The country’s young and productive workforce has buoyed the economy even in difficult times and the Marcos administration made a correct decision to continue investing in education to sustain its long-term economic goals, an economist said.
Addressing questions in a media forum in Quezon City on Saturday, Michael Ricafort, the Rizal Commercial Banking Corp.’s (RCBC) chief economist said that the Philippine economy grew because of the country’s demographic “sweet spot”, despite the weak performances of both the manufacturing and agriculture sectors.
“Kasi may bright spots po tayo na tinatawag. Iyon tulad po…iyong binanggit po natin iyong demographic sweet spot na tinatawag magmula noong 2015,” Ricaport told the forum.
“Demographic dividend, demographic sweet spot – iisa lang po iyon since 2015. Kaya nga po iyong economic growth natin ano iyon eh, huli na po kasi iyong Pilipinas doon noong 2015.”
The country’s neighbors were way ahead of having this demographic situation, he said, noting Japan had this 50 years ago, while Singapore and Hong Kong, 1980; China, 1990; and South Korea, 1955.
The Philippine’s Southeast Asian neighbors were also ahead by 10 to 20 years. The populations of those countries, however, are already ageing, he said.
Having demographic sweet spot means the majority of the population are within working age so the workforce is productive, according to Ricafort.
When a country’s population is young, people are earning more, have greater spending power, and have more debt, he said.
He noted that countries failing to develop their educational systems fall into a debt trap or poverty trap.
“Iyon po talaga iyong iniiwasan kaya nandodoon po iyong intervention kaya kitang-kita naman po natin for many years the number one na biggest budget allocation always goes to education which is kasi it is an investment approach,” the RCBC economist said.
“It’s like it’s investing into the future kasi magiging productive iyon eh – it’s well worth it basta ang alam naman natin kikita iyong mga iyan in whatever capacity kaya iyong ekonomiya po natin dahil po sa demographic sweet spot.”
The Philippines is benefitting from having a demographic sweet spot, he said, noting the country is now the fourth largest in the world in remittances from overseas workers based on World Bank’s yearly data.
The country recorded more than US$40 billion OFW remittances per year, both from the banking system and outside the banking system.
It also ranks second in the world in terms of business process outsourcing (BPO), second only to India, and it has been growing, Ricafort said.
Citing latest BPO data last year, Ricafort said, “the country posted more than US$32.5 billion earnings. Other records show it is around US$35 billion, a little bit shy of overtaking OFW remittances. Both account for about 8 to 9 percent of the economy.” PND
