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  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Dec 16, 2024
  • 4 min read

A demographic alarm bell is ringing in Japan, where the birthrate fell last year to its lowest point in recorded history. The sharp drop in births from the previous year marks the eighth consecutive year of decline. Former Prime Minister Fumio Kishida labeled this demographic crisis Japan’s greatest challenge. But this is more than just Japan’s story.


The world is aging, fast. As it does, global trade will shift in unexpected ways. Japan offers a preview of what much of the world will soon face, as economies everywhere start to see record-low birthrates. South Korea recently recorded the lowest birthrate globally, while Italy hasn’t seen an increase in births since 2008. And this is no longer just a challenge for wealthy, industrialized countries.


In Latin America and South Asia, the population ages 65 and older is quickly rising. Life expectancy is rising even as fewer people are being born. The result: Nearly 1 in 4 people worldwide will be 65 or older by century’s end. That shift could reshape the world in ways we’re only beginning to understand.


Countries are scrambling to adapt to the financial strain of aging populations.


Germany has raised the retirement age, a move echoed across Europe. Greece has introduced a controversial six-day workweek, while China, reversing its one-child policy, now urges families to have three children. Japan is turning to automation to fill the gaps left by retiring workers, and is bringing in more migrant workers.


Amid these shifts, Africa’s youthful population remains a demographic outlier, with over half of its population younger than 25 years old. As economies age, they may experience a decline in overall production and consumption. With fewer workers available, production is likely to move away from labor-intensive to more capital-intensive industries, making capital productivity crucial for sustaining output and growth.



The “consumption- retirement puzzle” adds uncertainty to consumption patterns. While traditional theories suggest consumption remains steady throughout life, in reality, some retirees may spend less due to insufficient savings, shifting their focus to essentials. In aging economies, consumption is moving toward goods and services that cater to an older population. Industrial equipment, transport, and work-related expenditures are giving way to increased spending on healthcare and other essentials for seniors.


In Japan, for example, demand for strollers and baby diapers has plummeted while demand for adult diapers has surged. Similar patterns are emerging globally. In China, spending on medical care and food is rising, while expenditures on transportation, household durables, and recreation are declining with age.


Simulations done by economists Sagiri Kitao and Tomoaki Yamada for Japan through 2050 suggest consumption will fall across the board as the population continues to age, with nondurable goods declining the slowest. The U.S. and Singapore are following a similar trajectory, reflecting a broader global realignment in consumption driven by demographic changes.


As populations age, changes in consumption and labor supply will reshape the structure of global trade, though the full impact isn’t yet understood and depends on the import content of consumption. Some studies hint that older economies might altogether trade less, focusing instead on more capital-intensive goods, while the aging workforce may change the skills used in producing traded commodities. Impacts on trade composition, however, remain an open question. Industrial and durable goods are among the top import and export categories globally.


We can expect these categories to shrink as work-related expenditures decline. Similarly, as birthrates fall and fewer children are born, the global market for toys, infant products, and sports equipment may contract. Such imports are already declining in countries with a higher average age, such as Japan. However, these trends are suggestive, as reduced imports could potentially be offset by increased domestic production.


Conversely, we can anticipate an increase in the trade of services, particularly in areas like healthcare and eldercare. Medical services, provided remotely or through medical tourism, will likely become a more significant component of global trade. Japan’s digital health industry is already growing fast. Its telemedicine market is expected to reach $404.5 million by 2025 (due to “shortages in medical specialists”), and broader healthcare IT, including wearable tech and online monitoring, is projected to hit $16 billion.


The changing demographics suggest a major transformation in global trade. And as the goods and services exchanged shift, there will be opportunities for countries to change their standing in global trade. For younger, less industrialized African economies, the challenge is to leverage their demographic advantage and pivot toward sectors that can thrive in a world less reliant on industrial goods.


Traditional paths to higher-income status, like export-driven industrialization, may lose their effectiveness in an aging global economy with diminishing demand for such products. Wealthier nations will need to delay retirements, rely on migrant labor, and invest in technology to sustain productivity.


Developing nations with aging populations face challenges without access to new technologies, potentially relying on older workers for longer. Addressing this demographic shift will deeply affect markets, production, and trade. It will also demand unprecedented global coordination to ensure that the world can produce and afford what it needs, with no one—and not a single country—left behind.


Source: Barrons

The Philippine population is expected to be among the youngest in the region, with the country still in the early stage of its demographic transition as fertility rates remain high and the number of working-age individuals seen to peak by 2051 — the latest among Southeast Asian economies, a think tank said.


The latest Regional Economic Outlook report by the ASEAN+3 Macroeconomic Research Office (AMRO) showed the Philippines’ median age stood at 24.5 years in 2021, the second-youngest in the region after Laos (23.8 years).


The country’s median age was lower than Cambodia (26.5), Malaysia (29.9), Myanmar (29), Indonesia (29.4), Brunei Darussalam (31.8), Vietnam (32), Thailand (39.3), China (37.9), Singapore (41.8), South Korea (43.4), Hong Kong (44.9) and Japan (48.4).




AMRO data also showed the Philippines’ average population growth was 1.8% as of 2021, the second-fastest in the region after Malaysia (1.81%).


The Philippines’ peak population is expected by 2092, the latest among the ASEAN member-countries plus China, Hong Kong, South Korea and Japan.


