AN ECONOMY with a younger population like the Philippines can fail to grow robustly if it fails to invest in key areas like health, skills, and infrastructure, according to DBS Bank Ltd.
In a report issued by DBS economists Taimur Baig and Radhika Rao on Sept. 25, the bank noted misperceptions among economies in Asia which have contrasting demographic dynamics.
“Demographics is not destiny. Ageing societies can continue to prosper; youthful societies can stagnate,” it said.
The bank noted that China, Hong Kong, Taiwan, Thailand, South Korea, and Singapore have ageing demographics while Bangladesh, India, Indonesia, Malaysia, and the Philippines skew younger.
According to the bank, the younger working population in economies like the Philippines have at least two decades more to expand, though this will not immediately translate to economic growth.
“Without job creation, job seekers, young or old, become chronically unemployed, sapping economic vitality,” it said. “Without adequate infrastructure and logistics, even a cheap labor force can be insufficient in driving competitiveness.”
Meanwhile, an ageing economy can continue prospering by enhancing productivity, it added.
In several Philippine economic briefings abroad, Finance Secretary Benjamin E. Diokno has said that the Philippines is in a “demographic sweet spot,” with a young cohort entering or currently in the work force.
During the economic briefing in Dubai last month, Mr. Diokno said the Philippine labor force has a median age of 25 years.
“The current demographic sweet spot will fuel the country’s economic growth,” he earlier said.
The Philippine Statistics Authority (PSA) estimates the youth labor force in July at 5.97 million, out of a youth population of 20.16 million. The PSA defines the youth age bracket as 15-24 years.
This translated to a youth labor force participation rate of 29.6%, lower than 37.1% posted a year earlier.
Youth that are new entrants into the labor force more than doubled to 1.13 million in July from 496,000 a month prior.
However, the youth employment rate fell to 86% in July from 90.1% in June and the year-earlier 88.1%.
The proportion of youth not in education, employment or training increased to 14.7% from 12.9% in July 2022. — Keisha B. Ta-asan