R E S E A R C H A N D A N A LY S I S

Material Flow Accounts and Driving

Factors of Economic Growth
in the Philippines
Marianne Faith G. Martinico-Perez, Tomer Fishman, Keijiro Okuoka, and Hiroki Tanikawa

Keywords:
Summary
developing country
domestic material consumption This study looks into material flow trends in the Philippines from 1985 to 2010 by utilizing
(DMC) the methodology of economy-wide material flow analysis. Using domestic data sources, this
industrial ecology study presents disaggregated annual material flow trends in terms of four major material
IPAT categories, namely: biomass; fossil energy carriers; ores and industrial minerals; and construc-
material flow analysis (MFA)
tion minerals. The results describe in detail the growth of material flows in a high-density
socioeconomic metabolism
country at the onset of its development and reveal the shift of material consumption from
dominance of renewable materials in 1985 to nonrenewable materials in 2010. IPAT analysis
shows that the increase in material consumption was driven by population growth from
1985 to 1998 and by growth in affluence from 1999 to 2010. However, high inequalities
amidst the growing economy suggest that a small group of wealthy people have influenced
the acceleration of material consumption in the Philippines. The results of this research are
intended to provide a thorough analysis of the processes occurring in Philippine economic
growth in order to assist in tackling implications for the important issue of sustainable
resource management.

Introduction a nonbinding declaration called the Manila Declaration on

Green Industry in Asia 2009, to improve resource efficiency,
Demographic and economic growth as well as technological
integrate sustainable consumption and production, and de-link
advances from the onset of the twentieth century resulted in
economic growth from environmental degradation—aiming
unprecedented growth in global material extraction. Recogniz-
for the continuous growth of economies while, at the same
ing the finite, limited supply and unequal distribution of natural
time, reducing impacts to the environment (UNIDO 2009).
resources, overexploitation has been identified as a major global
Whether at global, regional, or national scales, the frame-
environmental problem (UNEP 2011b; Giljum et al. 2010).
work of actions and policies toward sustainable consumption
The world’s economic growth is currently centered in the Asia-
and production requires information on trends in material re-
Pacific region and is considered to be unsustainable given that it
source extraction and consumption. In this context, the Philip-
is characterized by rapid population growth, increased resource
pines, as a newly industrialized country and one of the most
utilization, and rapid urbanization (UNEP 2013). The growth
dynamic economies in the East Asia region (IMF 2014; World
patterns in this region affect the global demand and consump-
Bank 2014), is worth investigating. The Philippines represents
tion of materials and subsequently affect not only the regional
a high-density developing country (Krausmann et al. 2008); its
environment, but also the entire global environment. To ad-
population reached 93 million with a compounding annual pop-
dress this alarming trend, 22 Asian countries pledged, through
ulation growth rate of 2% and average population density of 308

Address correspondence to: Marianne Faith G. Martinico-Perez, Graduate School of Environmental Studies, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601,
Japan. Email: marianne@nagoya-u.jp

