Philippines has 25-year window to reap benefits of young population

The Philippines has to take advantage of the changing population structure in the next 25 years, when the working-age population will outnumber dependents, according to the World Bank (WB).

“The country has a 25-year window to harness the benefits of a changing population structure. So, the country will have a larger working-age population relative to dependents,” Toni Joe Lebbos, World Bank economist for human development, East Asia and the Pacific, said.

“If we invest today wisely in education, health, and jobs, this demographic shift can boost economic growth. This is a chance to stress that this opportunity won’t last forever and not taking action now would mean missing out on a lot of benefits,” he added.

The Philippines’ latest Human Capital Index (HCI) stood at 0.52, which means that a child born in 2020 can only achieve about 52% of their productive potential by the age of 18. This is lower than the average HCI of upper middle-income economies at 0.56.

The HCI measures the health, education, and training of individuals — indicators deemed crucial to a country’s economic growth.

“In our aging region, the Philippines’ human capital provides an important lifeline of services that are needed for growth. Yet the Philippines is only utilizing only half of its human capital investment,” Mr. Lebbos said.

According to the World Bank, key challenges affecting the Philippines’ human capital include high fertility, limited and unequal access to education and healthcare, poor learning outcomes, low-quality jobs and skills, persistent poverty and inequality, and vulnerability to global headwinds like climate change and pandemics. 

For the Philippines to realize its human capital potential, it must invest in the development of children below 10 years old, the World Bank said in its latest report.

“To ensure optimal start in life for every child as a foundation for boosting human capital, holistic services in the early years including maternal and child health, nutrition, early education and stimulation, development of foundational skills, and social protection in the first 10 years are paramount,” it said.

The World Bank said the Philippine government must also improve the delivery of social protection services.

Local government units (LGUs) have a key role in ensuring on-the-ground investments for human capital, it said. Disadvantaged LGUs, especially those farther from the capital region, are at risk of losing about 26 percentage points of human capital potential, it added.

“The LGUs that have lower indicators seem to be hindered by capacity and governance challenges that often lead to inequitable access to services, and unequal access to services,” Mr. Lebbos said.

Asked which policies can support the development of human capital, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan suggested a possible expansion of the government’s conditional cash transfer program to support out-of-school children.

During the forum, Mr. Balisacan called on lawmakers to approve the Academic Recovery & Accessible Learning Program, which mandates students to take refresher courses in the summer break and address the learning gap. It also backed the passage of the Enterprise-Based Education and Training Framework Act to fit workers’ skills to industry demands.

Meanwhile, the World Bank also expects the country to reach upper middle-income status by 2026, but its key human capital indicators remain below the average of such an income class.

“Whether the Philippines will reach a high-income economy and developed status will really depend on investment in human capital today,” Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand said during the forum.

The multilateral lender classifies the Philippines as a low middle-income economy, but the government is hoping it can gain upper middle-income status by next year. 

Upper middle-income economies have a gross national income per capita of $4,466 to $13,845, according to the World Bank.

Source: Business World

Being Filipino: Our soft power

The 5th annual global survey from Brand Finance ranks all 193 member states of the United Nations for the first time 

• Military conflict harms soft power, with Russia, Ukraine, and Israel falling down the ranking 

• China is the fastest-growing nation brand this year, rising in the ranking from 5th to 3rd 

• The United Arab Emirates, Saudi Arabia, Qatar, and Türkiye see greatest improvement since inception of the Global Soft Power Index in 2020 

The United States and the United Kingdom are the most influential soft power nations in the world, according to the new iteration of the Global Soft Power Index by Brand Finance, the world's leading brand evaluation consultancy. China is ranked 3rd, surpassing Japan and Germany.  

Brand Finance publishes the Global Soft Power Index based on a survey of more than 170,000 respondents from over 100 countries to gather data on global perceptions of all 193 member states of the United Nations. Thanks to the scope of the survey, the Index is the world’s most comprehensive study on perceptions of nation brands, providing an in-depth analysis of the evolving status of soft power as nations navigate significant global changes and challenges.  

Soft power is defined as a nation’s ability to influence the preferences and behaviors of various actors in the international arena (states, corporations, communities, publics, etc.) through attraction and persuasion rather than coercion. Each nation is scored across 55 different metrics to arrive at an overall score out of 100 and ranked in order from 1st to 193rd. 

The report has found that at a time of global uncertainty and instability, economic credentials are increasingly important contributors to a nation’s soft power. Nation brand attributes such as 'strong and stable economy' and 'products and brands the world loves' emerge as key drivers of influence and reputation on the global stage. This trend explains the continued dominance of the world’s largest economies like the USA and China as well as smaller developed economies like Switzerland and the United Arab Emirates at the top of the ranking. Dominant nation brands are recording faster soft power growth (average +3.1 points in the top 50) than the rest of the ranking (average -1.3 for those ranked 51-193). 

The Philippines , known for its warm and welcoming people, climbed nine spots to 52nd place out of 193 nations with an overall index score of 39.8 out of 100 in the latest edition of the annual Global Soft Power Index by brand valuation consultancy firm Brand Finance.

Though the country’s performance could be better, its high score in the “people” metric “speaks volumes in terms of who we are as Filipinos,”. We’re nurturing, and we’ve reached other countries through different professions by always being rooted in malasakit (concern).

Source: Business World and BrandFinance

Philippine population seen among the youngest in the region — AMRO

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.

Source: Business World