International Journal of Research in Engineering, Science and Management 85

Volume 5, Issue 11, November 2022

https://www.ijresm.com | ISSN (Online): 2581-5792

Implications of Philippine National Output,

Population, and Business Establishments to
Natural Resources Depletion
Ma. Therese Joy Certeza1, Laurice Isabel R. Laynes2*, Benedict T. Miranda3, Marie Antoinette L. Rosete4
1,2,3,4
Department of Business Economics, College of Commerce and Business Administration, University of Santo Tomas, Manila, Philippines

Abstract: Natural resources depletion in the Philippines is a The negative state of our environment and depleting natural
growing concern brought about by different economic indicators resources are the result of, among other things, a lack of
that resulted in its current status. This study aimed to identify the
environmental knowledge and policies, a sharp rise in
relationship between the different economic indicators namely
GDP, Population, and Business Establishments to Natural population, unsustainable manufacturing and urbanization
Resources Depletion. The aforementioned variables were practices, trade and industrialization, and emerging countries'
examined, and the theory of the Environmental Kuznets Curve hasty attempts to catch up with rich nations (Byaro et al., 2021).
was applied to further describe this relation. With reference to With this, economic, social, and environmental expenses will
previous studies by Abdul Ghafoor Awan and Humaira Liaqat rise, while productivity will fall, eventually leading to slower
(2021) under similar backgrounds used in the study, the
economic growth (Mittal & Gupta, 2015). The growing demand
Augmented Dickey-Fuller Test, Engle-Granger Two-Step Method,
and the Ordinary Least Squares (OLS) Regression were used. The for social and economic development has led to drastic changes
results showed that GDP and Business Establishments have a in production and consumption growth, resulting in the
significant negative effect on the depletion of natural resources, exploitation of natural resources and environmental
while Population has a significant positive effect. The concept of degradation (Geng et al., 2022).
the Environmental Kuznets Curve supports the findings about the According to The World Bank, net forest, energy, and
Philippines' GDP and Natural Resources Depletion. This study
mineral depletion make up natural resource depletion.
contributes to the policy-making sector as it can be used as the
basis of environmental and industrial laws and recommendations Implementing policies and programs for managing the
to government agencies and officials, as well as provide suggestions environment and natural resources falls under the purview of
to future researchers of studies related to the economic the Environmental Management Bureau (EMB) in the
implications to natural resources depletion. Philippines. It aims to protect the environment by promoting
economic viability, environmental integrity, and excellent
Keywords: Business establishments, GDP, Natural resources public health. It oversees the National Greening Program,
depletion, Population, Environmental Kuznets curve.
Cadastral Survey and Land Management, Geo-hazard
Assessment and Mapping, Ecosystems Research, Forest
1. Introduction
Protection or Total Logging Ban, Protected Areas and
Natural resources are naturally occurring resources found in Biodiversity Management, Mining Regulation, Geo-hazard
the environment that are used and usable by man. Resources Assessment and Mapping, and Good Governance (DENR,
like minerals, farmland, timber, and marine and coastal 2016). Republic Act No. 7942, also known as the Philippine
resources are abundant in the Philippines. An estimated 19.3 Mining Act of 1995, was implemented, which instituted a new
billion metric tons (MT) of nonmetal mineral deposits and more system of mineral resources exploration, development,
than 21.5 billion MT of metal deposits can be found in the utilization, and conservation. Many parts of the country are
Philippines (AZO Mining, 2012). These natural resources under a logging ban, and sustainable logging is only permitted
contribute to the country’s GDP growth. However, there are in a few places to preserve its natural resources. However, there
growing concerns about the sustainability of these resources are still many places where illegal mining, fishing, and logging
since most of them are rapidly deteriorating (Herbst, 2020). are done, and many corporations and businesses get away with
Consumption patterns for resources vary across developed these.
and developing countries due to differences in wants, needs, A country's GDP, population, and business establishments
and quality of life. Due to the modernization and innovation of contribute to natural resources depletion. According to Magdoff
new products, their life cycles get shorter, and more products (2013), for capitalist countries, growing populations are
are entering trade, which results in hyperproduction and significant to stimulate economic profit. With that, economies
consumption that cause high raw material and energy usage, rely on their natural resources to suffice their growing
particularly in developed countries (Martins & Castro, 2020).
*Corresponding author: lauriceisabellaynes@gmail.com
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population and its needs. Capitalism fuel industrialization, assessing the current situation of natural resources depletion in
urbanization, and modernization, causing the emergence of the Philippines presents a picture of the country’s economic
different ecological problems (Lynch et al., 2013). Economic aspect as it highlights the occurring issues that need to be
growth from industrialization, urbanization, and modernization addressed. Through this study, the main objective is to measure
is related to better education and technological advancements, how the country’s economic production, population and,
which can contribute to resolving ecological problems. business establishments influence the depletion of natural
When there is more economic activity taking place, natural resources and conclude what it suggests with the country’s
resources are depleted. Production and consumption patterns of economic system.
different firms and individuals contribute to a country's From the perspective of sustainable development, ensuring
depletion of natural resources. The amount of natural resources an adequate economic and social demand for exhaustible
depletion reflects the country's different kinds of economic resources is essential to prevent predatory exploitation avoiding
activity and economic outputs. In an economy, people's wants resource depletion faced by the future generation caused by
and needs are key factors that affect what natural resources are excessive exploitation (Wei & Kangping, 2012). Having
extracted and used. Creating a socioeconomic system that meets responsibility for the environment should be not only a
everyone's basic needs and wants plays a significant role in government responsibility but local people and leaders should
molding a modest society, with economic and political also be encouraged to take steps to end environmental problems
decisions resolved in respect of all creation (Magdoff, 2022). (Sarbapriya & Ray, 2011). Giving importance to providing
In the view of households, natural resources are the source of information about environmentally conscious activities such as
livelihood and basic needs. Rural households rely on forest- and recycling and waste minimization in a culturally and
land-related activities such as logging and agriculture for emotionally suitable manner should be emphasized (Mansaray-
livelihood (Tsai et al., 2019). Rural households have more Pearce, 2019). With several stakeholders in society accounting
direct access to natural resources than urban households. In for an organized waste management system, harmful
cities, rapid and unplanned urbanization and migration cause consequences due to increasing waste regard policy-making
environmental problems such as air and water pollution and implications recognizing government waste management
changes in forest resources. Urban households have problems formulation indispensable.
with safe drinking water and proper sanitation due to In its practical sense, the contribution of this study to the
contaminated water from urban slums (Ray, 2011). government and authoritative bodies is for the development of
Individual behavior and culture contribute to environmental efficient and sustainable natural resource management. The
injustices. If the government does not commit to restraining lack of related studies that focus on the significance of
resource consumption and individuals' consuming behavior is determining economic performance as the main input
not regulated over instant gratification and satisfaction, it will concluding the amount of natural resource depletion within
result in excessive exploitation and overuse of exhaustible specific areas in the country, initiates the necessity for
resources, endangering sustainable development (Wei & understanding the role of human economic activity as a factor
Kangping, 2013). The proliferation of natural resource of natural resource depletion management. Therefore, results
depletion, as well as wrong societal views regarding natural and findings generated through this study aspire to enrich
resources, have a detrimental impact on a wide range of related works in the academe in relation to economic analysis
socioeconomic factors. for the depletion of natural resources under economic factors.
In the past years, almost 85% of the world’s population has The rest of the paper is outlined as follows: Section 2
been facing excessive ecological problems, where resource includes the review of related literature, which presents the
consumption in the view of material footprint shows the rate of relationship between natural resource depletion among
depletion in terms of gaze land and too much carbon emission economic output indicators and hypothesis formulation.
from fossil fuels (Geng et al., 2022). Illness caused by Illustrated in Section 3 is the research methodology. Section 4
environmental degradation and contamination of hazardous analyzes the obtained results for discussion. Finally, Section 5
substances brings losses to the country due to reduction in labor provides the summary, concludes, and discusses
productivity. Additionally, financing expenditures for social recommendations for natural resources policy implications
security increased due to the deterioration of the environment according to the findings of the study.
and the need for aid to such groups of the population (Koval,
2019). 2. Literature Review
This study focuses on the relationship between the economic
A. Natural Resources Depletion and GDP
output of the Philippines and the depletion of natural resources
by analyzing key economic indicators such as Gross Domestic Economic growth is the increase in the inflation-adjusted
Product (GDP), population, and business establishments. The market value of services and products produced in an economy
role of different economic actors in the depletion of natural over a specified period. It is referred to as the measurement of
resources speaks so much about a country’s productive activity the total amount of increase in GDP or Real GDP. The function
and capacity. The behavior of these economic actors altogether of the demand and supply of natural resources is their
brings significant challenges related to natural resources, which availability. An increasing demand trend occurs due to
is a frequent problem in developing countries. In this study, countries' efforts to acquire improved living standards and
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 87