© 2016 by Yale University

DOI: 10.1111/jiec.12496 Editor managing review: Seiji Hashimoto

Volume 00, Number 0

www.wileyonlinelibrary.com/journal/jie Journal of Industrial Ecology 1

 R E S E A R C H A N D A N A LY S I S
people per square kilometer in 2010 (PSY 2012). The growing
Philippine economy is constantly challenged and slowed down
by national political issues, as well as global economic and
financial crises. Being the world’s second-largest archipelagic
country, it is prone to natural disasters and the effects are aggra-
vated by global climate change. Nevertheless, the Philippines
strives to move toward economic development through the re-
sponsible utilization of natural resources as embodied in the
Philippine Development Plan for 2011–2016 and its expressed
commitment toward resource-efficient, low-carbon industries
through the Manila Declaration on Green Industry in Asia in
2009 (UNIDO 2009).
Understanding the material flows in the economy is a first
step in addressing resource-related environmental issues. The
physical accounts provide the necessary detailed information
on material consumption and allocation and its relationship to
economic growth. The methodology of economy-wide material
flow accounting/analysis (EW-MFA) is a useful framework to
determine the metabolic performance of economies (Bringezu
et al. 2003; Fischer-Kowalski et al. 2011). Following pioneer-
ing studies of the material flows of industrialized countries
(Adriaanse et al. 1997; Matthews et al. 2000), EW-MFA has
been standardized (Eurostat 2001, 2009, 2013) and enables a
systemized accounting of the material inputs and outputs of lo-
cal, national, or regional economies (Giljum et al. 2014; Schaf-
fartzik et al. 2014). EW-MFA accounts have been proliferating
in recent years for both developed countries (e.g., Krausmann
et al. 2011; Gierlinger and Krausmann 2012; Schandl and
West 2012) as well as for economies in different stages of
development, such as Latin American countries (Giljum 2004;
West and Schandl 2013; Manrique et al. 2013), countries of the
former Soviet Union (West et al. 2014), and Asia and the Pa-
cific (Schandl and West 2010). Much attention has been given
to big countries with fast-growing economies, such as China
and India (Hubacek et al. 2007; Wang et al. 2012; Giljum et al.
2010; Singh et al. 2012). However, few studies have focused so
far on the other newly emerging economies in South and South-
East Asia. Although studies of the Asia-Pacific region (Schandl
and West 2010; UNEP 2011a) have provided per-country data
using international data sources, analysis was conducted only at
the subregional scale and on a selected number of countries, of
which the Philippines was not one. A recent effort to utilize the
EW-MFA framework was done to assess economy-wide material
flow accounts and their implications in Myanmar, Bangladesh,
and the Philippines (Maung et al. 2014). Comparing the
totals of all material inflows, it revealed that the increasing
resource extraction and consumption trends are influenced by
the resource management policies and development patterns
of these three countries. That study, however, presented only
an approximation of the total aggregated material flows for
the Philippines. Specifically for the Philippines, Rapera (2005)
examined the relationship between material flows and poverty
in the country, showing a slight positive effect of biomass flows
in poverty alleviation from 1981 to 2000, and Chiu (2011) dis-
cussed material flow accounts from 2000 to 2009, considering
the potential for green economy and sustainable consumption
2 Journal of Industrial Ecology
and production in the Philippines. However, these studies
show disparities in the values of material flow indicators. Using
primarily domestic data sources, our data aim to overcome
these discrepancies and provide more-precise long-term
material flow accounts for the Philippines. With a dynamic,
yet volatile, economic growth in the Philippines and recent
developments in the methods of economy-wide material flow
accounts, it is timely to compile a longer period of material flow
accounts of the Philippines in a disaggregated, per material
category basis as presented in this study. We also provide
comparisons of the trends of material consumption to other
countries in Asia at various levels of economic development
and determine the driving factors of the resource consumption
using the IPAT analysis method based on the periods of
implementation of Medium Term Philippine Development
Plans.
This study is part of a bigger research project in the
Philippines that aims to provide a thorough understanding
of the environmental and economic challenges faced by the
country through the framework of material flow and stock ac-
counting. Further, this study adds to the body of knowledge
the Philippines, as an archipelagic country, has at an early
stage of economic development. Thus, the results, analysis, and
accounting factors may be beneficial in the formulation of en-
vironmental and economic policies in countries with similar
geographical characteristics and development stages across the
world.
Methodology
The latest revised methodological guide and standard meth-
ods of economy-wide material flow accounting (Eurostat 2013)
was used for the compilation of data for the material flow ac-
counts. However, whereas construction minerals are presented
under the main material category of nonmetallic minerals in
the Eurostat guidelines, we followed the practice of several re-
cent studies (Schandl and West 2010, 2012; West and Schandl
2013) and disaggregated the materials based on the follow-
ing top-level material categories: biomass, fossil energy carriers,
construction minerals, and metal ores and industrial minerals,
as shown in table 1.
All materials are accounted for in terms of mass flow in
tonnes per year. The following material flow indicators (Fischer-
Kowalski et al. 2011) are calculated in this study: imports and
exports; domestic extraction (DE), which refers to all materials
taken from the Philippine environment; domestic material con-
sumption (DMC), which is DE plus imports less exports; and
physical trade balance (PTB), which is equivalent to imports
minus exports. The materials were also classified as renewable
(biomass) and nonrenewable (minerals and fossil energy car-
riers). The per-capita values for aggregated and disaggregated
DMC were calculated and used as indicators for metabolic rates.
Indirect material flows or unused materials associated with ex-
ports or imports, as well as hidden materials such as overburden
from mining activities, were not accounted for in this study.

