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Being in a “demographic sweet spot” does not guarantee any economic growth, an analyst said, adding that the country’s potential progress will depend on its leadership ability to create the conditions needed to unlock this potential.
Leonardo Lanzona, economist at Ateneo de Manila University said that issues like poverty and malnutrition in the country suggest that these conditions are not being met.
The concept of “demographic sweet spot” means that a country has a high proportion of working-age individuals relative to dependents. A growth in the working age population equates to having more people turning productive.
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But according to the World Bank, only 52 percent of workers’ potential is being realized. For Lanzona, this reflected in the weak share of the manufacturing sector.
Last year, the manufacturing sector only accounted for 18 percent of the country’s gross domestic product, making it the lowest share since 2000.
To help people reach their highest potential, specific strategies and policies are needed, the economist said.
A key focus of this program is to improve the quality of education and health services. The first step is to enhance basic education. However, it’s also crucial that government investments in education and training match the needs of the job market.
“The problem is that we may produce an oversupply of skills that are no longer demanded by firms in light of digital transformation. In this case, the direct effect of government investments will only produce lower wages,” he added.
Government plans
In a separate interview, National Economic and Development Authority Secretary Arsenio Balisacan emphasized that the Marcos administration’s development plan focuses on creating high-quality jobs.
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“Migration is just an option, but job opportunities must be [available] here because the social cost is also very high that members of family may be separated,” Balisacan said.
“So what we are trying to change is the situation from our people’s perspective on the economy. They can only improve their situation if they leave the country. We want to change that narrative. We want to create jobs here. But it must be high quality jobs,” Balisacan added.
Balisacan also highlighted that the service sector is projected to thrive, particularly in high-value areas such as information technology, business process management, and tourism.
“I think our health and education sector is also promising, especially for health because that can be in our strategy. Health services and tourism can be packaged as complimentary but outside of those sectors, you also have agriculture and particularly the food sector,” he said.