The Reality - Demographics
to Open Your Eyes.
The latest 2007 census show the population
is now at 88 million
Economy Birthrate Income Population Food Sales Internet TV Productivity
A Quick Look
You are looking at a country of 88 million and it is expected to double in
the next 29 years. Average family size is 5-6, and the majority of families only
have an income the equivalent of $2000-5,000 USD per year and if you average it
out it is less than $600 per person to live on. Local goods are cheap, imports
are expensive, and this is a country that even imports a large percentage of
rice, a staple in the Philippine diet. 95% of Filipinos watch TV. There are only
about 4 million PCs in this country and only 140,000 DSL lines. Wireless
broadband is catching on in many areas though. One of the real problems with DSL
is that many people don't bother with landlines and can't afford a PC anyway.
The cell phone rules here, mostly for texting which is economical. Productivity in
Southeast Asia is only 1/7th of that in industrialized countries because of the
lack of technology, not due to the people. The Philippines has the second highest birthrate in Asia.
More reliable birth control methods need to be taught and implemented to greatly
reduce the growth of a booming population.
A Promising Economy
The Philippines is a newly-industrialized country included in the "Next 11" list
of most promising economies in the world. Despite this, the unemployment rate in
the country exceeds seven percent and many families lived on less than 2 USD a
day in the most recent years. The high unemployment rate might be due to the
fact that the agricultural sector has deflated in size. Because agriculture
generates 30 percent of jobs in the Philippines, the recent boom in the service
and industrial sectors could not offset the decrease in employment rate.
Poor
This is a terribly poor country. Look at this chart below and consider that there
are approximately 50 pesos to a US dollar. There are only 500,000 families that
have a family income of more than 500,000 pesos per year. That means that as of the
year 2000, only half a million families had an income of over $10,000 a year. Some of
the people in this class have very substantial income and wealth. Now consider
that there are ten times as many families who live on less than a $1000 (50,000
pesos) a year.
The vast majority live on somewhere between $2,000 and $10,000 a year. Try
paying your rent and feeding your family of five (latest average size) on less
than $10,000 a year. We (just two of us) have no
rent and no car payments and we could not exist on less than $8,000 a year. At
that amount we would not have any money for traveling or entertainment. I've
been in 1000 peso ($20) a month rentals; you would not want to live there. $100
a month (5000 pesos) will get you a livable place but you need to really search
to find something in this price range. Get away from the major metro areas and
your costs will go down. So will the conveniences and things we take for granted
will be real luxuries out in the provinces. Study
this information in detail before you decide to come here with your marketing
skills and new ideas. If you just visit the high end malls, stores, and
restaurants you'd think you're in America. The few who are wealthy result in
tremendously overstaffed facilities, providing many with low cost incomes. Its
pretty sad when the people who tend to your needs cannot afford the very items
or meals they serve.
Luxury Items
Things foreigners take for granted are luxury items
here. So is running water out in a province. Our electric bill is more than the majority live on
per month. Not a pretty place. Live in a sub-division and close your eyes as you
travel from mall to mall and you'll be OK. When you're at a stop light and there
is a tapping on your window, keep your eyes closed, its just a little beggar
and you will learn to ignore them.
Birthrate
The Philippines has the second largest birthrate in
Asia. As the world has already figured out, a growing impoverished population is
not good for the economy. People flock to the cities in search of employment
only to end up as adding to the large squatter population. At least out in the
rural areas where land is priced affordably, they could feed themselves and
raise livestock. Land is priced very high in and around the major cities.
400,000 pesos ($8,000) is about what you'll pay for 100 square meters (less than
1100 square feet). Looking at the chart below you will realize that this is a
figure that is just a dream for most, and that does not include the cost of the
house! This country has enough farmable land to feed itself, and yet
imports a large percentage of the food to feed the population. Rice is even
imported. To live on few pesos you need to get used to a lot of rice and dried
fish. Good medical care is available for those who can afford it. Needless to
say, people die of easily cured illnesses simply because they can not afford
basic health care.
Income Opportunities
We don't try to paint a pretty picture. This is a third
world country, make no mistake about it. Many come here to live and leave after
a short number of years. There are few opportunities here to earn income.
