Philippines per capita GDP hit US$1,700 in 2007

The per capita gross domestic product (GDP) of the Philippines climbed above $1,700 for the first time in 2007, on the back of rapid economic expansion and peso appreciation.

Per capita GDP refers to the value of total economic output divided by the number of people in the country. It refers to the average contribution of each individual to the GDP, which is the gross value of products and services produced in the country.

A simple computation by the National Statistical Coordination Board (NSCB) showed that per capita GDP, in dollar terms, grew 24.9 percent to $1,742 last year from only $1,394 in 2006.

Multilateral lenders such as the Asian Development Bank and World Bank, which use more elaborate computation tools, have yet to release their own estimates for the country.

Even at $1,700, the per capita GDP of the Philippines is still dwarfed by its Southeast Asian neighbors such as Thailand, with an annual per capita income of more than $3,000; Malaysia, with over $5,000; and Singapore, with more than $20,000.

In dollar terms, per capita GDP surged after the Philippine peso appreciated by more than 15 percent against the greenback in 2007, according to NSCB secretary general Romulo Virola. This was complemented by a strong growth in actual per capita income.
At current prices, per capita GDP rose 8.1 percent to PhP74,981 in 2007 from only PhP69,362 in 2006. The 2007 figure also effectively doubled over the past decade from less than PhP35,000 in 1997.

The NSCB came up with the 2007 figure by dividing the GDP, estimated at P6.651 trillion at current prices, by the Philippine population, which was placed at 88.71 million last year.

At current prices, per capita GNP was also placed at P82,008 in 2007, up by 8.6 percent from P75,544 in 2006 while per capita personal consumption expenditure (PCE) rose 7.1 percent to P52,035 from P48,591.

GNP is the sum of GDP and net earnings from abroad, including dollar remittances. PCE is the combined expenditures incurred by the population during a given period.

Minus the impact of inflation, which is computed by using the constant 1985 prices, per capita GDP rose 5.2 percent in 2007, the fastest on record. In 2006, per capita GDP went up by only 3.4 percent.

This became possible when the GDP grew 7.3 percent year-on-year in 2007, easily overtaking the 2 percent increase in population from 86.97 million in 2006.
Per capita GNP also grew 5.7 percent based on constant prices in 2007, while per capita PCE rose 4.0 percent.

Because of higher income and slower population growth rate, labor productivity improved by 5.8 percent in 2007, faster than the 4.4 percent growth in 2006.
While the per capita income improved last year, economists warned that wealth is not equally shared in the country.

Of the estimated $150 billion economic output of the Philippines in 2007, four individuals grossed more than $1 billion each.

In its latest list of the world’s richest, Forbes magazine estimated the net worth of Jaime Zobel de Ayala and family at $2 billion; Henry Sy and family, $1.7 billion; Lucio Tan and family, $1.6 billion; and Andrew Tan, $1.1 billion.

Forbes also listed 36 others as the country’s richest, with net worth ranging from $30 million to $940 million each.

In its 2006 Family Income and Expenditure Survey, the National Statistics Office reported that the total family income of the tenth decile, representing the richest 10 percent of the population, was about 19 times that of the first decile, or the poorest 10 percent.

Virola also said that poorer families have more members to feed, which means that more people are sharing a smaller income pie.

"On the average, poor families are larger than non-poor families by more than one member (5.87 versus 4.34). Specifically, 21 out of every 100 poor families had at least 7 members in 2003 compared to only 6 among the non-poor," Virola said.

The NSCB will release the latest official poverty estimates in the country in March. The report, however, was based only on 2006 data, and this will not be updated until the next three years.