higher economic growth. On the other hand, the predictability Industrial development, resources, and the environment all
of supply depends on the scarcity of different natural resources interact with each other. Industrial labor requires capital, labor,
that leads to risks at some point of no return in terms of and resource inputs, while energy resources are the driving
environmental degradation. (Nawaz et al., 2019). In relation to force for processing and manufacturing. Excessive
this, according to Awan and Liaqat, 2021, A challenge currently consumption of resources leads to environmental degradation,
faced by most countries today is to sustain economic growth which gives rise to unsustainable production as waste generated
rates while at the same time minimizing its impact on the from industrial production is released to nature, imposing a
environment. heavy environmental burden (Wang et al., 2022). Disregarding
Earth system sciences combined with economics is essential environmental depletion as an impact of economic growth on
for understanding both the positive and negative impacts of waste generation has been severely challenging since waste
involved trade-offs and alternatives. Applying principles in generation has adverse effects on health, the environment,
economics and empirical findings is necessary to meet plans for socio-economic contributions, and climate change. The recent
a good life for humanity and the earth's limited resources increase in population and development of cities and regions
(Polasky et al., 2019). The inquiry on whether society can matched with spiraling consumption resulting in the large
detangle the relationship between economic growth in terms of quantities of waste generated, heightened pressure on economic
GDP from environmental impacts still needs to be settled. resources and the environment (Gardiner & Hajek, 2020).
Extended to the general public is the divide over the coexistence Intensive use of natural resources to support the needs of the
of economic growth and environmental limitations under urban economy requires excessive energy resources (including
differing opinions on decoupling, dematerialization, and limits firewood), quarry exploitation, extensive sand and gravel
to growth (Ward et al., 2016). excavation, and overconsumption of water. All aforementioned
The growing population impacts the demand and supply of bring harm to natural support systems and irreversible damage
consumer products and services and other ecosystems, allowing to ecosystem functions such as the water cycle, carbon cycle,
industries to integrate closely with production and consumption and biodiversity, including a decrease in the number of
(Lakatos et al., 2018). According to studies reviewed by available resources. As a result, other effects, such as pollution
Othman and Jafari in 2012, the GDP indicator can effectively and harm to human health, may be experienced in the years to
capture the benefits of resource extraction that are associated come (Awan & Liaqat, 2021). When the market fails to regulate
with the economy’s products. Even so, the changes occurring the industry, benchmarking and monitoring the efficiency of
in stocks of natural assets are clearly omitted from GDP. decisions made by industrial decision-making units becomes
Human activities such as the production and consumption, and critical (Ichinose et al., 2013).
dissemination of different goods in society produce byproducts Changes in consumer behavior, business operations, and
of solid waste (Balasubramanian, 2020). The surge in societal education are necessary to reduce the manufacturing of
environmental pollution caused by the expeditious growth in goods related to greenhouse gas emissions (Lakatos et al.,
production and consumption poses a challenge to reaching 2018). The new way of thinking about sustainable growth in
sustainable goals. Simultaneously, the increasing demand for developing countries is through the circular economy. Unlike
social and economic development has led to the consumption the linear economy, where the concept is based on "take, make,
of different natural resources above their capacity (Geng et al., consume and discard," the circular economy manages waste
2022). based on the 3R approach, "Reduce, Reuse and Recycle, which
Some economic theories reviewed by Reikhof et al. (2016) also considers improved product design and practices
claim that optimal resource use is related to interest rates. If considering waste as an efficient resource material (Cheela et
interest rates become higher than the maximal reproduction rate al., 2021).
of a resource, resource depletion becomes optimal. In the view One among the 17 UN SDGs mentions GDP but qualifies it
of the general equilibrium perspective, interest rates are as "inclusive and sustainable growth." It has been clear that
significantly correlated with GDP growth rates which, in turn, GDP growth has been getting worse for most countries over the
are related to trade. The relationship between GDP and natural last decades. For sustainability to be attained under GDP
resource depletion also exhibited their linkages in some studies growth, there must be a decoupling from energy and material
reviewed by Raihan & Tuspekova (2022). Empirical findings use and environmental impacts (Ward et al., 2016). Earth's
indicate that economic growth depletes environmental quality. natural resources, the foundation of raw material
In congruence, other studies reviewed by (Gardiner & Hajek., manufacturing, should be handled sustainably so that the
2020) showed recent findings suggesting that regional economic system can provide higher-value output with less
economic environments strikingly affect the interdependence input. Waste management initiatives focusing on resource
between economic growth and environmental quality. In this efficiency and income from recycling could result in long-term
example would be the increase in production factors such as business and career prospects (Bartolacci et al., 2019). In the
employment and capital contributing to both production and commodity resource market, responsible production and
consumption but as well as industrial pollution. On the other consumption stand to improve industrial quality that absorbs
hand, according to a study by Lee et al., 2021, continued the immense population growth in carrying out their demands
economic growth decreases resource depletion and is helpful in at the domestic and international levels. Ecological
attaining a green developmental agenda. sustainability standards should be applied to help take care of
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natural ecosystems, and Pareto efficient situations can be activities contribute to a variety of environmental issues,
achieved whenever the natural resources are efficiently including pollution, environmental deterioration, natural
managed (Lee et al., 2021). resources depletion, and climate change.
Material consumption is boosted by soaring economic Arnould et al. (2017) stated that the national government
growth, and economic structural transformation alarms the must improve national resource governance to create and
achievement of environmental sustainability. The relationship enforce necessary regulations and implement sustainable
between economic growth, urbanization, and industrialization development processes to develop environmentally sustainable
also adds immense pressure to the demand for natural resources production that provides benefits to the population.
and gathering (Geng et al., 2022). The main issue with the Furthermore, the government should take steps to undertake
market's participation in environmental challenges is its lack of population control programs, particularly in developing
morals. While millions of people are affected by the trash nations, to reduce the strain on already overburdened resources