Table 1 Material categories and main items used in material flow accounting
Material categories Subcategories
Biomass Wood
Wild fish catch
Crops
Grazed biomass
Crop residues
Fossil energy carriers Coal and other solid energy carriers
Liquid and gaseous energy carriers
Ores and industrial minerals Precious metals, base metal ores
Nonmetallic minerals except for
construction
Construction minerals Nonmetallic minerals for construction
Data Sources
The data for compilation of material flows were taken
primarily from Philippine Statistical Yearbooks (PSY 1987–
2012) and Philippine Yearbooks (1985–2012) that provide
comprehensive annual data on resource extraction and trade of
materials. Data from the annual reports of government agencies
in the Philippines were also utilized to cross-check and fill some
data gaps in the 25-year compilation period. This study utilized
country-based estimation factors for the materials not directly
accounted for in the national statistics. Although estimations
are provided in the Eurostat (2013) guide, some are not applica-
ble to low- or medium-income countries such as the Philippines.
For instance, the estimation on the typical roughage intake
of grazing animals in Eurostat’s values is based on the indus-
trialized livestock production system, but in the Philippine
setting, 90% of cattle are raised on smallholder farms, and
only 10% are produced in commercial ranches (Moog 2006).
Additionally, residue from coconut, which is not included in
Eurostat estimation values (Eurostat 2013), is included in this
accounting. Agriculture harvests from tropical crops, such as
fruits and vegetables, were also considered in this accounting.
Crop harvests, timber and nontimber forest products, and
fish catch (excluding aquaculture) data were taken from the
Philippine Statistical Yearbooks (PSY 1987–2012), annual re-
ports of the Bureau of Fisheries and Aquatic Resources (1985–
2010), and Philippine Forest Statistics (DENR 1990, 1995,
2000, 2005, 2010). Crop residues were estimated based on
research and case studies undertaken in the Philippines (Ba-
conawa 1986; Mendoza and Samson 1999, 2006; Baconguis
2007), resulting in the following factors of combined harvest
and recovery rate of rice (1.21), corn (0.96), coconut husk
(0.22) and sugarcane (bagasse, tops, and trash; 0.93). Estimation
for grazed biomass is based on the consumption of carabao and
cattle (2.92 tonnes/head/year), goats (0.365 tonnes/head/year),
and hogs (0.411 tonnes/head/year) taken from Kastner (2007,
Martinico-Perez et al., MFA and Driving Factors in the Philippines
R E S E A R C H A N D A N A LY S I S
Items
Round wood, fuel wood
Commercial and municipal fishing
Cereals, roots, fruits and vegetables,
and others
Straws, grass
Rice and corn straws, sugarcane tops and
trash, coconut husks
Lignite (brown coal), hard coal
Crude oil and natural gas
Gold, silver, copper, iron, chromite,
nickel, and others
Marble, granite, fertilizer minerals, salt,
and others
Sand and gravel, limestone for
construction, clay, silica sand,
aggregates, and others
2009). Fuel wood data were estimated based on the study of the
Department of Energy (DOE) (DOE 1996), with average annual
fuel wood and charcoal consumption of 0.169 tonnes/capita.
Data on extraction of fossil energy carriers were lifted from
the Philippine Statistical Yearbooks (PSY 1987–2012). Data
from the International Energy Agency (IEA) (IEA 1994–2010)
were utilized to cross-check the domestic extraction as well as
to fill data gaps for imports and exports of raw and processed
fuel products.
The data sources for metal ores and industrial minerals are
the Philippine Statistical Yearbooks (PSY 1987–2012). Quan-
tities given in concentrates or metal contents were converted
to amounts of extracted gross ores as suggested by Eurostat
guidelines (Eurostat 2013) based on metal ore grades in the
Philippines (USGS 2012).
Statistics on construction minerals are presented in detail
in the Philippine Yearbooks (1985–2012). Estimates of the
quantity of limestone utilized for cement production based on
the cement production volume reported by the Cement Man-
