Top 10 projections for Asian economies

* This is my article in BusinessWorld last January 12, 2017.


Taking off from the paper by a friend and fellow columnist Romy Bernardo’s “Wishes for the economy in 2017” last Monday, this paper will make some raw projections of GDP size until 2026.

The base document is the IMF’s World Economic Outlook (WEO), October 2016 database. In the table below, GDP size is based on purchasing power parity (PPP) values, not nominal or current values. Actual data for 2006, 2016, and 2021 are IMF projections.

Now this paper will take a longer but very raw view by projecting potential GDP size by 2026. Here is the raw and crude methodology.

(a) Take the GDP multiple or expansion from 2026 to 2021 per country, call it Y.

(b) Assume that the same degree of expansion will occur from 2021 to 2026.

(c) GDP 2026 = GDP 2021 x (1 x Y).

Readers with more advanced data and econometric tools will scoff at this raw methodology but please understand that this is just an attempt and the limitations of the assumption have been stated. So here is what we can project in the next few years.

From this table, we can summarize important projections for selected Asian economies.

  1. In 2016, four Asian countries would remain in the 10 largest economies in the world: China, India, Japan, and Indonesia.
  1. Six of the 10 ASEAN countries would belong to the Top 40 largest economies in the world in 2016: Indonesia, Thailand, Malaysia, Philippines, Vietnam and Singapore.
  1. By 2021, Indonesia will overtake Brazil in the seventh spot and will be in a striking distance to dislodge Russia in the sixth spot.
  1. Also by 2021, the Philippines will rise to the 26th spot and Malaysia will rise to the 27th spot, overtaking Argentina and Netherlands. Malaysia and the Philippines will also belong to the club of trillion-dollar economies by around 2018 or 2019.
  1. Vietnam will rise from its 36th spot in 2016 to 33rd or 32nd in 2021, overtaking UA Emirates, Algeria, and Iraq, and possibly South Africa.
  1. By 2026, assuming that the raw projections will somehow hold, the combined size of China and India will be larger than the combined economies of US, Japan, Germany, Russia, Brazil, UK, France, Mexico, and Italy.
  1. Also by 2026, Indonesia will become the 5th largest economy in the world, overtaking Japan, Germany, Russia, and Brazil.
  1. And the Philippines will rise to the 22nd spot, further overtaking Taiwan, Nigeria, and Poland. It will also be in a striking distance to overtake Thailand and Australia by then.
  1. Pakistan and Vietnam, also having big and young population like India, Indonesia, and Philippines, will also significantly expand their economic sizes and improve their ranking.
  1. While Japan is expanding marginally, South Korea will sustain its growth. Now, a collapse of North Korea (possible within the next six to eight years) and unification of the two Koreas will possibly make them overtake France in the #10 spot.


Many things will happen in the coming years so those IMF projections for 2021 and the assumptions made in this paper for 2026 can be considered as suggestions with some material basis. We still take actual numbers as they become available as basis for policy reforms.


Other Asian governments should take lessons from the experience of Europe and Japan: an ageing population will be a drag in further economic expansion. Policies that control population or heavily restrict migration are wrong, as wrong as trade protectionism, heavy taxation, and stifling business regulations. Governments should avoid these policies.


Disruptions in Asia and the world

Below are some slides given by Suraj Moraje, Managing Partner of McKinsey and Co. Manila, “No Ordinary Disruption”, during the BWorld ASEAN Regional Forum last November 24, 2016 at Conrad Hotel, The commentaries are mine, not Suraj’s.

My first and last visit to Shenzhen, China was in 1998. There were many tall buildings already, roads are wide, but not as many as shown in the photo below.


Good comparison by Suraj here. ASEAN economies are modernizing and urbanizing fast while keeping their average population young. Modern technology will quicken the pace of productivity improvement of these young ASEAN people. It is really global enterprise competition and their endless innovation that modernize things faster, that results in mass production of many things, not so much due to government programs.


Big, young population. Many countries and blocs of countries like the EU salivate at this big advantage of the ASEAN. Big but ageing population means two requirements — more migrant workers (from Asia), and/or more robots. But robots cannot change adult or baby diapers with warmth and smiles. This is also one reason why I never supported the PH state-sponsored population control aka RH law. Using taxpayers money and government agencies to “suggest” to people that big population is wrong.


