- Category: Top News
06 Dec 2012
- Written by Shardei A. Bueno
THE Philippines is expected to reap its “demographic dividend” in the coming years as the number of working population in the country overtakes the dependents.
Mark Burlington, regional director of the Institute of Chartered Accountants in England and Wales (ICAEW), said the expected Filipino population that is estimated to increase by 85 percent in the next 60 years is ensuring a labor force that will safeguard the country’s competitiveness.
“Raising output means increasing productivity, not just in terms of quantity but also moving up to value-added knowledge and skills-based goods and services. The Philippines is a vibrant economy and there are increasing opportunities for the country to invest in a strong accountancy and finance sector in order to support businesses at home and attract investments from overseas,” he added.
ICAEW commissioned a report, titled “Economic Insight: Southeast Asia,” produced by the Centre for Economics and Business Research (Cebr), an ICAEW’s partner and forecaster. It provides more than 138,000 members a current snapshot of the region’s economic performance.
The report undertakes a quarterly review of Southeast Asian economies, with focus on its six largest of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
ICAEW Economic Advisor and CEBRs Chief Executive Douglas McWilliams said, “The Philippines is seeing real progress, both economically and politically. The clear election victory of [President] Benigno Aquino [III] promises political stability, which will encourage investment and consumer spending.”
He added that another boost should be provided by a peace deal with Muslim separatists announced in October, which will end the long-running conflict on southern Mindanao.
“This is another indication that governance is becoming more predictable and reliable. All of this is good news for growth, which looks likely to rise even if investment and production are lower than hoped,” McWilliams said.
Population growth over the next 60 years in Southeast Asia, he added, will ensure the competitiveness of the region at a time where populations begin to shrink in places like China, Japan and certain European countries.
“However, the rate of growth differs between countries and with the exception of Malaysia and the Philippines, other SEA [Southeast Asia] nations should benefit from a ‘demographic dividend,’ which sees a falling ratio of dependents to those in work—freeing resources and allowing living standards to rise,” the report said.
Other key findings of the report included:
n Small government leaves fiscal space for stimulus if necessary: Though government spending varies widely across Asean nations, the ratio of government spending to gross domestic product leaves significant space for stimulus measures, especially for middle- and high-income economies. With manageable public debt, Southeast Asian countries are in a position to boost growth through government expenditure in the case of a global recession.
n Commodity prices pose risk to Asean economies: Commodities have largely driven growth in Asean economies but the fall in prices of agricultural and oil products have limited export earnings. Crop failures around the world have also pushed up the cost of grain imports. This may affect domestic demand expansion as food makes up a large part of the average Asean household’s expenditure. As mineral prices decline, large projects by global mining companies in Indonesia have been put on hold. With mining making up a significant part of the Asean economy, a sharp slowdown in investment could affect national and regional economies.
n Stabilization, not rapid growth, likely in the future: It is clear the world economy has slowed this year. Most BRIC (Brazil, Russia, India and China) nations (except Russia) and major western economies have all underperformed expectations. The bottom seems to have been reached for many emerging markets but with industrialized countries struggling, stabilization is more likely than an immediate return to fast growth.
(Shardei A. Bueno)