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Economy: Philippines vs Vietnam
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Why does Vietnam still have a long way to catch up to the Philippine economy?
busybee8
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Why does Vietnam still have a long way to catch up to the Philippine economy?
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It doesn’t have a long way to catch up, actually. Vietnam (quite low-key, believe it or not) surpassed the Philippines’ GDP (PPP) per capita quite a while ago in 2009. The graph below uses data from International Monetary Fund, and includes their estimates for 2020, and 2021. In 2020, the GDP (Purchasing power parity or PPP) per capita for Vietnam and the Philippines, was $10,634 and $9,494 respectively. The Philippines barely has the larger economy at the moment, using IMF statistics. Why? Well to put it simply, the Philippines has around 12,242,499 more people. Do you know what region in the Philippines also has around 12,000,000 million people? The National Capital Region, the center of the Philippine economy that contributes around 36% to its national GDP. If Vietnam is already that close to the Philippines’ total economy – one can imagine that Vietnam is significantly making more over their entire country to make up for this ‘’missing gap.’’ Now what you may have been seeing in statistics, is the nominal GDP. In 2018, according to the World Bank the GDP per capita in USD for: Vietnam was $2,566.6 Philippines was $3,102.7 Note how for both economies, this is quite lower than the GDP (PPP) estimates. That is largely to do with the lower cost of living in both countries, compared to countries like the USA for example. A thousand bucks can go miles in either two, but isn’t that much in the USA; in the long term. This is where the nominal GDP starts to skew statistics against developing nations, as the currency of these two countries are weaker than the dollar, but also wildly different to each other. 1 US dollar = 50.61 Philippine pesos (for 23/04/20) 1 US dollar = 23,442.50 Vietnamese dong (for 23/04/20) It is widely speculated that the weak dong, drags down the nominal GDP of Vietnam as a whole. The weak dong generally helps Vietnamese exports though. It should also be noted that the cost of living in the Philippines is noticeably higher than Vietnam. The Philippines also has a unique relationship with its overseas workers nationals, and they alone contributed 11% of the country’s GDP in 2018. There is already a strong base demand for the local currency exchange from that. These are three factors, amongst others, could be why the GDP (PPP) per capita seems to be reversed in ranking, compared to the use of nominal GDP. Further reading: A small caveat: It is unclear whether the Philippines fully rebased their GDP to 2018, and if this number has already been reflected in the IMF’s data. I will update this answer if necessary. Regardless I doubt the Philippines will see an increase as large as Vietnam, and so the gap has probably diminished from 2010–2020. The question seems to be aimed at the total national GDP of the two countries. Going along with this impression, the Philippines is barely above Vietnam at this point. I imagine that the two countries will fluctuate above and below each other in the next few years, especially if both countries (particularly the Philippines) remain stable. However I need to emphasize that I already consider Vietnam to have passed the Philippines on a per capita basis; this is what matters most to the people that live in the two countries. When we compare countries like Singapore, to Vietnam or the Philippines, there was a time when both their economies were smaller. Philippines and Vietnam has its population going for it. Just because both have surpassed Singapore recently, doesn’t mean we consider the latter two to have better economies in reality. The same can be said in the comparison between Philippines and Vietnam. The Philippines has a significantly larger population, that alone is going to skew simple metrics, and will probably mean the Philippines will have the larger economy in the end. My personal take on this, is that the average Vietnamese life has already started to pass the average Filipino life (since 2010,) and is already bound to completely pass and go a lot farther. In fact, if you look at the inequality-adjusted HDI, the two were already bordering each other. This was 2 years ago, before the two countries made their revisions so it will be interesting what happens in the next report. It will naturally take a few years for Vietnam, a country with a lot more equal growth, to completely outpace its neighbour that is heavily piggy backing on the already financially well off. I am not saying Vietnam is completely immune to this, but the Philippines is quite notorious for its economic disparity. As both economies are currently growing at respectable rates; I believe Vietnam within the next 20 years, (if not somewhere in the next 10 years) will outpace the Philippines in all metrics like basic HDI, GDP (nominal) per capita etc. But a lot can happen in two decades, of course.
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Everyone has the right to be proud of their country. On the other hand, a realistic assessment of the economy is more helpful because you can work out improvements from a realistic assessment if you want to. Agricultural economy, industrial economy, tourism industry are very underdeveloped and ineffective. There is a minority in the Philippines that are mentally conditioning the country and demolishing the future of the Filipinos for decades. Foreign investors have been cheated and the world is therefore warned not to invest in the Philippines, to visit the Philippines as a tourist … Thailand and Vietnam are recommended. The Filipino economy or social life can only be maintained if more than 10,000,000 Filipinos continue to find work abroad to support 5 or 6 family members. That means: These 10,000,000 Filipinos feed 50% of the population and without the foreign workers the Filipinos would starve to death with their own economy …… Manila July 2019: Bananas made in Philippines 70 pesos, at the same time in Europe, bananas from Central America, 9,500 km away, 56 pesos, a week later 51 pesos. Cotabato City January 2020: Bananas made in Philippines 70 pesos, in Europe 51 pesos and today 09 May 2020 49 pesos ……. Between 2020 and 2050, the Filipinos will have to survive some famines. Only those who are open to reality can stop the wrong development in the Philippines and try to improve the socio-economic conditions. Only a chance to change the wrong, ineffective economic and social development is to accept reality. Ignoring all reality through false pride is not productive and helpful. This recklessly misses the chance to forgive … .. the chaos of eliminating corruption with all our might in order to overcome the extremely difficult conditions of 70 years of incompetence. Incidentally, many foreigners wanted to help their friends and families in the Philippines, moved to the Philippines and invested until they realized that all the effort was in vain because any mayor, district administrator, began extortion after the investment was completed, that no one has wanted or wanted to prevent. These psychopathic monsters are still active in their dirty blackmail business in 2020, demolish the Philippine economy and the future of the Filipinos.