On the technology aspect, I find these slides by Suraj very enlightening. But despite the “labor displacing” image of modern technology (self-driving cars, trucks, mechanized construction, etc.), I believe otherwise. I think that more modern technology will mean more jobs — people who will manufacture, assemble, repair, upgrade those machines, engines and robots. All machines and bots will get “sick” and they will require people to fix them, upgrade or dispose and replace them.


One slide and arguments presented by Suraj that I don’t agree with, the latter slide. Inequality is not a problem, poverty is. More inequality due to endless innovation and competition actually pulls up hundreds of millions of people out of poverty. Poor people who used to ride cows, carabaos and bicycles to work now ride motorcycles, e-bikes, 2nd-hand cars, or air-con vans and buses. They move faster, do multi-tasking and accomplish more things, so their income and network increases.


Thanks for those wonderful insights and information, Suraj. One more reason why BWorld fora are indeed very enlightening and highly educational.

The role of liberal reforms and big population in growth momentum

* This is my article in BusinessWorld last October 27, 2016.


Several issues preoccupy President Rodrigo Duterte’s mind and mouth: the violent anti-drug campaign and murders, his anti-US, anti-EU, and anti-UN expletives and polemics (but later reversing his earlier attacks against these countries and/or multilateral bodies).

After his anti-Obama, anti-US tantrums before and during the ASEAN and related summit meetings, he repeated the same vitriol in his China visit last week, citing his “separation from the US” and that the Philippines is united with China and Russia against the world. As expected, he took back these assertions almost immediately, clarifying that the country cannot afford to be separated from the US the minute he arrived in Manila.

Spouting off these incendiary remarks then taking them back — characterized as “sugod-atras” in Filipino — should not be taken literally as advised by the President’s cabinet officials.

However, these unnecessary assertions have real, negative impact on business confidence in the country, especially for massive investment plans and pledges that remain on the “wait and see” mode since the campaign period (February 2016) until today.

Will these outbursts by the President ultimately derail the economic momentum of the Philippines as started by the previous Aquino administration?

The Economist magazine regularly pools some of the world’s biggest investment banks and ratings companies about their global economic forecast and GDP growth projections. The numbers are shown on the table.

This piece made these country groupings in re-constructing the table. Group A are traditional, developed economy allies of the Philippines; B are President Duterte’s “pivot new friends”; C are the major Asian friends and trade partners; and D are miscellaneous. Venezuela is included in D to show how socialism and heavy statism can lead to economic and business decline (see table).


These numbers show us the following:

One, group A remains to have sclerotic growth, they seem to be very lucky to grow 2% or higher. Unemployment rate is high, 5% and up, except Japan. Not shown on this table are the four EU countries which have incurred double-digit unemployment rates in July or August 2016: France 10.5%, Italy 11.4%, Spain 19.5%, and Greece 23.2%.

These figures show that the developed countries cannot be expected to provide more impetus to lead and drive faster global growth. Their capacity to provide more foreign aid, more loans and grants, is also compromised.

Group B has mixed results. China can be expected to lead regional growth and help pull upwards global demand, but not Russia. The latter remains limping due to low global oil prices, petroleum being one of its major export products, among the important factors.

Groups C and D continue to show fast growth potentials except the developed Asians like South Korea, Taiwan, Hong Kong, Singapore, and socialist Venezuela. The Philippines is expected to retain fast growth, third highest after India and China this year, also third highest next year after India and Vietnam, among emerging and developed Asians.

An important ingredient for faster growth is high and young population. Notice above that countries with 90+ million people — Vietnam, Philippines, Indonesia, Pakistan, India and China — are growing fast. The US, Japan, and Russia should belong to this category but they are growing slow, partly because they have an old and aging population.

Going back to our earlier question, will President Duterte’s emotional outbursts ultimately derail the Philippines’ economic momentum?

The answer seems to be no for two important reasons.

One, growth momentum is retained as various macroeconomic and infrastructure reforms laid by the previous administration are bearing fruit.

Two, our high and young population of 103 million people as of 2016 has become a potent force to provide the necessary market demand and labor force supply for more investments and entrepreneurial advancement.

