Young population to help Philippines become economic powerhouse

MANILA, Philippines - Rising investments in human capital amid the rising number of young population would help groom the Philippines to become a major economic powerhouse over the long term.

Editha Martin, executive director of the Investor Relations Office (IRO), said the government’s growing budget for human capital development shows the intention to further improve the quality of workforce.

She said rising investments in human capital also reflects the government’s desire to make the economy reap the potential demographic dividends.

“Consistently rising investments in health and education will help ensure that the Philippines does not miss out on the opportunity offered by its entry to the demographic window,” she added.

Starting this year until 2050, the Philippines is said to be within the “demographic window,” loosely defined as a period when a great majority of the population are of working age.

Because the number of workforce far outweighs that of dependents, the increase in incomes may accelerate.

But this can only happen if there is good quality of labor force.

Under the Aquino administration, the government’s budget allocations for education and health have risen substantially year after year.

The budget for the Department of Education increased 18.6 percent to P367.1 billion, while that of the Department of Health went up 19.2 percent to P108.2 billion for this year.

Moreover, the budget for the Conditional Cash Transfer (CCT) program, which encourages school attendance among children from poor households, is high in the government’s agenda. Its budget of P62.3 billion for this year is six times the P10-billion allocation in 2010.

For his part, Socioeconomic Planning Secretary Arsenio Balisacan stressed the need to sustain the trend of rising investments in human capital development.

“We need to understand that having a fast growing working-age population is a boon for the economy, but only if we do two things: invest more and more in human capital development and make sure the job opportunities match the skills of the people,” Balisacan said.

The country’s chief economist also highlighted the need to make education more accessible and to intensify measures that will make the country’s investment climate more attractive.

Based on official projection, the country’s working-age population (between 15 and 64 years old) this year accounts for 66.6 percent of the total population of 101.6 million.

The share of the working-age population is expected to rise to 68 percent of 110 million people in 2020, and further to 70.6 percent of 125.3 people million in 2030. 

Government strategies and private-sector suggestions to further boost the country’s chances of reaping demographic dividends would be discussed in more detail during the 28th Philippine Economic Briefing on Sept. 30.