ufacturers’ Association of the Philippines (CeMAP) (CeMAP
2004, 2012) were also calculated for comparison. The higher
quantity was then used in this compilation (Eurostat 2013).
The sand and gravel data in the Philippine Yearbooks were
counterchecked using the indicator of per-capita consumption
of sand and gravel, which should be above 1 tonne per capita
per year (Eurostat 2013). Thus, the sand and gravel data for this
compilation were directly lifted from the Philippine Yearbooks.
To complete the data gaps and cross-check our data,
international data sources were utilized, including FAOSTAT
(FAO 2010), IEA (1994–2010), and USGS (2000–2010).
Cross-checks showed that some materials, such as metal ores
and industrial minerals, are not uniformly accounted for; in
this case, national data were used. Socioeconomic data, such
as population and gross domestic product (GDP) (in US$ con-
stant 2005), were taken from World Bank Indicators (World
Bank 2014).
3
 R E S E A R C H A N D A N A LY S I S
Figure 1 Material flow in Philippines from 1985 to 2010 disaggregated in terms of four main material categories: (a) domestic extraction;
(b) imports; (c) exports; and (d) domestic material consumption. Note that different scales are used from (a) through (d).
Results
Trends in Material Flow in the Philippines
Figure 1 shows the trends of DE, physical imports and ex-
ports, and DMC from 1985 to 2010 presented in four main
material categories.
DE (figure 1a) grew from 174 million tonnes (Mt) per year in
1985 to 373 Mt in 2010. The biggest share of DE was biomass
at 76% (132 Mt) in 1985, followed by construction miner-
als (16%), ores and minerals (7%), and fossil energy carriers
(1%). Biomass remained the highest DE component, with 47%
(174 Mt) in 2010. Construction activity has intensified with a
sixfold increase in construction minerals consumption, reach-
ing 44% of DE (165 Mt) in 2010. DE of fossil energy carriers
likewise grew sixfold, from 2 Mt in 1985 to 11 Mt in 2010,
whereas ores and minerals doubled from 12 Mt in 1985 to 24 Mt
in 2010. The extreme and extended dry season in the country
brought about by the El Niño phenomenon in 1998 weakened
agricultural production. This resulted in a sharp 6.6% drop in
agricultural production, wherein rice, as well as other cash crops
such as coconut and sugarcane, had double-digit declines in the
fourth quarter of 1998 (Jegillos 2000).
The country envisioned being a newly industrialized country
by the year 2000 as expressed in the Medium Term Philippine
Development Plan for 1993–1998. It encouraged construction
activities, such as additional roadways and private building
4 Journal of Industrial Ecology
construction, resulting in an upswing of construction mineral
extraction, particularly in 1996 (98 Mt) and 1997 (113 Mt).
For sand and gravel extraction alone, inflows increased from
78 Mt in 1996 to 90 Mt in 1997. However, this rapid increase
was short-lived and was not sustained because of economic
fluctuations brought about by the Asian Financial Crisis that
occurred in 1997 and 1998.
The import of materials (figure 1b) increased from 14 Mt in
1985 to 50 Mt in 2010. The country is dependent on imported
fossil energy carriers, such as crude oil and coal, to augment
its expanding energy requirements. The import of fossil
energy carriers rose from 8 Mt in 1985 to 28 Mt in 2010 and
comprised around 50% of total imports. In 2009, the primary
energy mix of the Philippines included 41% from imported
energy sources (NEDA 2011). Biomass imports also grew
remarkably, from 2 Mt in 1985 to 11 Mt in 2010. The increase
in biomass imports is centered on semiprocessed and finished
agriculture and food products to supply the food requirements
of the growing population. Imported metal ores and industrial
minerals are comprised of processed ores and mineral products,
such as electronic products and equipment, that grew from
3 Mt in 1985 to 6 Mt in 2010. Imported construction minerals
increased from 3 Mt in 1985 to 6 Mt in 2010.
Biomass and metal ores and industrial minerals constitute
the major export categories of the Philippines (figure 1c), each
increasing from around 5 Mt in 1985 to around 12 Mt in 2010.