produced by this sector, and ecosystems are irreversibly and to adopt better methods for economic and scarce resource
destroyed, such practices persist because governments, allocation, as recommended by Komu & Ethelberg (2015).
corporations, and landowners earn significantly from them. Not Furthermore, Awan & Liaqat (2021) elaborated that failure to
only do these industrial players profit from the sale of their control human growth and development due to a lack of urban
products, but much of their profit is directly related to the trash planning and government legislation may result in a population
produced and the pollution caused by it (Van Dartel & Nitgen, explosion, environmental pollution and deterioration, rapid
2018). consumption of natural resources, high waste generation, and a
H1: Increases in Philippines’ GDP have no significant effect variety of health problems.
on Philippines’ natural resources depletion. Landfills and incinerators were used to dispose of waste
created by households and firms (Gardiner & Hajek, 2020).
B. Natural Resources Depletion and Population
Landfills are the most acceptable disposal method in the
According to Kumar (2016), urbanization has intensified in Philippines because incineration is already prohibited under RA
recent years, placing immense pressure on local governments 9003 due to the harmful pollutants created by facilities (Sapuay,
to keep up with fast population growth, changing lifestyles, and 2016). However, according to Song et al. (2022), over-reliance
demand for a standard of living. Natural growth and rural-urban on landfilling and improper waste disposal have long produced
migration account for most urban population growth, according financial, environmental, and health problems. Population
to Atta-ur-Rahman et al. (2016) and March et al. (2016). People expansion is associated with increased waste creation, and with
from rural areas frequently migrate to cities in search of a better a lack of waste management knowledge, men may dispose of
quality of life and higher-paying jobs (Kumar, 2016). Rural-to- waste indiscriminately straight into bodies of water, causing
urban migration drives urban population growth in developed water and soil contamination which may become unsuitable for
countries, but urban natural population growth has catapulted consumption and utilization (Ochola, 2018).
urban population growth in developing countries in recent Because of urbanization and population expansion,
years, according to Farrell (2017). Furthermore, he also stated municipal solid waste generation has become a severe issue for
that modern health procedures, substantial birth rates, and society, the economy, and the environment (Rathore et al.,
significant advances in health care owing to imported 2020). And according to Khan et al. (2022), one of society's
medicines and technology result in considerable declines in the current and future concerns has been the steady growth in the
death rate and significant growth in the birth rate. volume and complexity of urban and industrial waste.
However, based on the studies of Niva et al. (2019), Jiusto According to Guerrero et al. (2013) and Hemidat et al. (2022),
(2012), and Brueckner & Lall (2015), there is a growth in urban the private and public sectors must collaborate through public-
poor and informal settlements as people migrate from rural to private partnerships (PPP) to ensure the technical, financial, and
urban areas. Furthermore, as Datta (2012) pointed out, rural- social sustainability of the integrated solid waste management
urban migrants were typically marginalized and could only system. Furthermore, rural development is crucial to addressing
afford informal and unauthorized housing due to their low- the influx of migrants (Brueckner & Lall, 2015). According to
paying and informal jobs. According to Kuddus et al. (2020), Kuddus et al. (2020), if rural conditions do not improve, people
most urban poor live in unregulated and overcrowded slums, will continue to migrate to urban areas; therefore, governments
near open sewers and in hazardous areas such as slopes, and development organizations should adapt to urbanization
riverbanks, and water basins prone to landslides, flooding, or challenges while aiming to reduce unplanned urbanization.
industrial hazards. Additionally, regulating birth rates is essential for population
According to Bassi et al. (2021), as the population grows due growth. Increased consumption may negatively affect the
to urbanization, there will be an increase in consumption, environment (Weber & Sciubba, 2018). Local governments can
resulting in higher demand for goods and higher production. respond to the increase in natural growth by initiating and
Unsustainable and irresponsible production and consumption reinforcing family planning programs, introducing economic
wreak havoc on the environment's resources as elaborated by incentives or disincentives, providing quality sex education,
Lee et al. (2021). Gardiner & Hajek (2020), Bassi et al. (2021), and elevating and empowering women (Farrell, 2017).
Atta-ur-ahman et al. (2016), Barik (2019), and Lee et al. (2021) There is a positive relationship between population and
all stated that rapid population growth hampers economic natural resource depletion. As the number of people who
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migrate from rural to urban areas grows and the urban birth rate identified (Pires et al., 2019). According to Ghisellini et al.
steadily increases, so does the quantity of natural resource (2016), a CE makes efficient and environmentally friendly use
depletion since there is greater demand for goods and services of resources to create a greener economy with new business
owing to increased consumption, which increases production. models and job opportunities. Despite being considered a new
Overall, increased urbanization and population cause serious business model, there are many expectations of CE leading to a
environmental problems due to high demand (Xu & Lin, 2016). more sustainable development and a harmonious society. It
H2: Increases in the Philippines' population have no provides a solid framework for fundamentally altering the
significant effect on the Philippines' natural resources current business model in order to promote preventive and
depletion. regenerative eco-industrial development and greater welfare
(Ghisellini et al., 2016). However, merely relying on the
C. Natural Resources Depletion and Business Establishments
advantages of having a CE will not directly result in the concept
In recent years, as the population and urbanization have of CE being widely accepted. It will require awareness and
increased, so has household consumption (Pires et al., 2019). education campaigns for people to change their consumption
This factor pushes businesses to increase in order to profit from habits. (Lakatos et.al., 2018).
increased demand for goods and services. As mentioned by Investing in sustainable business practices of companies
Shahab et al. (2022), environmental responsibility is an agency depends on the structure and the administration of the board of
issue that extracts private gains, and the social responsibility of directors on essential aspects such as the organization’s capital
business is really to maximize profits. If the wealth and number (Shahab et al., 2022). In transitioning towards the concept of a
of people living and working in cities continue to expand, and circular economy, the use of innovative business models,
businesses remain ignorant of waste issues, the amount of product and organizational environmental footprints, and green
garbage generated per person and the amount of waste produced public procurement must be established to boost demand for
by businesses will climb significantly (Sharma et al., 2021). As green goods and services (Gardiner & Hajek, 2020). To attain
a result, several types of environmental stress have emerged, the upcycling concept, the industry must avoid using toxic
