PHL’s young population seen to benefit banking system

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Category: Top News

22 Mar 2014

 

Written by Bianca Cuaresma

THE Philippines’s young population is likely to benefit the Philippines banking system’s loan portfolio in the coming years as a significant part of them are seen to become consumers, the Bangko Sentral ng Pilipinas (BSP) said.

In a recent event, BSP Governor Amando M. Tetangco Jr. said the prospects of consumer financing in the country “remain promising” as the Philippines’s population growth is substantially younger than other countries in the region.

Tetangco, citing World Bank numbers, said that as of end-2012, about 35 percent of Filipinos were younger than 15 years old. This is higher than the rest of the members of the Association of Southeast Asian Nations (Asean), which averaged only 25.8 percent.

Likewise, the country’s 15-below age rate was higher than the developed countries in Asia, particularly China, Japan and South Korea, which only averaged 17.7 percent. Meanwhile, only 19.3 percent of the population of North America was below 15 years old, while the number was still lower in Europe at 15.3 percent.

“What these numbers mean is that the Philippines will see a greater proportion of its population becoming consumers in the next few decades,” Tetangco said.

“This leaves the future market for consumer needs very potent…. Clearly, the demographics favor you,” he added, addressing the thrift bankers in the recently held Chamber of Thrift Banks 2014 National Convention.

Given the bright prospects brought about by the demographic “sweet spot” of the country in the coming years, as well as the upcoming Asean Banking Integration, Tetangco said that banks in the country would have to prepare to be able to reap the benefits of the events that are to take place.

“Unfortunately, the potential that is Asean and our own demographic advantages do not, on their own, create balance sheets. There are still strategic decisions to be made and tactical plans to be executed for these identified positives to be reflected as reality on your balance sheets,” Tetangco said.

The BSP officials earlier said the Asean Banking Integration Framework is seen to commence about five or more years from 2014. 

Bianca Cuaresma