Philippines’ Economic Plan: Seven Inches of Latex

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By William Pesek

The Philippines is offering a timely case study on religion's role in encouraging growth and reducing poverty -- and how it is not always for the better.

The Catholic Church essentially has a stranglehold over family-planning services in a nation of 104 million people in which one in four lives on less than $1.25 a day. The role of overpopulation is major reason: Economic gains in the Philippines aren't keeping pace with a high birthrate.

Church officials have long suppressed any discussion of providing broader access to condoms, birth-control pills and other contraceptives. The good news is that President Benigno Aquino III  isn't just speaking out on the issue, he is advancing 14-year-old legislation to fund free family planning.

The 9,000 nuns, priests and churchgoers wearing red clothes who rallied in Manila last weekend to oppose the bill aren't happy. Neither is world welterweight boxing champion Manny Pacquiao, who has led criticism of the proposal on religious grounds.

Development economists will be ecstatic, though. Former World Bank official William Easterly, for example, calls population control the "elixir" that helps poor countries become rich. "The most unprepossessing candidate for the Holy Grail of prosperity is seven inches of latex: a condom," Easterly wrote in his 2001 book "The Elusive Quest for Growth."

Philippine officials play up the nation's demographics every chance they get. Thirty-four percent of the population is under the age of 15, compared with 17 percent in China and 13 percent in Japan. Yet swelling ranks of young workers are a plus only when an economy uses them. Because the Philippines isn't creating enough good-paying jobs at home, more and more young people are heading overseas to work and send money back home. These remittances have become a national addiction.

Hats off to Aquino for having the courage and foresight to tackle a problem his predecessors avoided. While endorsement of the family-planning bill still requires a final House vote and Senate approval, Aquino is displaying a firm grasp of what ails his economy as it seeks an investment-grade credit rating.

(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)

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-0- Aug/15/2012 14:39 GMT