The Philippines is nearing a point where the majority of its citizens will be of working age and will have the ability to contribute to the growth of the economy, Bangko Sentral ng Pilipinas (BSP) Gov. Amando M. Tetangco Jr. said.
Tetangco – who was interviewed after he delivered his speech at a forum hosted by Euromoney, a monthly publication – said that the point he is referring to is what demographers call a “sweet spot.” This is a stage when less than 30% of a population are too young to work and only 15% are too old to contribute.
This means that now more Filipinos are at an age where they can hold jobs and help drive growth.
According to Tetangco these are people who have the purchasing power to drive consumption, investment and a faster growing economy.
“If you look at what is happening in the business process outsourcing [BPO] sector, the Philippines has become an important BPO center because of the availability of skilled manpower. And if you look at the age of BPO employees they are quite young but they receive good salaries and therefore they are able to finance consumption,” Tetangco was quoted in an article published in the Business Mirror.
Tetangco, citing a World Population Prospects document (2010 revised edition) from the United Nations, said that this particular age group is composed of able-bodied Filipinos with an average age of 22.2. He added that by 2015, the Philippines is expected to reach a stage of development where there are more of these working-age Filipinos in the population. By that time, the country should be able to reap the benefits of this demographic the same way neighboring countries Thailand and Malaysia did years earlier.
Investors who are looking for the potential of an economy in terms of market size will consider this demographic window, Tetangco added.
“If the Philippine economy is growing [by then], underlying that growth would be an increase in employment as well. As you grow, you can generate more employment and therefore you can have more people employed,” he said in the same interview.