Figure 2 Trade in the Philippines from 1985 to 2010: (a) aggregated trends of import, export, and PTB; (b) PTB by material categories.
Note: Negative values designate exports of materials. PTB = physical trade balance, imports minus exports.
The main agricultural exports of the Philippines are comprised
of food and live animals; tobacco and tobacco manufactures;
and animal and vegetable oils. Extracted metal ores and indus-
trial minerals are shipped out of the country as raw materials for
further processing to semifinished and finished products. The
country’s mining industry has slowed down because of the effects
of natural disasters, political instability, low international metal
prices, high operating costs, and low foreign investment. This
prompted the revitalization of mining industry through the en-
actment of the Philippine Mining Act of 1995 that aims to lib-
eralize foreign investments in this sector. It was contested, how-
ever, to be unconstitutional as it allows foreigners to be engage
in mining through Financial and Technical Assistance Agree-
ment (FTAA), a condition that contradicts the 1987 Philippine
Constitution. The decision in favor of its constitutionality was
made on December 2004. As a result, exported base metals, such
as nickel ores, chromite, and copper, dramatically rose from 1.1
Mt in 2005 to 5.1 Mt in 2007. However, low and unstable global
market prices resulted in a decline in metal ore exports in 2008
and 2009.
Integrating the three previously described flow indicators,
the DMC indicator reveals the actual usage of materials within
the Philippine economy. It more than doubled, from 188 Mt in
1985 to 396 Mt in 2010, as shown in figure 1d. In 1985, biomass
comprised 72% (129 Mt) of DMC followed by construction
minerals, with 18% (32 Mt) of DMC. Whereas biomass re-
mained the major material category consumed in the country,
with 44% (174 Mt) in 2010, the share of construction rose from
5 Mt in 1985 to 9 Mt in 2010, and metal ores and industrial
minerals remained at 5 Mt from 1985 to 2010. The increasing
trend in DMC has been agitated by various domestic and in-
Martinico-Perez et al., MFA and Driving Factors in the Philippines
R E S E A R C H A N D A N A LY S I S
ternational crises. The effects of the Asian Financial Crisis and
changes in natural phenomena brought about by El Niño from
1997 to 1998 on material consumption are evident in the de-
cline of DMC of construction minerals and biomass, as seen in
the DE account. GDP contracted in 1998, accompanied by the
6.6% drop in agricultural production and the 9.5% decline in
construction and construction-related manufacturing in 1998
(Jegillos 2000).
Calculated as imports minus exports, PTB expresses the
physical trade surplus or deficit of an economy. Figure 2a
shows the aggregated trends of imports, exports, and PTB
from 1985 to 2010. The magnitude of both imported and
exported materials in the Philippines increased over the
25 years, and the quantity of imports remained greater than
the exports. PTB grew fourfold, from 6 Mt in 1985 to 21 Mt
in 2010. The positive values indicate the country’s ongo-
ing dependence on other countries to satisfy its material
requirements.
However, these dependencies are centered on specific mate-
rial categories. Figure 2b shows the PTB by material categories.
The Philippines is a net importer of fossil energy carriers, par-
ticularly coal and crude oil, with PTB growth from 8 Mt in 1985
to 24 Mt in 2010. In 2009, the primary energy mix comprised
31.61% imported oil, 9.06% imported coal, 0.10% imported
biofuels, and 59.23% indigenous energy (NEDA 2011). The
country is also a net importer of construction minerals. The
PTB of metal ores and industrial minerals is a negative value,
signifying net exports of 2 Mt in 1985 to 7 Mt in 2010. Export
of metal ores and industrial minerals peaked in the 2006–2007
period, at more than 10 Mt, which can be attributed to poli-
cies and actions to revitalize the mining industry to hasten
5
 R E S E A R C H A N D A N A LY S I S

