Sweet spot in the economy

Arecent report on the future of the Philippine economy by the Asean+3 Macroeconomic Research Office (Amro), an independent regional surveillance unit established by the finance ministers of the region to promote objective monitoring of their economies, is quite refreshing.

Amro announced that the Philippines would reap the benefits of a huge number of young working age Filipinos in the next 40 years. It also said that with the Filipino population expected to peak in 2092, that working-age group would reach its apex in 2051.

In contrast, eight of the region’s economies are considered to have reached their population peak as of 2023, with people ages 65 and above comprising 7 percent to 14 percent of their total population.

Only the Philippines, Laos and Cambodia are the countries in the region that have high— but slowly declining—fertility rates.

That fertility rate (or even less of it) is something that economic powerhouses China, Japan and South Korea would willingly give an arm and a leg for, so to speak, as majority of their childbearing-capable citizens prefer not to have children due to financial reasons, in spite of vigorous efforts by their government to encourage them to reproduce.

Note that as the population ages and the birth rate goes below the minimum replacement level of 2.1 babies born per woman, there would be fewer able and willing hands to keep the economy going and, in particular, to provide for the needs of a heavy senior citizen load.

According to demographic and economic studies, people ages 15 to 64 are considered of working-age or economically-active, while those 65 and over are classified as old dependents.

Based on the latest census, approximately 64 percent of Filipinos are between the ages of 15 and 64, thus putting the Philippines in what is considered as a “sweet spot” in economic development.

That’s the age bracket where the men and women who compose it are most physically and mentally productive, eager to make something for themselves professionally and financially, and have minimal wellness or health problems.

And because they often have a lot of disposable income, their spending helps spur economic growth.

With the way things are evolving in Filipino bedrooms, that number of working-age Filipinos is expected to remain steady considering that, per the National Economic and Development Authority, the fertility rate in the country this year is 2.431 births per woman, although it already went down to 2.454 births in 2023.

The decline in births last year and the preceding years may be attributed to a large extent to the success of the government’s health reproduction (or family planning) programs despite contrary efforts by the Catholic Church and its allied pro-family organizations.

Given that huge reservoir of working-age Filipinos, the challenge to the government and the business sector is to harness their potential for productivity and development here in the Philippines.

Since they acquired their education in schools that were directly or indirectly funded by the taxpayers’ money, it is only fair that the fruits of or benefits from that education be enjoyed here in the country, not elsewhere in the world.

Sadly, unemployment remains a problem for many working-age Filipinos.

According to the Philippine Statistics Authority, some 1.8 million Filipinos were out of work in February, compared to 2.15 million who were jobless in January.

The wholesale and retail sector drew the biggest increase in employment with 1.6 million new workers, followed by the agriculture sector with over 1.3 million in new hires.

In light of that dismal employment situation, the lure of employment in other countries has become irresistible.

That outward migration of labor may be a boon to those who are able to get good-paying jobs, but a bane to the country because it represents a loss of skills it has already paid for and yet unable to make full use of.

There goes the otherwise sweet spot in the economy.

Given that huge reservoir of working-age Filipinos, the challenge to the government and the business sector is to harness their potential for productivity and development here in the Philippines