral
chances. Indeed, there are only a handful of LGU executives who take the population
issue seriously.

Second, there are negative spillovers involved, since LGU boundaries are not
closed and population is mobile across these boundaries. Thus, a town or province with
successful population management, good economic performance, and adequate
infrastructure and social services would find itself swamped with migrants from poorly
performing towns or provinces. This is a case where success breeds its own failure.

Finally, population policy cannot be local in scale or scope because varying fiscal
resources and technical capabilities among LGUs militate against its success and
consistent application.

For these reasons, the national government cannot simply shift this important
responsibility to LGUs. It must assume leadership in coming up with an unequivocal and
coherent national population policy, backed by adequately funded family planning
programs that provide accurate information and enable easy access to all methods of
choice, especially for the poor. Then, it should enjoin all LGUs to implement effective
programs in the field.

What are the elements of an effective population policy?

The sources of future population growth and their respective contributions are: unwanted
fertility – 16%; desired family size – 19%; and population momentum – 65%. This
suggests that the key objectives and instruments of an effective population policy are:

• First is to reduce unwanted fertility (or to meet unmet needs for contraception)
through a strong national family planning program, i.e., one that allows a
choice among both traditional (“natural”) and modern (“artificial”) methods of
contraception. Family planning services, comprising information and
contraceptive means, should be made readily available to low-income couples
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who want such services. Lack of education and low incomes should not be
barriers to availing of quality family planning services.

• Second, raising the quality of basic education, reducing infant mortality,

fostering women’s empowerment, and increasing employment opportunities
for women are desirable goals in themselves. In time, as the empirical
evidence suggests, the effect of these changes should contribute to a smaller
desired family size and reinforce the downward trend in fertility and
population growth, resulting in a virtuous circle.

• Third, women’s empowerment and job opportunities are also likely to result in
later childbearing and wider birth spacing that slow population momentum.
Slowing population momentum, like the first and second objectives, also
requires fully responsive and effective family planning programs.

These measures are mutually reinforcing and, if backed by appropriate policy

reforms in the economic and other social sectors, would bring about the best results.

What about the prospect of a “demographic winter”?

The prospect of a so-called “demographic winter” – birth dearth, aging, etc. – while
occurring in varying degrees in highly advanced countries, is as distant as about 100
years from today for the Philippines. Projections indicate that, if TFR continues to
decline by 0.2 children every five years, replacement fertility of 2.1 children per woman
would be reached only by 2040. However, the effects of population momentum would
persist for another 60 years before population ceases to grow, by which time the
Philippines’ total population would be 240 million. For example, Thailand’s population,
which has reached below-replacement fertility for some time, continues to grow owing to
population momentum.

Therefore, much of the talk of a demographic winter is greatly exaggerated and

can only be regarded as a plain and simple scare tactic to instill fear in people’s minds. It
appears to be peddled by people who are simply unaware of population dynamics or,
worse, who intend to mislead.

Conclusion

Rapid population growth is a critical national concern. It impedes economic growth,

worsens inequality, and exacerbates poverty.

A sound population policy must be part of good governance to promote faster

economic growth, lower inequality, and hasten poverty reduction. A national population
policy, at the core of which are well-funded family planning programs that provide
accurate information and access to all methods of contraception, is pro-poor, pro-women,
pro-people, and pro-life.
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The responsibility for formulating, financing and implementing a population

policy cannot be left entirely to local governments because of spillover effects and
incentive incompatibilities. The national government must take the lead.

The country would benefit if Church and State were to arrive at an entente on this
critical issue – an understanding on the need for a sound national population policy – as
has long happened in other countries.

A “demographic winter” is not in the cards – not in the next 100 years, anyway.

Ultimately, the majority of Filipino women across all socioeconomic classes have
spoken: they want fewer children. And Filipinos in general have affirmed the importance
of addressing the population issue. Good governance requires that the government listen
to the people’s voice.

Salus populi suprema lex – the welfare of the people is the supreme law.