such as pollution, waste landfills, environmental degradation, materials and substances, recycle and upcycle to prolong the
and natural resource depletion (Koval, 2019). usage life of their manufactured products, use less energy and
In order to meet the demands of the growing population, water, and provide their workers with a fair salary (Pires et al.,
more businesses are established, and companies across the 2019). Modern society necessitates a paradigm shift so societal
globe take part in immense production which uses large and industry limitations can focus on significant
amounts of natural resources (Shahab et al., 2022). Renewable transformation. Moreover, consumer practices, as identified by
resources are significant exports, especially in developing various approaches, play a major role in waste and resource
countries. However, the majority of the people are still not management, which is why consumer responsibility in
aware of the limit of trade to prevent it from contributing to sustainability is crucial to prevent waste and resource depletion
resource depletion (Eisenbarth, 2022). All economic activities (Rajadesingu et al., 2021). Prakash et al. (2022) stated that
depend on natural energy and resources. Due to the rise of people have become more aware of the situation of our natural
capitalism, urbanization, and industrialization, societies face resources, and industries have started to adopt green practices.
sustainability issues such as climate change, biodiversity loss, Studies by Xu & Lin (2016) and Ali et al. (2021) also found that
and water scarcity, leading to resource depletion (Figge & technological advancements and industrial structure
Hahn, 2020). Economic growth is directly related to resource optimization result in the gradual decrease of natural resources
exploitation, and social development leads to excessive use of depletion.
resources that exceeds the possibility for resource regeneration H3: Increases in Philippines' number of business
(Chen et al., 2022). establishments have no significant effect on Philippines' natural
According to Rajadesingu et al. (2021), businesses' lack of resources depletion.
initiative in combating the consequences of their operations on
waste promotes the rising risk of tripping over a tipping point D. Synthesis
into irreversible pollution and climate change impacts. Significant changes in the economic variables discussed in
However, consumer behavior is a significant factor that is related studies showed their implications on natural resource
considered in all business decisions. According to Lakatos et al. depletion. Increases in GDP, population, and business
(2018), consumer attitudes toward the environment, as well as establishments affect natural resources depletion, conveying
the adoption of new behavior models and responsible their relationship. Related studies mentioned the relationship
consumption of businesses, have a significant, if not the most between natural resources and population and observed that a
important, role. growth in population leads to an increase in consumption and
Van Dartel & Nitgen (2018) mentioned that several production, which significantly impacts environmental
economists, sociologists, and philosophers’ targets to produce depletion. The study by Awan & Liaqat (2021) has investigated
economic models that are sustainable than our existing and found that a high population growth rate and urbanization
capitalistic one. In a circular economy (CE), the private affect the depletion of natural resources in Pakistan. They have
business and regulators bear the responsibilities, while in also discovered that these two variables have resulted in the
sustainability, although shared, obligations are not explicitly exhaustion of more than one-third of Pakistan’s natural
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resources. Byaro et al. (2021) also highlighted that growth, have no significant effect on the country’s natural
industrialization, trade, and economic growth contribute to resources depletion.
environmental degradation in sub-Saharan Africa. Both independent and dependent variables used in this study
Relationships between economic variables showed their role were all sourced from the world bank annually from 1990 to
in economic development, but along with this is its contribution 2020. The first independent variable is the Real GDP,
to natural resources depletion. Increases in economic represented by the Philippine GDP (constant 2015 US$) data.
productivity can cause environmental problems owing to the The second independent variable, Population, is represented by
exploitation of natural resources and ineffective waste disposal the total Philippine Population data, while the third independent
and management systems. Changes in business establishments variable, Business Establishments, represents the list of
can alter the production and consumption patterns of domestic companies in the Philippine data. The dependent
individuals, households, corporations, and the government. If variable, Natural Resource Degradation, is represented by the
population growth continues, it has the potential to drastically data for adjusted savings: natural resources depletion (% of
expand the population level, creating a significant impact on the GNI), which is the sum of net forest depletion, energy
environment. As these variables rise, they contribute depletion, and mineral depletion. In this study, the researchers
significantly to economic growth; however, not all growth chose to examine the Philippines due to data availability and
portrays a positive effect. Corporations and governments relevance to the country's current situation.
benefit from higher economic growth, but it discourages In studying the relationship between economic actors and
policymakers from acting and enacting laws addressing the natural resource depletion, the study employed the Augmented
problem of depletion of natural resources. Authorities and the Dickey-Fuller Test to test the stationarity of the variables. This
government play a big role in assessing these environmental was followed by the Engle-Granger Two-Step Method to test
issues resulting from economic activities. On the other hand, the cointegration of variables. Finally, in proving the
the positive effects of economic growth can also lead to the Environmental Kuznets Curve (EKC) application in the study,
sustainability of natural resources using green technology and Ordinary Least Squares (OLS) Regression was used to estimate
industrial innovations. With the growing concern, the different the coefficients of linear regression equations to analyze the
aspects of how economic actors affect natural resource relationship between the time-series data of the dependent
depletion is a significant issue that needs to be addressed. variable and the three independent variables. In reference to the
previous related study of Ghazi Alajmi (2016), the model for
E. Theoretical Framework
measuring the effects of economic growth variables on Natural
GDP, Urbanization, and Employment are factors affecting Resources Depletion was derived from the functions below:
the depletion of natural resources. In this study, researchers will
use the Environmental Kuznets Curve (EKC) hypothesis. The NRDt = f (GDP) (1)
EKC’s original concept was developed by Grossman and NRDt = f (POP) (2)
Krueger in 1991, and this has been used to show the relationship NRDt = f (BE) (3)
between the economy and the environment (Chen et al., 2022). NRDt = f (GDP, POP, BE) (4)
The hypothesis of the EKC expresses that environmental
degradation increases with income during the early phases of The functional forms of the Unit Root Test:
economic growth but then declines with income after a certain
threshold (Badeeb et al., 2020). NRDt = α + β1 GDPt + ɛt (5)
F. Simulacrum NRDt = α + β1 POPt + ɛt (6)
NRDt = α + β1 BEt + ɛt (7)
NRDt = α + β1 GDPt + β2 POPt + β3 BEt + ɛt (8)