Table 2 Comparison of DMC/capita with other Asian economies

Selected GDP/capita
countries DMC 1990 Population
in Asia Year tonnes/capita Int. GK$ density

Philippinesa 1985 3.34 1,967 182

2010 4.24 3,024 308
Chinab 1978 3.23 1,039 109
1985 4.34 1,519 112
2008 17.05 6,725 142
Indiac 1994 3.3 1,464 350
2008 4.3 2,952 395
Japand 1960 5.5 3,289 254
2005 13.1 21,575 337

Sources: a This study.

b Schandl and West (2012).
c Singh and colleagues (2012).
d Krausmann et al. (2011); GDP/capita (1990 Int. GK$) from The Maddison

Project (2013) and population density from World Bank Indicators (World
Bank 2014).
DMC = domestic material consumption; GDP = gross domestic product;
Int. GK$ = international Geary–Khamis dollars.

these materials grows in unison with population. Metal ores and

Figure 3 Domestic material consumption per capita in the
Philippines disaggregated to four material categories: (a) in tonnes
per year/capita and (b) in percent of total.
economic growth in the country. Even in the most sluggish
years of this industry, the Philippines has been a net exporter
of metal ores and industrial minerals, as well as semiproduced
materials such as wiring and sections of cathodes of refined
copper.
Discussion
Per-Capita Metabolic Rates
Metabolic rates grew modestly in the Philippines, as shown
by the overall increase of DMC per capita, from 3.34 tonnes in
1985 to 4.24 tonnes in 2010 (figure 3).
Per-capita biomass consumption has been decreasing
throughout the time period examined, implying an ongoing
trend of lower reliance on renewable materials as the country
advances. In contrast, per-capita consumption of construction
minerals has been increasing year on year, both in share and
absolute numbers, indicating that construction material con-
sumption rates are increasing faster than population growth
and showing the growing role of the construction industry
in expanding the country’s material stocks of buildings and
infrastructure.
The per-capita consumption of fossil energy carriers and
ores and minerals remained mostly stable, together accounting
for around 10% of DMC, signifying that total consumption of
industrial minerals in the Philippines mostly end up as exports
and compose a small fraction of DMC, yet it is interesting to
note that the use of fossil energy carriers is remarkably stable,
a very unusual trend for a dynamic and growing economy
at this stage of development. Despite the increasing demand
for energy, the trend of fossil energy carrier consumption
remained low, only reaching 0.37 tonnes per capita in 2010.
This is attributed to the substantial contribution of renewable
energy sources in the primary energy mix of the country. The
Philippines is the second-largest producer of geothermal energy
(in absolute total quantity) for electricity production in the
world, next to the United States (Fridleifsson and Omarsdottir
2013). In 2009, non-fossil-fuel sources of primary energy
mix amounted to 42%, composed of geothermal (22.4%),
hydro (6.15%), biomass (13.59%), wind/solar (0.01%), and
biofuels (0.3%) (NEDA 2011). Fossil fuel production has been
increasing with recent developments in the oil and gas industry
in the country, but extraction is generally in proportion to
total demand. However, a tendency toward increasing fossil
energy consumption in the country is not impossible given
that the country is now focusing on developing more natural
gas and oil fields, as well as growing coal production and
consumption.
Overall, the per-capita DMC trends recall Japan at the on-
set of its rapid economic growth before 1960 (Krausmann et al.
2011) and China before 1985 (Schandl and West 2012), and
are similar to India’s per-capita DMC until a recent accelera-
tion (Singh et al. 2012), indicating that the Philippines may
be on the verge of rapid growth in material consumption as
those countries have undergone, despite differences in other
socioeconomic indicators as shown in table 2.