Income
The number of families is on the left of the
chart. The income (per family) is on the bottom and is in pesos. Figure 50 pesos
per dollar, so an annual family income of 250,000 pesos is equal to $5000 US
dollars. The middle class lives on 100,000 to 250,000 pesos a year. That's $2000-$5000 dollars. Not a great deal of expendable income for luxury
items.
The Population is now at 88 million and expected to double in 29 years.
Population Distribution
56% live in Luzon
24% live in Mindanao (Also has the largest percentage of the poor)
20% live in Visayas
Population Size and Age
Age: 0-14 34.8%
Age 15-64 61%
Age: 65+ 4.2%
Gender is almost 50-50
60% of the population lives in urban areas
Largest urban areas:
In Luzon:
Manila Metro Area
Quezon City
Manila
Caloocan
Angeles City
Olonapo
Bagio
In Mindanao:
Davao City
Cagayan de Oro
Zamboanga City
In Visayas:
Bacolod
Iloilo
Average Annual per Capita Income:
$595.02
(Could you live on it?)
We used a conversion rate of 50 pesos to the
US dollar for all dollar figures quoted below.
30.4% of the population is poor. Poor is defined as having a family
income of less than
P5111 ($102.22) per year.
Of the per Capita Income:
42.6% goes for food.
3.9% goes for personal care items.
This Amounts to:
$253.47 per person for food.
$23.21 per person for personal care. (75% imported)
Imports:
25% of food is imported of which 29% comes from
the US.
This amounts to:
$63.37 of food consumed is imported
Of which:
$18.37
is from the US. The balance of $45 is from the EU, Oceania,
and Asia.
Food Sales
70% of overall sales are through Sari-sari stores.
In areas such as metro Manila, 79% of the sales are through Grocery
Store Chains. Data is not available for the Cebu Metro Area or other Metro
areas, but based on the overall numbers, the figure for grocery store sales is
less in other metro areas. You must remember that 60% of the population lives in
urban areas and yet 70% of overall sales come from sari-sari stores as even in
large cities there is an abundance of sari-sari stores. As of 2004 there were
549,717 sari-sari stores. What is interesting here is that were only 509,345 at
the end of 2003. There are probably more that operate without licenses. This
increase came about even as super market sales experience double digit growth.
Sari-sari stores are convenient and everywhere, and the low income groups
purchase for immediate needs. They buy only what they need now to survive as
that is all they can afford.
Internet and Phone Services
The vast majority of this population uses cell phones. They buy pre-buy 'loads'
for their phones that allow them to text and make calls. You can install Chikka
www.chikka.com on your PC and then text or
call back and forth. Chikka also allows you to 'load' her phone from your PC.
Most just do not have landlines, so they use an internet cafe to find their
future spouse. Internet cafes are everywhere and we hear from more foreigners
who want to set up their Filipina or her family in the internet cafe business.
It is not as profitable as you think and there is no guarantee it will make
money. You need to have a good business mind for any type of business here and
really do your homework. The last numbers I had seen said there were only
140,000 DSL connections in the country. Considering a population of around 88
million, this isn't many. Wireless internet is becoming popular in many areas
where DSL is not available.
The dynamic Philippine broadcast industry boasts of over 2000 stations, servicing 95% of the country’s 88 million people. Television (TV) and radio are considered the cheapest forms of entertainment in the Philippines, given the fact that TV and radio signals are able to efficiently reach the country’s 7100 islands. With stable demand, the industry posted estimated annual revenues of PHP20 billion (about $392 million) in 2005, the bulk of which came from advertising. A July 2005 study conducted by Asia Research Organization, Inc., estimates that 95% of the Philippine’s 16 million households own a television set, while 79% own a radio. This data clearly indicates that communication barriers caused by the topography of an archipelago like the Philippines are now a thing of the past. In short, relay stations, cable, and satellite TV services have opened up the Philippines to the world of global communications. The few remote areas that do not have access to TV or radio will gain access in the next year or two. Satellite TV is also available in the Philippines, but on a very limited scale. Dream TV is the sole provider of Direct-To-Home (DTH) TV, and currently has only 120,000 subscribers nationwide. As shown in the table below, TV viewer-ship and radio listener-ship is quite high in the Philippines, despite a per capita GDP of little more than $1000. U.S. content is very popular in the Philippines. While most of the top-rated U.S. programs are available in cable, local networks, like RPN 9, ABC 5 and Studio 23 still import these programs and cater to those who do not have a cable subscription. Among the U.S. shows shown on local networks are “American Idol”, “CSI”, “24”, “Lost”, “Oprah”, “Charmed”, “Will & Grace”, “Gilmore Girls”, “Alias”, and “Entertainment Tonight”. Piracy, particularly in the cable industry, remains a problem in the Philippines.