where:
NRD = Natural Resources Depletion (Dependent)
GDP = Gross Domestic Product (Independent)
POP = Population (Independent)
BE = Business Establishments (Independent)
α = Intercept
β1&β2&β3 = Elasticity Coefficients
ɛ = Error Term
Fig. 1. Simulacrum t = Time

3. Research Method 4. Results & Discussion

This research aimed to determine if the Gross Domestic In this study, the researchers aim to determine the
Product (GDP), Population, and Business Establishments in the relationship between economic indicators and natural resource
Philippines, which will serve as a measurement of economic depletion by measuring the influence of three economic
variables. Independent variables, Real GDP, represented by the
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Philippine GDP (constant 2015 US$) data, Population, 1.0958e+08. The population's standard deviation is 1.4577e+0,
represented by the total Philippine Population data, and and the coefficient of variation is 0.16952, suggesting that the
Business Establishments, represented by the list of domestic observations are widely spread.
companies in the Philippines data, were measured against the The average number of Business Establishments is 230.81
dependent variable, Natural Resources Depletion, which is and 50% of the sample size has Business Establishments of
represented by the data for adjusted savings: natural resources 235.00 and below, while the remaining half has Business
depletion (% of GNI). In coming up with results, researchers Establishments of 235.00 and above. The minimum Business
used time series data from 1990 to 2020, all sourced from the Establishments of the data is 153.00 and the maximum Business
World Bank open data. The researchers employed the Unit Root Establishments is 268.00. The standard deviation of Business
Test using the Augmented Dickey-Fuller Test, followed by the Establishments is 31.817 and has a coefficient of variation of
Engle-Granger Two-Step Method to test cointegration among 0.14, indicating that the observation is widely dispersed.
variables. The researchers used the Vector Error Correction All the data has less variability and has platykurtic kurtosis.
Model (VECM) and the Ordinary Least Squares (OLS) On the other hand, in terms of skewness, Natural Resources
Regression method to prove the relationship further. Moreover, Depletion and the Gross Domestic Product are positively
to demonstrate the relation of the study's theoretical foundation, skewed, while Population and Business Establishments are
the Environmental Kuznets Curve (EKC), researchers also negatively skewed.
plotted a curve with data from natural resource depletion and 2) Correlation between variables
Real GDP. HO = There is no significant linear relationship between the
two variables.
A. Results
HA = There is a significant linear relationship between the
1) Summary statistics two variables.
Table 1 shows the descriptive data on the summary statistics Table 2
of variables reflected by Gretl data analysis software. It shows Correlation between NRD & GDP, POP and BE
that Natural Resource Depletion has a mean of 0.47 and a Variable Correlation Coefficient P-value
NRD & GDP 0.2995 0.1017
median of 0.35, with a standard deviation of 0.51 and a NRD & POP 0.4133 0.0208
coefficient of variation of 1.09, which means 50% or less of the NRD & BE 0.3736 0.0384
observations lie below 0.35 that the standard deviation is equal
to the mean. The correlation coefficient between NRD & GDP is at
The average number of GDP is 2.0490e+1 and 50% of the 0.2995, which is higher than its P-value of 0.1017, showing the
sample size has a GDP of 1.7937e+11 and below, while the variable’s goodness of fit. In this case, the null hypothesis is
remaining half has a GDP of 1.7937e+11 and above. The rejected and there is a linear relationship between NRD & GDP.
minimum GDP of the data is 1.0664e+11 and the maximum In table 2, the NRD & POP computed correlation coefficient
GDP is 3.9622e+11. The standard deviation of GDP is resulted in 0.4133, which is higher than its P-value of 0.0208.
8.9355e+10 and has a coefficient of variation of 0.43608, This relationship among variables shows a significant fit for the
indicating that the observation is widely dispersed. model, confirming the need to reject the null hypothesis. On the
The population has a mean of 8.5985e+07 and a median of other hand, the resulting correlation coefficient between NRD
8.6326e+07, indicating that 50% or less of the observations fall & BE is at 0.3736 higher than its P-value at 0.0384. Researchers
below 8.6326e+07. Furthermore, Population has a minimum reject the null hypothesis and conclude a possibility of a linear
observation of 6.1895e+07 and a maximum observation of relationship between variables.
Table 1
Summary Statistics of Variables
NRD GDP POP BE
Mean 0.46912 2.0490e+1 8.5985e+07 230.81
Median 0.34505 1.7937e+11 8.6326e+07 235.00
Standard Deviation 0.50937 8.9355e+10 1.4577e+0 31.817
Coefficient of Variation 1.0858 0.43608 0.16952 0.13785
Minimum 0.038789 1.0664e+11 6.1895e+07 153.00
Maximum 2.0709 3.9622e+11 1.0958e+08 268.00
Skewness 1.7674 0.72006 -0.025057 -1.0455
E. Kurtosis 2.7427 -0.72791 -1.2152 0.21283
5% Perc 0.042246 1.0691e+11 6.2831e+07 157.80
95% Perc 1.9517 3.8252e+11 1.0870e+08 266.20
IQ range 0.52464 1.3858e+11 2.5841e+07 33.000

Table 3
Augmented Dickey-Fuller Test
Variable P-value First differences C First differences C+T Second differences W/O C
NRD 0.105 3.235e-09* 5.025e-08* 1.507e-13*
GDP 0.9971 0.1858 0.693 0.007251*
POP 9.856e-05* 0.9957 0.03512* 0.08559
BE 1.026e-06* 0.2059 0.2533 2.747e-06*
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 92

Table 4
Engle Granger Test
Null Hypothesis Probability Decision
Reject null
Increases in the Philippines' GDP has no significant effect on the Philippines' natural resources depletion. 2.882e-08
Hypothesis
Reject null
Increases in the Philippines' population has no significant effect on the Philippines' natural resources depletion. 1.443e-08
Hypothesis
Increases in the Philippines' number of business establishments has no significant effect on Philippines' natural Reject null
2.216e-08
resources depletion. Hypothesis
Increases in the Philippines' GDP, population, and number of business establishments have no significant effect on Reject null
3.513e-07
Philippines' natural resources depletion. Hypothesis

Table 5
OLS Regression Estimates
Variables Estimate Standard Error T-value P-value
NRD −3.45604 1.03344 −3.344 0.0024
GDP −1.28937e-11 3.97781e-12 −3.241 0.0032
POP 1.33197e-07 3.85117e-08 3.459 0.0018
BE −0.0211682 0.00897281 −2.359 0.0258

