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Saturday, December 9, 2023

Rising population of workers expected to sustain economic growth—Balisacan

NATIONAL Economic and Development Authority Secretary Arsenio Balisacan said Monday the growing population of workers will drive economic growth in the coming years.

Balisacan said in a public hearing at the Senate on the Fiscal Year 2024 National Expenditure Program the country’s working age group was now growing faster than the overall population.

“This is what we call a demographic dividend that adds around 3 percentage points to GDP [gross domestic product],” Balisacan said.

Government data showed that as of August 2022, the working-age population, covering those 15 to 64 years old, made up 63.9 percent of Filipinos, up from 63.3 percent in 2015 and 59.1 percent in 2000.

“Apart from the usual other sources of GDP growth…The working age group can fuel the country’s growth for several decades,” he said, adding the median age of the country’s population was in the low 20s.

“We can worry about the ageing population in about four decades from now,” Balisacan said, referring to those 60 years old and above.

Available data from the Philippine Statistics Authority website showed that the country has 109.03 million total population as of May 2020.

NEDA defined “demographic dividend” as the economic growth experienced by a country as a result of the change in the country’s population structure. It is the product of the demographic transition, which is characterized by markedly declining mortality and fertility rates, resulting in the shrinking of the dependent age (0-14) group and expanding of the workforce (ages 15-64).

This transition leads to steadily rising savings and investment rates and faster economic growth and improved living standards.

NEDA said with the number of productive working-age population at its highest, the economy’s growth sharply accelerates. With a bigger workforce that can generate higher income and a less dependent population, the government can allocate its resources for economic development and social services (education, health and nutrition).

This is also often referred to as the demographic-economic window of opportunity.

East Asian countries like South Korea, Taiwan and Hong Kong started reaping the dividend as early as the 1980s. Singapore and Thailand got to this point in the 1990s, NEDA said.

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