|
TV and Radio in the Philippines |
|
| Total Households | 15,629,345 |
| Households with TV Sets | 14,835,469 |
| Percentage | 95% |
| Households with Radio | 12,338,745 |
| Percentage | 79% |
| Household TV Viewing Levels | 14,497,009 |
| Percentage | 94% |
| Household Radio Listening Levels | 12,480,108 |
| Percentage | 81% |
As of December 2005, the Philippine National Telecommunications Commission (NTC) reports there are 2767 duly registered broadcast companies in the Philippines, comprised of 375 AM radio stations, 579 FM radio stations, 232 TV stations (VHF and UHF), 28 TV relay stations, 2 Pay TV stations, 57 TV translator stations, 3 TV stations operating at 40 GHz, 1476 cable TV stations, 3 Local Multipoint Distribution System (LMDS) stations, and 8 Multi-Channel, Multi-point Distribution System (MMDS) stations. However, all MMDS providers are not yet operational.
Cable TV experienced dramatic growth in the Philippines during the First Gulf War. Viewers tuned to CNN, which offered updated international news about the conflict. As popularity increased, operators began offering entertainment and education channels, including Disney Channel, Discovery Channel, and HBO. To date, roughly 1000 companies have been given Provisional Authority (PA) by the NTC to operate and provide cable services. However, only about 700 companies are currently offering the service, and only about 50 operate “large” cable systems. Essentially all major cities and all major municipalities have a cable system, although many of the country’s 1500 municipalities, especially the poorer ones, have limited or no access.Beyond Cable, which offers between 60 and 70 channels, is a holding company created by the merger of the two largest local cable providers, SKYCable and HomeCable. The company’s infrastructure is 70% ready for digital technology, as most of their trunk lines are now fiber optic. They currently have multiple head-ends, but are contemplating going to only one head-end to cut costs. Additionally, the company is considering using “addressable box” technology to minimize illegal connections. Only a small fraction of their network subscribes to cable Internet services. Destiny Cable and Global Cable merged in November of 2003 to form Global Destiny and claims to have about 30% market share in Manila. Destiny offers 89 channels and has one of the lowest subscription costs in the country. Like Beyond, Global Destiny’s infrastructure consists of fiber optic cable in their trunk lines and coaxial cable to individual locations. Destiny uses a single head-end and has two-way transmission on most of its lines. Global Destiny’s expansion plans include the purchase of modulators, line extenders, amplifiers, digital boxes and scrambling technology. They also indicated that they are currently adopting “SCS1000” for scrambling 5 of their channels in addition to other anti-piracy and pro-growth technologies.
High Definition TV
Likewise, the Philippine market is neither
ready for high definition neither TV (HDTV) nor Internet Protocol Television (IPTV).
The industry itself is knowledgeable about these upcoming trends, but the
consumer market is not yet demanding these technologies.
Broadband
Broadband, currently pegged at 2% market
penetration, is growing slowly in the Philippines compared to neighboring
countries. DSL networks are deployed in Metro Manila; export processing zones in
Laguna, Batangas, Cavite, Cebu, Olongapo; information technology (IT) zones; and
in urban centers like Davao. An estimated 140,000 DSL lines are installed. There
are about four million PC’s in the country.