Table 6
OLS Regression Fit Statistics
Mean dependent var 0.469122 S.D. dependent var 0.509369
Sum squared resid 4.640136 S.E. of regression 0.414556
R-squared 0.403866 Adjusted R-squared 0.337629
F(3, 27) 6.097285 P-value(F) 0.002632
Log-likelihood −14.54882 Akaike criterion 37.09764
Schwarz criterion 42.83359 Hannan-Quinn 38.96741
rho 0.257227 Durbin-Watson 1.445236
All three independent variables are higher than their p-value 4) Engle Granger test
which is why the null hypothesis that there is no correlation HO = There is no cointegration among variables.
against natural resource depletion is rejected, concluding the HA = There is cointegration among variables.
acceptance of the alternative hypothesis that there is correlation The Engle Granger test for cointegration was used to set up
between variables. residuals for any presence of a unit root. If there is a unit root,
3) Cointegration test then there is no cointegration among variables. This test was
HO = There is no significant linear relationship between the used under stationary data confirmed through the Augmented
two variables. Dickey Fuller test. Table 4 reports that all variables, GDP,
HA = There is a significant linear relationship between the Population, and Business Establishments, have a p-value less
two variables. than 0.05 alpha, thus rejecting the null hypothesis and accepting
Note: * denotes rejection at 5%. C: represents test with the alternative that there is cointegration among variables.
constant, C+T: represents test with constant and trend, W/O C: Results imply that since the variables are cointegrated and they
represents test without constant. NRD is Natural Resource confirm that the variables used are stationarity.
Depletion, GDP is Gross Domestic Product, POP is Population 5) Ordinary Least Squares
Growth, and BE is Business Establishments. Gretl was used in modeling the Ordinary Least Squares for
In proving cointegration between variables and Natural the data in order to describe the relationship between the
resource depletion, Unit root test using the Augmented Dickey- Independent Variable GDP, Population and Business
Fuller test was applied by the researchers. Stationarity in data Establishments with the dependent variable, Natural Resource
of the time series variables indicates that the characteristics of Depletion.
the variables are not changing over time which is an important HO = There is no significant relationship between an
condition in cointegrating variables. The Augmented Dickey- independent variable and Natural Resources Depletion.
Fuller test was chosen in testing for the unit root to help HA = There is a significant relationship between an
determine the stationarity of the data. Table 3 shows that POP independent variable and Natural Resources Depletion.
and BE’s null hypothesis are rejected because the p-value is less
than 0.05 alpha indicating that their data is stationary. NRD’s Durbin-Watson statistic = 1.44524
null hypothesis is rejected at a 5% significance level using the p-value = 0.0132133
first differences with constant, while the GDP’s null hypothesis
is rejected using the second differences without constant. In table 5, the coefficient estimates indicate that if all other
Among the variables both Population and Business things equal, an increase in GDP will reduce the NRD by -
Establishments showed stationarity in their level which 1.28937e-11, an increase in Population will increase the NRD
indicates that the variables are well fit for cointegration. by 1.33197e-07, and an increase in Business Establishments
Meanwhile NRD and GDP showed stationarity at their would lower the NRD by -0.0211682. NRD, Population, and
differences which determined their capacity for cointegration, GDP are statistically significant at 0.01 alpha, while Business
overall, all variables have no unit root and are stationary. Establishments is statistically significant at 0.05 alpha. All
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 93

variables are deemed to be significant, as a result, the Table 9

Jarque-Bera Test for Normality
researchers reject the null hypothesis that there is no significant Variable Jarque-Bera Test P-Value
relationship between variables and Natural Resource Depletion NRD 25.8553 2.42988e-06
and accept the alternative. The R-squared of the model at GDP 3.36321 0.186075
0.4039, representing the goodness of fit of the model, tells that POP 5.70562 0.384659
BE 5.70562 0.0576821
40% of the variance in natural resource depletion is determined
by the independent variables. A Durbin Watson of 1.44524 in
H0: The residuals are normally distributed.
the OLS regression indicates that there is no autocorrelation
Ha: The residuals are not normally distributed.
among the variables. The following model is fitted for this set:
The p-value for GDP, POP, and BE are 0.186075, 0.384659,
NRDt = −3.45604 −1.28937e-11 GDPt + 1.33197e-07 POPt
0.0576821 respectively, which are greater than 0.05 alpha.
− 0.0211682 BEt + ɛt
Thus, the researchers reject the null hypothesis for the three
variables and accept the alternative that the residuals are
Durbin-Watson statistic = 1.22647
normally distributed. However, the p-value for NRD is
p-value = 0.00177567
2.42988e-06, which is less than 0.05 alpha. Therefore, the null
hypothesis is accepted. Further transformation is required for
Table 7 shows that the coefficient estimates indicate that if
NRD.
all other things equal, an increase in GDP will reduce the
Table 10
l_NRD by −2.61970e-11, an increase in Population will Jarque-Bera Test for Normality Transformation Estimates
increase the l_NRD by 3.25553e-07, and an increase in Variable Jarque-Bera Test P-Value
Business Establishments would lower the l_NRD by l_NRD 1.38592 0.500094
−0.0611212. All the variables are statistically significant at 0.01
alpha, which indicates that they are significant, as a result, the H0: The residuals are normally distributed.
researchers reject the null hypothesis and accept the alternative. Ha: The residuals are not normally distributed.
The R-squared of the model is also at 0.606442, which means
that 60.64% of the variability in the log of Natural Resources The p-value for l_NRD is 0.500094 which is greater than
Depletion is explained by the independent variables. 0.05 alpha. Thus, the researchers reject the null hypothesis for
Furthermore, the table indicates that the data has no the variable and accept the alternative that the residuals are
autocorrelation because the Durbin-Watson is 1.226466, which normally distributed.
is still acceptable. The following model was obtained: Chow test for structural difference with respect to Philippine
Native Plants Conservation Society (Dummy variable)
NRDt = −9.83683 −2.61970e-11 GDPt + 3.25553e-07 POPt
−0.0611212 + ɛt F(4, 23) = 6.125 with p-value 0.0017
H0: There is no structural breakpoint in the dataset.
Ha: There is a structural breakpoint in the dataset.

