The Philippines' labor force will expand faster than most of its regional peers in the next decade, Moody’s Investors Service said on July 2
Between 2012 and 2025, “The labor forces in Laos, the Philippines and Cambodia are expected to grow by more than 20%,” the credit rating agency said in an article in the July edition of its quarterly newsletter, Inside ASEAN.
Citing World Bank estimates, Moody’s defined the labor force as the segment of a country’s population between 15 and 64 years old.
“The population of ASEAN member countries aged between 15 and 64… will increase by 64.8 million, or 16%, to 471.5 million between 2012 and 2025, according to an estimate by the World Bank,” said the agency.
Laos is primed to see the greatest expansion in labor force among the Asian countries cited in the article, with above-30% growth expected from 2012 to 2025. Next is the Philippines, which is expected to see an expansion above 25%.
Malaysia, Indonesia, India and ASEAN as a whole follow in that order, all to see labor force growth between 15%-20% in the same period.
Singapore was also primed to see an expansion of about 10%, but Moody’s noted that stricter immigration laws introduced in the state since 2012 will prevent this.
But the labor force of China, Thailand, South Korea, Hong Kong and Japan are all expected to contract, with Japan expected to see the steepest decline of about -10%.
“The political and economic grouping of ASEAN countries is better positioned to harness its growing work force to boost economic growth,” Moody’s said, comparing it with South Asia, which is also expected to see high levels of growth.
“ASEAN’s young and growing labor force, coupled with rising wage pressures in China, will stimulate investment in manufacturing.”
The agency said, “ASEAN countries with relatively lower labor costs, such as Cambodia, Vietnam and Indonesia, [will] benefit most from the shift in manufacturing investment out of China.”
Moody’s said it expects “domestic consumption to increasingly drive the ASEAN economies, with growth fueled by a young and rapidly growing urban, middle-class population.”
“This trend will help ASEAN countries cushion the impact of a more challenging export outlook, particularly resulting from a slowdown in Chinese demand.”