6 Journal of Industrial Ecology


Figure 4 Trends of (a) growth indices of economic activity, population, and material consumption and (b) comparison of material
consumption and material intensity in the Philippines.
Growth Rates, Material Intensity, and Material
Consumption
Economic activity grew threefold from 1985 to 2010, faster
than material consumption (twofold) and population, as shown
in figure 4a. Until the early 2000s, GDP and DMC grew more
or less in unison, but since then, GDP growth has substantially
taken off. This shows that despite changes in the structure and
scale of activities in the Philippine economy, its aggregated
yearly demand for new materials has been mostly growing in
parallel to GDP over the 25-year period, implying that no abso-
lute decoupling of economic growth from material consumption
has occurred, which is unfortunately unsurprising in a country
at this development phase (UNEP 2013; Giljum et al. 2010).
Further details emerge when observing that the values
of material intensity (material consumption per unit of eco-
nomic activity) and per-capita material consumption (tonnes
per capita) were 3.65 kilograms per U.S. dollar (kg/US$) and
3.24 tonnes/capita in 1985, respectively (figure 4b). Material
consumption has undergone an overall growth and rose to
4.24 tonnes/capita in 2010. In comparison, material intensity
showed an earlier period of increasing values until 1996, in-
dicating losses of efficiency—more material consumption was
required for each unit of economic activity—but from 1997,
there were continuous decreases to almost 3 kg/US$ in 2010,
meaning that the current economy is becoming less resource
intensive than in the previous period, which, if maintained,
would signify a beginning to relative decoupling.
Martinico-Perez et al., MFA and Driving Factors in the Philippines
R E S E A R C H A N D A N A LY S I S
These trends were highly affected by periods of recession that
occurred in regional and global economies, political instability,
as well as natural calamities that are frequent in the country.
The Asian Financial Crisis of 1997 was the single most influen-
tial factor, manifesting its effects in decreased economic growth
and material consumption in 1998. The economic recovery
has been sluggish given that it was continuously challenged by
national and international crises, such as political instability
in 2001 and the global financial crisis in 2008. Nevertheless,
economic growth managed to bounce back with a 7.6% GDP
growth rate in 2010.
Driving Forces of Material Consumption
in the Philippines
With the use of an IPAT analysis, the drivers of resource
consumption, or impact (I), in the Philippines are determined
based on three factors: population (P), affluence (A), and
technology (T). Affluence is defined as GDP/capita whereas
technology is expressed as material intensity (DMC/GDP).
These factors provide the IPAT identity (Commoner 1972;
Ehrlich and Holdren 1972). We look at the percent changes of
these factors at the beginning of a period compared to its end,
which are approximated by log transformations to the equation.
By definition of this transformation, the values of the changes
in P, A, and T sum to the change in I in that period, making
it straightforward to distinguish the relative influence of each
driver on the total change in DMC.
7
 R E S E A R C H A N D A N A LY S I S
Figure 5 Changes in DMC (I) and contributions of driving factors in the Philippines from 1985 to 2010. Impact (DMC); driving factors are
population, affluence (GDP/capita), and technology (material intensity, DMC/GDP). DMC = domestic material consumption; GDP = gross
domestic product; I = impact.
The 25-year period was divided into four, as shown in
figure 5, based on the four transitions or changes in the country’s
political leadership. These different political administrations
embodied various priorities implemented through the Medium
Term Philippine Development Plan. Because the Philippines
endured political transition attributed to martial law up to early
1986, the first 2 years of this compilation were included in the
first period of IPAT analysis; thus, the periods are 1985–1992,
1993–1998, 1999–2004, and 2005–2010.
From one period to the next, the influence of population
has decreased whereas that of affluence has increased. In the
first two periods from 1985 to 1998, population growth was
the main driver of material consumption in the Philippines,
with an annual population growth rate of 2.3%. It decreased
slightly to 2% per year from 2000 to 2007, thus the decline
of its effect on the material consumption in the country.
Affluence became the major driver of material consumption
in the latter decade of this study. Affluence grew at a steady
yet slow rate throughout the 25-year period attributed to the
effects of natural disasters, energy and political crises, as well
as international global and financial crises. Despite an average
growth factor of 1.35 during this period, economic growth
was hampered by the Asian Financial Crisis in 1997 and
worsened by the effects of El Niño that resulted in a drop in
GDP growth rates from 5.4% in 1997 to –0.3% in 1998 (PSY
2000); political crises in 2001 led to a growth rate of 1.76% and
the Global Financial Crisis in 2008 decreased growth to only
0.92% in 2009. Nevertheless, the overall increase in material
consumption driven by economic growth seems to indicate
that the population is changing its lifestyle and consumption
patterns.
Decreasing resource intensity (DMC/GDP) denotes in-
creasing efficiency in material usage, that is, less material is
8 Journal of Industrial Ecology
required to produce a single unit of GDP. This factor has been
negative in all periods except the first, acting as a moderating
factor that counters the effects of P and A on the growth of
consumption. Only in the 1999–2004 period did it manage to
counteract growth in population and affluence, leading to a
smaller growth rate of DMC compared to these two drivers.
In the most recent period, many of these efficiency gains have
been lost, given that, again, DMC has been growing faster than
population and affluence.
Policy Implications
The pattern of material consumption in the Philippines
shows interesting aspects for a high-population-density country
at an early stage of economic development. The moderate
increase in material consumption in the second half of the
monitored period, lower than GDP growth, is attributed to the
active services sector in the country—a good starting point
for the Philippines to enable economic growth with relatively
low physical requirements. The share of manufacturing and
other material-intensive industries in GDP declined in the
Philippines from 35% in 1985 to 32% in 2010, whereas the
service sector is the key contributor to GDP, increasing from
40% in 1985 to 55% in 2010 (World Bank 2014). In particular,
tourism already plays a major role in the services sector, and
in the Philippines, it is centered on its pristine and diverse
natural environment. A community-based, tourism-focused
development strategy can thus provide economic growth
with low inequality and also encourage protection of the
environment. At the same time, although resource-extractive
industries, such as mining and oil and gas industries, are ex-
panding in the Philippines, it is imperative to focus economic
development into less material-intensive industries. Tapping