So, despite the President’s incendiary remarks plus thousands of murders in the anti-drugs campaign that can potentially disappoint if not threaten big foreign investments planning to come to the Philippines, growth momentum is well in place.

Moreover, if this economic momentum is coupled with presidential sobriety and an anti-drugs campaign that is guided by due process, the country’s growth rate of 7%, or perhaps even higher, is very much possible.

Population and growth projections

* This is my article in BusinessWorld last April 06, 2016.


Many international agencies, both multilateral and private, have been producing growth projections for the Philippines and other developed and emerging economies in Asia. Most of these projections are short-term, usually for 2016 to 2018, and they show generally that the Philippines has better prospects for faster growth than other economies.

NEDA also launched the “Ambisyon Natin 2040” or “#SanaSa2040” campaign this week, which mostly focuses on a “Middle Class Lifestyle” long-term perspective for Filipinos. It is a modest goal actually compared to the more ambitious goal of “Developed Country by 2050” that was articulated by other groups about two years ago. The latter is an ambitious but not impossible goal.

One factor that contributes to this optimistic view of the Philippines is its huge and young population, an indication that it will result in more workers and entrepreneurs, more producers and consumers, more sellers and buyers.

Here is a set of data incorporating the top 10 biggest population countries and East Asian economies (see Table 1).

Our average population age is only one-half that of Japan, 13-14 years younger than that of China and the US, and 16-19 years younger than those of Singapore, South Korea, and Hong Kong. These rich and developed East Asian economies will soon be needing more migrants to sustain their economy, especially their huge number of pensioners. One can expect the big need for health professionals from highly-globalized and English-speaking Filipino professionals to fill the needs of these rich East Asians, not to mention those from US-Canada and Europe.

A big, young population means a big pool of highly trainable work force, eager to explore the world, and learn about the latest technological innovations and production processes.

Ten or 20 years from now, the situation will further tilt in favor of the Philippines because of its huge pool of young children at the moment. Meaning 10 to 20 or 30 years from now, they are the workers, managers, or shareholders of many enterprises here and abroad.

Nearly one-third of the Philippines’ nearly 100 million people in 2014 were babies up to 14-years old. That’s huge compared to Japan’s 13%, Hong Kong’s 12% and Singapore’s 16%. Only Laos and Cambodia have a similar situation but they have a smaller population (see Table 2).


There are important policy implications for the Philippines of the above data.

One, public health care and education should focus on the young and less on the adult population because education is now more decentralized with the continued revolution in IT. There is bigger role for household and private sector education and skills development these days are much easier and faster since intensive training with very competent international speakers can be done online.

Two, migration of university students, labor and professionals should be facilitated with few transparent rules and not be peppered with envy-inspired regulations and revenues-raising measures. In the case of rich and ageing East Asians (Japan, South Korea, Taiwan, Hong Kong, Singapore), north Americans and Europeans, either they will need more Filipino health professionals, or they will build retirement and modern health care facilities here and bring many of their ageing people here.

If more Filipinos have good-paying and stable jobs, they will need less welfare and subsidies from the government, and the state’s high and multiple taxation policies will no longer be justified.


Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers and a Fellow of SEANET and the Albert del Rosario Institute (ADRi)

Ageing societies, Japan depopulation

Human population, whether rising or declining, should be left as individual and parental decision and responsibility, not government decision and responsibility. Should there be population explosion or population control/depopulation, it should not be government-sponsored.

Thus, in ageing societies, instead of government giving subsidies to households for having new babies, government can reduce income taxes, relax rigid labor laws, so that people will have more money for their kids, or they can hire a nanny to help them raise kids.

In countries where the growth of population is flat or declining, there are two solutions: have more robots, or have more migrants. Welfarism is an ideological enemy of free migration.

Here are some old news reports.

(1) “Germany’s 82 million residents will dwindle to 74.7 million by 2050 and their average age will rise to nearly 50, assuming unchanged levels of migration, according to EU statistics agency Eurostat. Some projections are even more dire, putting the German population as low as 65 million by 2060.

At present, the age dependence rate is 27.5 on average in the 28-nation EU, but Germany and Italy are well above that level. The rate is projected to jump to 49.4 in 2050, when there will be only two people of working age for every retiree.