The Chow Breakpoint test has a p-value of 0.0017, which is

Table 7
OLS Regression Transformation Estimates
Variables Estimate Standard Error T-value P-value
l_NRD −9.83683 1.87455 −5.248 <0.0001
GDP −2.61970e-11 7.21535e-12 −3.631 0.0012
POP 3.25553e-07 6.98564e-08 4.660 <0.0001
BE −0.0611212 0.0162758 −3.755 0.0008

Table 8
OLS Regression Fit Statistics Transformation Estimates
Mean dependent var −1.319325 S.D. dependent var 1.137140
Sum squared resid 15.26715 S.E. of regression 0.751964
R-squared 0.606442 Adjusted R-squared 0.562714
F(3, 27) 13.86831 P-value(F) 0.000012
Log-likelihood −33.00869 Akaike criterion 74.01738
Schwarz criterion 79.75333 Hannan-Quinn 75.88716
rho 0.338459 Durbin-Watson 1.226466

Table 11
Chow Breakpoint
Variables Coefficient Standard Error T-value P-value
NRD 2.73975 2.28457 1.199 0.2426
GDP 3.47857e-11 2.06393e-11 1.685 0.1054
POP −9.55903e-08 8.88052e-08 −1.076 0.2929
BE −0.000820777 0.00966025 −0.08496 0.9330
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 94

less than 0.05 alpha. Therefore, the researchers reject the null H0: There is no specification error among the variables
hypothesis. It further proves that there is a structural breakpoint. Ha: There is a specification error among the variables
No further transformation is required.
Chow test for structural difference with respect to Philippine Table 14 shows that the p-values of the Ramsey test
Native Plants Conservation Society (Dummy Variable) transformation estimates are 0.0077, 0.206, and 0.0758. The p-
values in the squares only and cubes only test are greater than
F(4, 23) = 14.2072 with p-value 0.0000 0.05 alpha, however, the p-value of squares and cubes is lower
than 0.05 alpha. Therefore, the researchers accept the null
H0: There is no structural breakpoint in the dataset. hypothesis that there is no specification error among the
Ha: There is a structural breakpoint in the dataset. variables.

The Chow Breakpoint test has a p-value of 0.0000, which is Test statistic: LM = 9.622007, with p-value = P(Chi-square
less than 0.05 alpha. Therefore, the researchers reject the null (3) > 9.622007) = 0.022068
hypothesis. It further proves that there is a structural breakpoint.
No further transformation is required. H0: The variances are constant.
Ha: The variances are not constant.
Table 13
Ramsey Test
Yielding a p-value of 0.022068 which is less than 0.05 alpha.
RESET Specification Test Test Statistic P-Value
Squares and Cubes 1.586876 0.224 The researchers reject the null hypothesis that the variances are
Squares Only 3.278548 0.0818 constant. Therefore, at a 5% level of significance, the error
Cubes Only 3.211694 0.0848 terms are heteroskedastic. Since there is heteroskedasticity in
the model, there is a need to transform the dependent variable,
NRD.
H0: There is no specification error among the variables
Ha: There is a specification error among the variables Test statistic: LM = 0.942346, with p-value = P (Chi-square
(3) > 0.942346) = 0.815199
The p-values of the Ramsey Reset are 0.224, 0.0818, and
0.0848, and all are greater than 0.05 alpha. Therefore, the H0: The variances are constant.
researchers accept the null hypothesis that there is no Ha: The variances are not constant.
specification error among the variables.
It yields a p-value of 0.815199, which is greater than 0.05
Table 14
Ramsey Test Transformation Estimates
alpha. The researchers accept the null hypothesis that the
RESET Specification Test Test Statistic P-Value variances are constant. Therefore, at a 5% level of significance,
Squares and Cubes 5.949371 0.0077 the error terms are homoscedastic.
Squares Only 1.679747 0.206 6) Environmental Kuznets’s Curve
Cubes Only 3.420228 0.0758
In confirming the Environmental Kuznets Curve (EKC)
Theory employed in the study, the researchers plotted the
variables with the Level of Philippine Natural Resources
Table 12
Chow Breakpoint Transformation Estimates
Variables Coefficient Standard Error T-value P-value
l_NRD 8.92190 3.19658 2.791 0.0104
GDP 1.42427e-10 2.88786e-11 4.932 5.52e-05
POP −3.92209e-07 1.24257e-07 −3.156 0.0044
BE −0.00572538 0.0135167 −0.4236 0.6758

Table 15
Breusch-Pagan Test for Heteroskedasticity
Variables Coefficient Standard Error T-value P-value
NRD −9.83168 5.73355 −1.715 0.0978
GDP −3.71801e-11 2.20690e-11 −1.685 0.1036
POP 3.17628e-07 2.13665e-07 1.487 0.1487
BE −0.0383917 0.0497816 −0.7712 0.4473

Table 16
Breusch-Pagan Test for Heteroskedasticity Transformation Estimates
Variables Coefficient Standard Error T-value P-value
l_NRD 0.753494 3.23205 0.2331 0.8174
GDP −5.60577e-12 1.24405e-11 0.4506 0.6559
POP 2.36422e-08 1.20445e-07 0.1963 0.8459
BE −0.00276297 0.0280623 −0.09846 0.9223
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 95

