Population decline: Greatest threat to humanity
(Part 3)
The Philippines is well positioned to avoid the worst consequences of population decline and ageing. It is still a young country today with a median age of 26. Together with many African countries and almost alone in the Indo-Pacific region, it is enjoying a demographic dividend, which is rapidly narrowing in its ASEAN neighbors, Indonesia and Vietnam. It has to make sure that ageing is contained in the next two decades by preventing fertility from dropping to levels much below the 2.1 babies per fertile woman. Current fertility today is around 1.9 to two babies per woman, already slightly below replacement. To avoid the “ageing before becoming rich” trap — which has already ensnared both Thailand and China — the Philippines needs a proactive demographic and economic strategy.
Some obvious economic strategies that can encourage married couples to have at least three children each are enumerated below:
• Because the traditional desire for children is inherent to a Catholic culture, married couples at the lower-income levels should be granted financial support for every child born. These financial incentives can take several forms. They can actually involve direct cash payments for every child born or there can be subsidies for the hospitalization and the initial feeding of the infants for the first 1,000 days of their existence as has already been implemented successfully in the province of Quezon and elsewhere.
• The Government should actively promote partnership with the private sector in the socialized housing program mandated by law. Affordable housing is key to family formation. The law should be strictly enforced, especially in regions where there is a significant increase in job opportunities because of the proliferation of industrial zones, as in the case of Southern Tagalog and Central Luzon. Childcare facilities should be subsidized in these regions that are densely populated like export-processing zones and other industrial areas that are increasingly attracting factories that sell to the domestic market. Tax credits or subsidies for each child should be offered, following the examples of France and Singapore.
• All birth control messaging, especially from the State, should stop. What should be promoted is a family-friendly culture rather than excessive population control messaging. In fact, as is already happening in China, artificial contraceptives should be heavily taxed. The goal (which should be part of the AmBisyon 2040 vision) is to make it economically and socially easier (maginhawa) to raise two to three children.
As population growth slows, there should be serious efforts to support the productivity increase of human resources. Among educational reforms should be greater emphasis on the STEM track in basic education, the promotion of digital literacy, and a shift to technical or vocation training away from purely academic programs in college. Both public and private resources should be mobilized to promote nutrition and health among children, especially in early childhood to prevent stunting and malnutrition. Filipino students perform poorly in international achievement tests because a good number of them have had their brains damage in early childhood because of undernourishment and malnutrition. There should be continuing efforts to upskill, reskill, or retool the teachers in basic education, especially in digital learning tools.
On a personal note, at the age of 87, I can state with all humility that I am still as productive as an educator as when I started teaching at the age of 18. My mother, who lived up to 102, continued to provide her children, grandchildren, and great-grandchildren, with a very attractive home environment. Not all those who are ageing must stop working. We should gradually raise the retirement age (now 60 for the private sector and 65 for government). We should encourage part-time or flexible work for seniors, especially equipping them with all the digital tools to do much of their intellectual and professional work online. Manual workers should be provided by the TESDA-supervised schools with opportunities for reskilling and upskilling. In consonance with Filipino culture, we should promote community-based elderly care rather than the institutional care that is prevalent in Western societies. We should take a close look at Japan’s model of “active ageing.”
As we face more and more labor shortages in the future, we should invest more in the technology of what is called the Industrial Revolution 4.0 (Artificial Intelligence, Robotics, Internet of Things and Data Analytics). These are especially useful in increasing the productivity of service workers who account for 60% of our labor force and in which productivity has been the lowest. Many household chores, in which a large part of our service workers has been employed, can be replaced by robots. The same can be said of those in the hospitality sector, except for those at the forefront where humans still are desirable (especially with the soft skills of Filipinos).
The Philippines (together with India) will continue to have a competitive advantage in the BPO-IT sector even as the industry migrates to more knowledge-intensive work such as animation, legal documentation, and medical transcription as call centers are increasingly operated by AI. It is encouraging to see industry associations related to these sectors invest in the upskilling, reskilling, and retooling of their workers so that they can migrate to more knowledge-intensive work.
The ageing problem will victimize most intensely the highly developed industrial countries like Japan, South Korea, Italy, Spain, and Germany. Thus there will continue to be a high demand for Filipino service workers like caregivers, nurses, hospitality workers, IT personnel, and teachers. Philippine service workers will continue to be in great demand abroad. It is highly unlikely that we can completely stop the so-called brain drain, i.e., Filipinos becoming overseas workers. One way of mitigating the impact of the outward migration of Filipinos is to create incentives for the return of OFWs through tax breaks and the support of local business. There should be a policy to encourage temporary rather than permanent migration. There should be a continuing effort to match our educational programs with the demands of the domestic market.
There is an urgent need to strengthen pension and health systems as early as possible. Before our elderly population explodes, there should already be efforts to reform and expand PhilHealth and universal healthcare coverage. Both SSS and GSIS should also be reformed to ensure long-term solvency. Promote the development of private pension plans and encourage savings for retirement.
The Department of Economy, Planning, and Development (DEPDev) and the Philippine Statistics Authority (PSA) should regularly monitor and plan for fertility trends, ageing rates, and labor force projections. The data should be linked to AmBisyon Natin 2040, which envisions a “matatag, maginhawa, at panatag na buhay para sa lahat (stable, comfortable, and secure life for all).”
(To be continued.)
Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.