into power generation from renewable and sustainable sources,
specifically geothermal power, is already remarkable and has
been strengthened by the implementation of the Renewable
Energy Act of 2008, but this momentum must be kept.
The material flow accounts presented in this study provide
quantification of the physical growth of the economy and signal
future waste volumes in the Philippines. The country needs to
prepare for increases of end-of-life materials in upcoming years,
and recycling of these materials should be strengthened and
intensified to reduce the volume of disposal wastes as well as to
reduce future extraction of raw materials.
Resource consumption is expected to continue being driven
less by population and more by economic growth, and these
trends should be acknowledged in policy by focusing on the ef-
fects of increased affluence on material consumption. However,
some trends are hidden by the aggregated nature of per-capita
socioeconomic and material consumption indicators and thus
cannot be directly seen through our approach. Particularly,
income inequality remains high in the Philippines despite the
growing economy. From 0.4822 in 2000, the country’s Gini
coefficient declined only slightly to a value of 0.4641 in 2009
(PIF 2014). This, together with our findings, suggests that
perhaps affluence-driven growth is caused only by a relatively
small subset of the population, which enjoys the material
benefits of increased affluence, no longer buying only basic
daily needs, demanding higher-quality services, and consuming
a greater quantity of resources. For sustainable material usage,
the demographic aspects of economic and material distribution
must be acknowledged in policy.
Given that renewable resources decrease their share in
overall material consumption, resource management should be
geared toward resource efficiency to maximize the productivity
of nonrenewable resources while, at the same time, boosting
GDP growth. However, policy makers should also look into
possible rebound effects, that is, the increase in consumption
because of lowered prices of commodities attributed to fewer
inputs of production (OECD 2014). It is therefore important
to encourage industries to produce value-added products and
strengthen resource-independent industries, such as the ser-
vices sector and tourism activities. The indicators supplied by
the EW-MFA framework and the IPAT driver analysis pre-
sented in this study form an empirical basis for such policies.
Conclusions
This study provides an empirical account of the Philippines’
resource consumption and economic growth, and thus clarifies
past trends in the physical dimensions of economic growth in
the country. Our study filled gaps that existed in previous stud-
ies and provided a longer compilation of material flow accounts
of the Philippines by utilizing country-based estimation param-
eters and primary sources of statistical data, and thus enabled
deeper insight into the trends and drivers of material consump-
tion and policy implications.
Martinico-Perez et al., MFA and Driving Factors in the Philippines
R E S E A R C H A N D A N A LY S I S
The Philippines, as a high-density developing country, shows
a metabolic pattern that is distinctive to developing countries
that mostly consume biomass and nonmetallic minerals (Giljum
et al. 2010). With increasing demand for construction miner-
als, the Philippines is inclined toward a nonrenewable material-
based economy, ending the historical dominance of renewable
materials. Growth in the consumption of fossil energy carri-
ers has been remarkably modest because of the Philippines’
geothermal energy production. The per-capita metabolic
rate in the Philippines showed only modest growth, from
3.34 tonnes per capita in 1985 to 4.24 tonnes per capita in
2010, whereas per-capita consumption of construction miner-
als increased threefold, showing the growing importance of con-
struction in the Philippine economy. Our analysis shows that
growing affluence has overtaken population growth as the major
driver of resource consumption, calling for increased focus on
sustainable economic growth in policy. Specifically, the improv-
ing average affluence in the country does not necessarily mani-
fest itself in equal distribution of the consumption of these mate-
rials, which must be addressed, and sectors that are not resource
intensive, such as tourism, should be strengthened. At this point
in time, the country’s per-capita DMC levels are similar to those
that other East Asian and South Asian countries—namely,
Japan, China, and India—had on the verge of their growth-
surge phases. The Philippines might already be on a course to
follow these countries’ trends in upcoming years, and the current
period may be the calm before the storm, so to speak—a window
of opportunity to plan a more resource-efficient growth strategy.
Acknowledgments
This research was financially supported by the Environment
Research and Technology Development Funds (1-1402, 2-
1404) of the Ministry of Environment, Japan, and KAKENHI
(B) 26281056. The authors are also grateful to Heinz Schandl
and Karin Hosking of CSIRO for technical help and four
anonymous reviewers for their valuable comments.
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About the Authors
Marianne Faith G. Martinico-Perez is a researcher and
graduate student at the Graduate School of Environmental
Studies of Nagoya University (Nagoya, Japan) and works as
project development officer at the Palawan Council for Sus-
tainable Development (PCSD) in Puerto Princesa City, Philip-
pines. Tomer Fishman is a researcher at the Graduate School of
Environmental Studies of Nagoya University. Keijiro Okuoka
is an assistant professor at the Graduate School of Environmen-
tal Studies of Nagoya University. Hiroki Tanikawa is professor
of environmental systems research at the Graduate School of
Environmental Studies of Nagoya University.
11