Depletion (% of GNI) on the vertical axis and the GDP Depletion obtained through the estimation and plotting of the
(constant 2015 US$) from 1990 to 2020 on the horizontal axis. curve shows relevance. The inverted U-shaped EKC shows that
Figure 1 shows an inverted U-shape, indicating that the growth during the initial stage of economic growth, environmental
in GDP causes increases in Natural Resources Depletion in the depletion significantly increases but after passing a certain
beginning, but when GDP reaches a certain level, the level of point, the impact of economic growth on environmental
Natural Resources Depletion starts to decrease as the economy degradation decreases.
develops continually. However, Figure 2 highlights that the The Philippines, as a developing country, continuously faces
relationship between Natural Resources Depletion and GDP is challenges in protecting its natural resources due to many other
more complex, which is presented in an N-shape. This shows economic, social, environmental, and policy issues at hand.
that Natural Resources Depletion will start to increase again at Despite those mentioned above, there are still prospects for
a certain level of economic activity, but it will decrease again countries like the Philippines to increase economically without
due to economic growth, which was shown by the smaller harming the environment. Related studies by Xu & Lin (2016)
inverted U-shape curve. Upon this, the researchers were able to in China showed results on the optimization of economic
prove this relationship between variables in congruence with growth, including the rise of industrial products as reasons for
the theory of the EKC. the decline in the magnitude of environmental damage.
Different actors in the GDP gearing towards sustainable
development can cause the generated result. The emergence of
alternative resources to avoid draining available resources
started as people searched for new sources by developing
efficient technologies that can help produce renewable
resources and calibrate production and consumption processes
(Wei & Kangping, 2012). Economic growth through industrial
technology development improves living standards and
awareness in terms of environmental protection systems, as
technological progress allows green production in industries to
reduce pressure on the environment (Wang et al., 2021).
Fig. 1. Environmental Kuznets Curve at Second-Order Polynomial 2) Natural Resources Depletion and Population
Population results from the OLS coefficient estimates,
Augmented Dickey-Fuller unit root test and Engel Granger test
indicate that the variable significantly affects Natural Resources
Depletion. In contrast to the null hypothesis, the Population is
seen as a positive variable influencing the increase in the level
of Natural Resource Depletion. This backed up the results of
the Xu & Lin (2016) study, which found that population growth
follows a positive U-shaped pattern since demand differs at
different stages of population growth. The Philippines is a
developing country with fast-growing and high population
densities causing increased demand for the production and
Fig. 2. Environmental Kuznets Curve at Sixth-Order Polynomial consumption of goods and services. This generates demand for
workers, new employment opportunities, and infrastructure, all
B. Discussions of which contribute to the expansion of the Philippine economy.
After arriving at statistical results, researchers were able to However, uncontrolled, and excessive population growth in the
define the relationship between variables. country would not suggest good overall welfare for the
1) Natural Resources Depletion and GDP country's natural resources. This supported the findings of Lee
Results from the estimation showed that a significant et al. (2021) cross-sectional study of 138 countries that rapid
relationship exists between Gross Domestic Product (GDP) and population growth influences the pace of economic growth,
natural resource depletion. As confirmed by the cointegration leading to natural resource degradation and exploitation to meet
tests presented through the Augmented Dickey-Fuller unit root demand.
test and Engel Granger test, Economic growth plays a factor in With that, controlling population growth is essential in
natural resource depletion. Interestingly, the relationship is minimizing the demand for finite resources, particularly in
inversely related, as reflected by the ordinary least squares developing nations. According to Komu & Ethelberg (2015),
(OLS) output. The OLS output shows that Increases in gross family planning and population control initiatives are critical
domestic product decrease the depletion of natural resources. for educating the public about the economic and natural
This result implies that the Philippines’ economic growth has resource costs of unrestrained population growth. Furthermore,
become a helpful factor in preserving its natural resources. With Arnould et al. (2017) observed that reaching a sustainable
the application of the theory of the Environmental Kuznets balance is difficult when the population is fast rising, and
Curve, the relationship between GDP and Natural Resources environmental and sustainable initiatives should be more
Certeza et al. International Journal of Research in Engineering, Science and Management, VOL. 5, NO. 11, NOVEMBER 2022 96

integrated with efforts on high-priority matters. Suppose the Chow Breakpoint, Ramsey Test, and the Breusch-Pagan test for
Philippines government does not intervene and regulate the heteroskedasticity. Furthermore, the theory of the
high continuous rate of population growth and continues to Environmental Kuznets Curve (EKC) was employed to see the
overlook environmental and sustainable development concerns. relationship between GDP and Natural Resources Depletion in
In that case, the population will continue to positively affect the country. The results showed that there is an inverse
natural resource depletion, which may lead to economic and relationship between GDP and Natural Resources Depletion,
ecological problems. which means an increase in GDP decreases the level of Natural
3) Natural Resources Depletion and Business Establishments Resources Depletion. Therefore, the researchers rejected the
The results show that Business Establishments have a null hypothesis, and these findings about the Philippines' GDP
significant relationship with Natural Resources Depletion as and Natural Resources Depletion supports the concept of the
tested using the Augmented Dickey-Fuller unit root test, Engel Environmental Kuznets Curve. Meanwhile, the results of the
Granger test, and Ordinary Least Squares. Based on the OLS study for Population show that the variable also rejects the null
output, Business Establishments have a negative effect on the hypothesis. However, unlike GDP, it positively impacts the
depletion of natural resources. Therefore, an increase in level of Natural Resources Depletion. Similar to GDP, the study
business establishments leads to a decrease in the depletion of also found that Business Establishments and Natural Resources
natural resources. Depletion has a negative relationship, which rejects the null
Awan & Liaqat (2015) stated that the emergence of different hypothesis.
industries results in high levels of pollution and carbon
B. Policy Implications
emissions. Xu & Lin (2016) also indicated that increased
carbon emissions are due to the early stages of industrialization. Based on the findings and results of this study, the
Still, technological advancements and industrial structure researchers recommend that the level of Natural Resource
optimization lead to the gradual decrease of emissions of Depletion be considered and prioritized in policymaking.
industries. A study by Figge & Hahn (2020) found that Policymakers should draft legislation to promote and create
business-related comparative advantages and the return on green technologies and practices and strengthen existing
natural resources can be positively correlated. It stated that environmental and sustainability regulations. To conserve
more financially successful businesses could quickly achieve natural resources, the Philippines enacted several national
higher returns on natural resources. However, other firms can environmental laws to preserve resources, educate the public,
also attain this through green technology or green utilization and control exploration and exploitation. However, the general
advantages. According to Prakash et al. (2022), people have public still needs to be made aware of the goal and significance
become more aware of the situation of our natural resources, of these laws for the country and its people. Proper information
and industries have started to adopt green practices. Moreover, dissemination about the protection of natural resources is
Ali et al. (2021) found that tourism, renewable energy, necessary to help society function economically while caring
urbanization, and cultural globalization led to decreased natural for the environment. This may be accomplished by
resource depletion. incorporating the country's laws and goals into the educational
system. Educating people on the necessity of preserving natural
5. Conclusion and Policy Implications resources can help them make sound economic and personal
decisions.
A. Conclusion Furthermore, economic, and personal activities must be
The Philippines, an archipelagic country rich in natural regulated and monitored, such as defining family planning and
resources from its seventeen regions, has been a key producer sex education rules to control unplanned, rapid population
of raw materials in different industries to supply the demands growth and production and consumption habits to favor limited
of a variety of goods both domestically and internationally. and exhaustible resources. A high population creates a high
Through the years, economic activities have constantly been demand for natural resources for production and consumption
using natural resources to sustain the needs of society, bringing to fulfill needs and wants. Excessive resource utilization leads
threats to the quality, number, and future of natural resources. to depletion; alternative resources must be employed, and
In this study, researchers examined the significance and impact sustainable practices and systems must be incorporated to
of three economic indicators, namely Gross Domestic Product provide time for renewal or recovery before being used in
(GDP), Population, and Business Establishments, on the level various production processes. Moreover, as part of their
of Natural Resources Depletion in the Philippines from 1990 to corporate social responsibility, corporations must be urged to
2020. All secondary data was sourced from the World Bank practice sustainability. Imposing taxes and regulatory fines on
Open Database. The Augmented Dickey-Fuller Unit Root Test businesses that do not pursue ethical and sustainable practices
was used to test the stationarity of the variables. This was can help to enforce policy more strictly.
followed by the Engle-Granger Two-Step Method to check the
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