The growing popularity of Voice Over Internet Protocol (VOIP)
is driving down the revenue of telecom operators. It is, however, also expected
to significantly increase broadband penetration, as consumers will enjoy faster
speeds using broadband compared to dial-up. In March 2006, GlobeQUEST, the
marketing and data division of Innove Communications, Inc., launched its new
web-based phone service. Innove is the wireline provider of cellular company,
Globe Telecom. The product is called “GlobeQUEST Web Phone” which uses
traditional telephone prepaid cards. Instead of a regular phone, however, the
calls maybe routed from a desktop, laptop, or personal digital assistant
The slow growth of broadband has inhibited the entry of IPTV
or “triple play” technology. Despite this, telecom carriers are already looking
at this technology, acknowledging that it is the future of the
telecommunications industry. There are legislative limitations that must be
addressed before the local industry is ready to embrace “triple play” or the
more advanced, “quadruple play”. (See “Market Access” for more details).
Fiber Optics
Cable companies are the major users of fiber optics for their
main distribution lines, which are coupled with metal coaxial cables to connect
to individual houses. Like the broadcast networks, cable companies still use
analog systems, although some operators, like Beyond Cable and Global Destiny,
have made their systems digital ready. Most cable companies have a single
head-end, since they are mostly small local operations. The notable few that
cover larger geographical areas have multiple head-ends. Broadcast networks also make use of fiber
optic cable mostly for content distribution to cable TV providers. ABS-CBN, in
particular, uses this technology support their international cable channel, TFC.
Productivity MANILA, Philippines: Productivity in Southeast Asia has been nearly stagnant over the last decade, with workers producing only a seventh of the wealth compared to their counterparts in developed economies, a U.N. agency said Monday. Productivity in Southeast Asia and the Pacific rose at an annual average of only 1.6 percent between 1996 and 2006, compared with East Asia, where workers now produce twice as much as they did 10 years ago — the fastest rise anywhere in the world, the International Labor Organization said. Each worker in the region produced US$9,419 (€6,873) in 2006, or 3.5 percent more than in 2005, but just slightly higher than US$8,068 (€5,887) produced 10 years ago, said the ILO's report, "Key Indicators of the Labor Market." Unemployment is higher than before the Asian economic crisis of 1997, the ILO said, stressing the importance to find the right balance between productivity and employment rise. In East Asia, each worker produced US$12,591 (€9,187) of wealth in 2006, from US$6,347 (€4,631) in 1996.
"Development in Southeast Asia and the Pacific has been less impressive than East Asia, " the report said. "Nevertheless, the region has profited from the economic boom in China and India and the good economic performance of most developed economies in recent years." In South Asia, productivity was eight times less than in rich countries, according to the report. The good news is there are less poor Asian workers. "The Asian regions saw a substantial reduction in the number of working women and men living on less than
US$1 (€.73) a day," the report said, adding the number of working poor decreased by as many as 148 million between 1996 and 2006, representing a drop of nearly 50 percent.
In contrast, sub-Saharan Africa's weak economic performance resulted in an increase of 24 million in the number of working poor. The productivity figure is found by dividing the country's gross domestic product by the number of people employed. The U.N. report is based on 2006 figures for many countries, or the most recent available.
The study included eight of 11 Southeast Asian countries: Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore Thailand and Vietnam. East Asia includes China, Hong Kong, South Korea and Taiwan. South Asia encompasses Bangladesh, India, Pakistan and Sri Lanka.
The average U.S. worker produces $63,885 of wealth per year, US productivity has been growing twice as fast as that in Europe and Japan over the past seven years.
The report said the high overall US productivity resulted in part from two factors. The first is that the US economy provides an environment for widespread use of information and communications technology. The second is that it has had more growth of wholesale and retail trade and financial securities using the technology.
Schmidt said that the report also looked at productivity in agriculture, where technology proved to be a huge advantage. For example, she said, an agricultural worker in the United States produces 650 times more than the worker in Vietnam.
But she said the report, which was based on government-supplied figures and other data, shouldn't be taken to mean that workers in developing countries were lazy or inefficient.
If you are talking about developing countries, it's not fair to say that these people are not efficient,'' she told reporters. They are working hard. They are probably working harder than other people. "It's just because they do not have the technology that they cannot perform that well.''
Top Economy Birthrate Income Population Food Sales Internet TV Productivity