Most EU countries have raised their retirement age to 65 or beyond and are making citizens contribute longer for a full pension – but further increases lie ahead.”…/aging-europe-needs-the

(2) “Globally, an estimated 44.4 million people suffer from dementia and the figure is projected to triple to 135.5 million in 2050 as the population ages, Alzheimer’s Disease International estimates. Nowhere is the problem more acute than inJapan, where an estimated 8 million people have dementia or show signs of developing it. By 2060, 40 percent of Japanese will be over 65, up from 24 percent today, according to National Institute of Population and Social Security Research.

When the national program, called Dementia Support Caravan, began in 2005, apartment managers were the first to join. They were dealing with tenants who complained about elderly neighbors banging the wrong doors, failing to sort bins, stealing newspapers and rubbing human waste on communal walls, said Hiroko Sugawara, who runs the program. Now demand is rising across corporate Japan.”…/bank-tellers-serve-as

(3) “Japan’s birth rate hit a record low in 2014 at just 1,001,000 infants. When combined with 1.3 million deaths in the same year, that’s a deepening population crisis. According to Japan’s population institute, the overall population could dip to 107 million by 2040 — or 20 million lower than today.

At the same time, Japan’s population is shrinking and graying, setting up a “demographic time bomb” that could radiate out globally through the country’s Greece-level national debt and deep economic ties with China and the US.” July 1, 2015.

(4) “Despite an explosion in population greater than Malthus could have ever imagined, global living standards are higher than ever.

.. the precautionary principle, which this book rightly castigates. Based on a confusion between the sensible precept “be careful” and the nonsensical proposition that you can’t be too careful, it insists on taking the worst-case scenario as the outcome that should dictate policy. On that basis, one would never get in a car. And the massive technological advances that we have seen since the Industrial Revolution, and the reduction in global poverty that has followed, would never have occurred.

Another factor is the quasi-religious appeal of these prophecies, which may help to explain the papal encyclical to which I referred at the start. Even more recently, the Church of England at its latest synod called for all vicars to be trained in “eco-theology” as well as the Bible. It also called for churchgoers to do without lunch on the first day of each month, as a fast against climate change. Perhaps this should not be mocked: It might help combat obesity, which is probably more damaging than climate change.

“The End of Doom” is not quite in the same class as Matt Ridley’s classic, “The Rational Optimist,” but it is a good book and deserves to be widely read.” July 27, 2015.


(5) “Only 1.001 million babies were born in Japan in 2014 — a record low — and 1.269 million people died.

That’s an overall loss of 268,000 people, and a signal of a population crisis in one of the world’s most developed and debt-ridden economies.”

“TCOR and later UNEP’s Agenda 21 adopted and expanded the Malthusian idea of overpopulation to all resources making it the central tenet of all their politics and policies. The IPCC was set up to assign the blame of global warming and latterly climate change on human produced CO2 from an industrialized expanding population. They both developed from false assumptions, used manipulated data and science, which they combined into computer models whose projections were, not surprisingly, wrong. The result is the fallacy of global warming due to human CO2 is a subset built on the fallacy of overpopulation.”…/overpopulation-the…/


Japan depopulating, something like 100,000 to nearly 300,000 people a year. Japan will be forced by circumstances to have more migrant workers, and/or more robots. The same thing will happen to China. So the China commie government should be more realistic now — it should not alienate big population countries like India, Pakistan, Bangladesh, Philippines and Vietnam. Soon, these 5 countries will supply many of its manpower requirements. Or it may accept more people from Nigeria, Ethiopia, other African countries.

Migrant workers will eventually flood in, Japan will have no choice. Between ageing Japanese with dementia who cannot find their way home, would walk and get lost in the cold and die, and get foreign workers to take care of their ageing parents and grandparents, the latter should be preferable to more Japanese.

Liberalize travel and migration, relax those work visa restrictions. We should be moving towards a globalize and borderless world. That is what the Maddison data show — as human population expands, as they move from one country/continent to another, to improve their lives and the new communities they adopted, per capita income rises. Visa restrictions and border sealing were 1900s thinking of governments that persist until now. But further human modernization, FTAs among countries, and demographic realities will force those governments to slowly tear down those strict border restrictions.