Peak population refers to the year when the total population/share of working population is projected to reach the highest level.


“Nearly all ASEAN+3 economies have seen their populations peak, led by Japan in 2010, while China reached its peak in 2021. Thailand will be the first in ASEAN to reach its population peak — projected around 2030 — while economies like Lao PDR and the Philippines are not expected to see their populations decline in the next 40 years,” AMRO said.


The report also showed the Philippines had the third-fastest average growth in the working age population at 2.27%, behind Malaysia (2.41%) and Laos (2.39%).

Working age population refers to those aged 15 to 64.


However, the Philippines will only see its working age population peak in 2051, the latest among ASEAN+3.


Several ASEAN+3 economies have already seen a peak in working age population, namely Japan (1991), China (2009), Singapore (2010), Hong Kong (2011), Thailand (2012), Vietnam (2013), South Korea (2015), Brunei (2018) and Malaysia (2022).


Aside from the Philippines, only Myanmar, Indonesia, Cambodia and Laos have yet to see the peak level of their working age population.


AMRO noted that ASEAN+3’s working-age population by 2050 will be 12% smaller than in 2021, “equivalent to about 190 million workers exiting the workforce.”


“Except for two, all others in the ASEAN+3 region will be technically considered ‘aging societies’ by the end of this decade. Within the next decade, the region’s working population will start to decline, and the age profile of the labor force will be gradually dominated by older workers,” AMRO said.


It said the Philippines, Cambodia, Indonesia and Laos are still in the early stage of the demographic transition, “with fertility rates still high (although declining).”


Data showed the Philippines has the highest fertility rate in the ASEAN+3 region at 2.75 live births per woman. 


“By 2035, all economies in the region are expected to have sub replacement fertility rates with the exception of only one, the Philippines,” AMRO Group Head and Principal Economist Allen Ng said in a hybrid briefing on Monday.


The Philippines’ elderly population is only at 5.3% of the total population as of 2021, the second lowest after Laos (4.4%).


The country’s old-age dependency ratio, which is the old-age population divided by the working age population, stood at 8.3%.


Mr. Ng said aging is a “critical challenge” for the ASEAN+3 region.


“The problem of becoming old before becoming rich is a concern for many economies especially the lower-middle and middle-income economies in the region because this implies that these economies could have less resources to manage the challenges that aging brings,” he said.


AMRO forecasts that by 2050 nearly 44% of the world’s centenarians will come from the region, particularly in China, South Korea, Japan, and Thailand.


“Rapid aging is triggering fiscal concerns due to the potential rise in healthcare costs and pension liabilities, on top of the needed infrastructure spending that is required to sustain growth,” AMRO said.


  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Mar 15, 2024
  • 2 min read

The Philippines jumped five spots in the latest Human Development Index, but remained one of the laggards in Southeast Asia, the United Nations Development Program (UNDP) said.


The Philippines ranked 113th out of 193 countries in the UNDP’s index, which measures a country’s health, education and standard of living.


The Philippines’ score improved to 0.71 in 2022 from 0.692 in 2021. This also marked the country’s highest score since 0.714 in 2019.


The Philippines’ score was below East Asia and the Pacific’s average of 0.766 and the global average of 0.739.


In Southeast Asia, human development levels were “very high” in Hong Kong (fourth), Singapore (ninth), Brunei Darussalam (55th), Malaysia (63rd), and Thailand (66th).

The Philippines had a “high” human development level, along with Vietnam (107th) and Indonesia (112th).


On the other hand, human development was considered “medium” in Laos (139th), Myanmar (144th), Cambodia (148th) and Timor-Leste (155th).


“The world has achieved a new record in human development. After steep losses in 2020 and 2021, the Human Development Index… has climbed to its highest level ever recorded at the global level,” the UNDP said in a report.


While the index value is greater than in 2019, the UNDP said it does not mean the world has fully recovered from the impact of the coronavirus pandemic and other crises.


“Essentially, we have not reached the level of human development that could have been expected had the pandemic not happened,” it said.


Life expectancy at birth is at 72.2 years in the Philippines,” according to the Human Development Index. The expected years of schooling for Filipinos is 12.8, while the mean years of school is nine.


Life expectancy in Singapore is 84.1, with 16.9 expected years of schooling and 11.9 mean years of school.


The Philippines’ gross national income per capita is about $9,059, a far cry from Singapore’s $88,761.


The Philippines also ranked 92nd in the gender inequality index with a score of 0.388, while its gender development score stood at 0.966.


Jose Enrique A. Africa, executive director of think tank IBON Foundation, said the Philippines’ human development ranking does not reflect an improvement in the poverty situation.


“The appearance of improvement is unwarranted though, because the country’s economic growth has long been grossly inequitable and manifests disproportionately as income, profit and wealth gains for the richest rather than a generalized improvement in the conditions of the majority,” he said in a Viber message.


Almost half of Filipino families, equivalent to 13 million households, consider themselves poor, according to a survey by the Social Weather Stations in late 2023.

Mr. Africa said the index’s measure of education does not even capture the poor quality of education in the country.


“Amid low family incomes, the government has so much more to do to improve the reach and quality of the public school system,” he said.


The Philippines had one of the longest and strictest lockdowns in the world, with schools closed between April 2020 and March 2022.





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