Manufacturing seen to help PH reap demographic dividends

With its young population, the Philippines is deemed to be in a “demographic sweet spot”, but dividends will come only if there are enough opportunities for new job seekers.

According to the London-based think tank Capital Economics, policymakers must ensure that a growing labor force can be put to good use as it highlighted the role of manufacturing in economic growth. It is historically the only sector capable of creating enough jobs to absorb an increasing workforce.

Last year, the manufacturing sector only accounted for 18 percent of the country’s gross domestic product, making it the lowest share since 2000.

A “demographic sweet spot” means that a country has a high proportion of working-age individuals relative to dependents.

“If the Philippines is to make the most of its demographic dividend, it will need to provide enough good employment opportunities for the people who are set to enter the workforce in the coming years,” Capital Economics said in a report.

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According to the United Nations, the working age population in the country is expected to grow by 1.5 percent every year over the next decade, which is more than in any country in the region just behind Pakistan. Meanwhile, the number of Filipinos over 65 or below 15 is projected to decrease over the next decade, therefore lowering the number of dependents.

“Governments in countries with older population have fewer taxpayers and have to spend more on pensions and health care, leaving less for spending in more productive areas such as infrastructure. Conversely, governments in countries with young populations, such as the Philippines, face fewer of these demands on the public purse,” it said.