Malayan Banking Berhad (Maybank), Asean’s fourth-largest bank by assets, projects growth averaging 7 percent for the Philippines this year, driven in the main by the country’s so-called large demographic dividend.
Maybank Group CEO Datuk Abdul Farid Alias said the country’s potential gross domestic product (GDP) growth was seen averaging 6 percent to 7 percent, but that its demographic dividends, borne of a young and upwardly mobile population, were seen pushing local output higher to 7 percent up to 8 percent.
“Our economic outlook is very positive and that’s why we’re here and the global investors, as well. What we see in the marketplace is a robust economy and its fundamentals strong. The 7-percent GDP is possible. The 7-percent to 8-percent growth rate is the rate that keeps moving in Asia,” he told the BusinessMirror.
He sees the Philippines reaping huge demographic dividends that will help push growth higher for several decades to come.
He said the Philippines has a young population, with a median age of 23, and a declining fertility rate that will lead to an increase in the number of working adults who will drive domestic demand and spur economic growth.
“The lower fertility rate will impact the Philippines’s population structure, resulting in an increase in the size of the work force relative to young and old dependents. This could lead to a rise in disposable income and the doubling of the middle class, which bodes well for the Philippines where private consumption is the bedrock of its economy, accounting for about 70 percent of total GDP,” he said at the lender’s Invest Asean Philippines conference.
Farid added that the Philippines is in a good place, with strong GDP growth, a structural current-account surplus and a robust banking sector to finance future growth.
To reap the demographic dividends, Farid said the right policies need to be in place. He cited education and labor policies, as well as measures such as building better infrastructure, as key to improving employment and productivity for the working-age adults who will generate growth for the $272-billion Philippine economy.
The Philippines is rated as one of the fastest-growing economies in Asia, with average GDP growth sustained at some 6 percent the last five years. The country continued to report respectable growth of 5.2 percent in the first quarter this year.
Maybank hosted the Invest Asean Philippines, with the theme “Riding the boom: Asean’s demographic dividends,” at a Makati City hotel.