CEBU, Philippines - The Philippines should start implementing sound policies to take advantage of its human resource wealth, while the country sits on a “demographic sweet spot†in the next few years.
This means that employable age in an average of 30 years old will dominate the number of the country’s population, which is seen to be highly employable and propel the need for human resource requirement of industries, including the booming business process outsourcing, the re-introduction of manufacturing, among others.
However, economists said that if the Philippines will not be able to set strong policies in taking advantage of this edge, the country will lose opportunity to compete and lure investors.
Antonio del Carmen, faculty of the Ateneo Graduate School for Business, said that the Philippines can achieve higher GDP (Gross Domestic Product) growth if this edge will be taken serious consideration.
Del Carmen, also the director of master entrepreneurship program of the Ateneo University, said that this “sweet spot†phenomenon should be complemented with programs and policies that will arm the young people with competencies and right educational background.
“Having large [employable] population is good, but we have to train them properly,†added del Carmen.
Likewise, Asian Development Bank-Philippines (ADB) senior country economist Norio Usui said that high population growth is an asset, but the Philippines should use this potential appropriately.
The Philippines has two years to hit its “sweet spot†phenomenon. Usui thus said it is crucial for the country to prepare early on.
Promoting entrepreneurship that provides programs that will arm these young people to enter the corporate world and connecting the educational institutions with the industry players are just two of the “homeworks†the country has to do.
Usui also emphasized the establishment of institutionalized policy reforms “that can't be destroyed,†explaining that policies should be implemented regardless of change of leadership and political colors.
At the hot issue on maximizing the ASEAN integration, Usui recommended that the Philippines should leverage on its “sweet spot†phenomenon, preparing the young Filipinos to be competent and highly competitive.
Usui said the Philippines’ advantage in competing with the rest of the region depends on how it would implement strategies to keep its competitive advantage—people.
Everything will largely depend on strategies, he said, adding that strategies should be geared towards how the country can seize the opportunity.
“If you don't have good strategies, quite easily you will end up as loser,†he stressed.
Meanwhile, a study recently conducted by CLSA Asia-Pacific revealed that the Philippines is sitting on a “demographic sweet spot†with its crop of young urban professionals seen accounting for half of the country’s discretionary spending and at least a fifth of the country’s economic output by 2020.
With a bright outlook for the domestic economy, the study projects this demographic’s consumption growth to outpace the rest of the Philippines by 10 percentage points in the next decade.
Sustained growth in the BPO space and the up- and -coming gaming and tourism sectors will propel this trend, especially when yuppies start buying houses and cars.
The report, entitled “Pinoy Yuppies: New Spending Class Steps Forward,†authored by CLSA analysts Jacqui Evangelista and Alejandro Molina, revealed that this crop of well-educated 25- to 34-year-olds currently account for three percent of the total population and seven percent of the country’s total workforce.
But while making up just three percent of the population, the report noted that this segment already comprised more than 20 percent of discretionary consumption, or the amount of spending outside of basic needs like food, shelter and clothing. This includes money spent on luxury items, recreation, vacations and other non-essential goods and services.
Similar to the post-war optimism in the US that gave rise to a generation of baby boomers, the report noted that a sense of national confidence after the fall of the Marcos regime had led to a hike in Philippine births, giving rise to this demographic sweet spot.
Overall, the study noted that 25 percent, or 23.8 million, of the population belong to the 25-34 age group, of which about 12 percent, or 2.9 million, reside in the National Capital Region and about 2.7 million are employed
Between 2005 and 2010, the research noted that the yuppie base grew by 11 percent, outpacing the 6-percent growth in the labor force in the same period. /JMD (FREEMAN)