DAVAO CITY—Unlike developed economies, the Philippines has a current and definite advantage: a steady supply of a young work force capable of sustaining its economic growth, the Bangko Sentral ng Pilipinas (BSP) said.
The first Philippine Consumer Finance Survey (CSF) conducted by the BSP has shown that the country has a young population that would “indicate a significant increase in the labor force over the next decade.”
Diwa C. Guinigundo, BSP deputy governor for the monetary stability sector, said here this week the country is seeing a big net participation rate in the labor force, with the young population expected to turn in big numbers within the next decade.
The net participation rate was computed from the number of people entering the labor force against those going out in retirement.
“The young age group of those aged 5 to 24 years old comprises 51 percent of the population,” he said. “Comparing it with those going out of the labor force, there is a big net participation rate.”
The survey shows that the 5-24 years old age group accounts for 21.5 percent of household members, while the 55-64 years old age group and the elderly (65 years old and over) comprise 6.9 percent and 5.4 percent of households, respectively.
“That means there would be more people who would be entering the labor force every year for the next decade,” he said.
“These figures indicate that a significant increase in the country’s labor force could be expected over the next decade,” the BSP survey said.
With the trend, the BSP said “the age dependency ratio, currently estimated at 0.6 could further drop to 0.5, translating to about two working-age household members for every one nonworking-age household member.”
The Philippines would find itself at an advantage compared to developed economies “with mostly an aging population and who are forced to look for their labor requirement from the developing countries.”
“We would have a sustainable economy in the next decade compared to them,” Guinigundo said.
But he said the sustainability would not mean better prospects to export migrant workers and easing up the domestic labor employment squeeze.
“They don’t have to go out. The economy is capable of providing jobs,” he said, citing the economic growth in the first quarter, for instance, that already reached 6.4 percent of the gross domestic product, the second-biggest growth after China, he said. “This means that businesses in the country would need to expand their operation by 6.4 percent more.”
Guinigundo said that through the years, domestic employment absorption was relatively acceptable although the International Labor Organization said growth in the economy was yet to be felt by the sectors that need to be pulled up from poverty.
The CFS survey result shows that less than half, or 43.2 percent of households, actually depended on wages and salaries of employed workers. One in five households continued to receive financial assistance from family members working abroad.