PHL eyes demographic dividend with slowing population growth

By Carmina Angelica V. Olano
Researcher

VICKY MARIANO, 46, stretches her P12,000 monthly income from cleaning, washing clothes and cooking for another household as she tries to raise six children, all below 15 years old. She is always on the lookout for other income sources such as selling snacks.

“Life is easier if you have few kids,” she said in Filipino. “Even if it’s difficult now, I’m hoping that the family could earn more once they mature and start working.”

On a larger scale, a country faces the question of whether the economy can grow while its population explodes. It seems easy to grasp that an economy with too many people would struggle to provide jobs. Some would argue that more people means more productive workers in the future.

Philippine population growth has been moderating for more than two decades now, and is expected to grow by 1.52% in the last half of the decade. This is slower than the 1.73% growth between 2010 and 2015, according to Commission on Population and Development (POPCOM) citing Philippine Statistics Authority (PSA) data.

The population will probably reach 108.7 million by July, 1.38% or 1.5 million higher than a year earlier.

“We welcome the new information from the PSA — proof that our nationwide efforts on reproductive health as well as family planning are yielding positive results,” Juan Antonio A. Perez III, executive director of the POPCOM, said in a statement.

A decline in the nation’s younger population has eased overall population growth, he said. The share of Filipinos aged zero to four years is expected to drop by a point to 10.12% this year from 11% a decade ago, while the 0-14 age group will fall by 4 points to 30.14% from 34%.

Meanwhile, Filipinos in their working age — 15-64 years old — are expected to reach 70.3 million, or more than two-thirds of the population, from 62% in 2010. Filipinos 60 years and older are expected to reach 9.69 million this year, making up 8.8% of the population.

“With growth rate of more than 4% between 2015 and 2020, the seniors’ numbers are growing at a faster rate than other age groups,” Mr. Perez said.

“We should not fall into a state of complacency. We should keep in mind that our country still has one of the highest population growth rates in the Association of Southeast Asian Nations region.”

Lingering issues remain, including limited resources amid climate change, the influx of people from the provinces to urban areas, and the rise of adolescent and teenage pregnancies nationwide, Mr. Perez said.

DEMOGRAPHIC DIVIDEND
“Slower population growth is good for our economy,” National Economic and Development Authority Undersecretary Rosemarie G. Edillon said in an e-mailed reply to questions.

This would mean there are enough classrooms, hospitals, roads and houses for everybody, she pointed out. “But what we want is a lower birth rate as the reason for slowing population growth.”

Ms. Edillon expects the country to reap the benefits of slower population growth in about a decade, or earlier if more Filipino women can be employed and unwanted pregnancies are cut. Fewer births, she added, would lead to higher per capita income.

“If they decide to spend some of the higher disposable income and additional spare time — in the case of mothers — to improve their human, physical and financial capital, then they could have even higher incomes in the medium to long term,” she said.

The economy can grow faster in the medium to long term and more Filipinos can be lifted out of poverty as a result, she added. This is because more people can work while supporting fewer dependents.

This could lead to a demographic dividend — economic growth brought about by a change in the age structure, typically brought on by declining fertility and mortality rates.

Popcom’s Mr. Perez cited the need for certain interventions to maximize economic gains.

“Savings from health and education services for the youngest age groups should be reallocated to other health and education services that will lead to a highly productive work force, which then contributes to higher gross domestic product,” he said in an interview.

Smaller families with higher incomes can invest in education and health, Mr. Perez said, adding that a demographic dividend can be achieved “when all these interventions bear fruit.”

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, said too many people competing for jobs had led to higher unemployment and underemployment rates.

“The rapid population growth rate in previous years has created considerable pressures on the nation to generate sufficient jobs as well as to provide housing and infrastructure for the fast-growing population,” he said.

Bernardo M. Villegas, an economist at the University of Asia and the Pacific, said a young and growing population that speaks English well would add to about 10 million Filipino workers overseas who earn more than $30 billion yearly, not to mention about $25 billion from the business process outsourcing sector

“A young and growing population increasingly belonging to the high-middle income sector is also a powerful driver of rapid growth of the domestic market for all types of consumer goods and services,” he added, citing the more than 60 million Filipino “domestic tourists” stimulating the demand at hotels and restaurants.

The Philippines, like most countries, desire a situation where a stable population can reap the benefits of sustainable development, Mr. Perez said. This means a woman having two children and reducing adolescent and teen fertility to a minimum.

“It is at the household level where we would like to see improvements in the quality of life,” he said. “Fewer children or having the number of children one can afford leads to increased household savings, improved nutrition and better educational opportunities.”

Mr. Villegas expects the ratio of two kids for every mother not earlier than 2030.

“Filipino families will always have a preference for children. That means that the average Filipino family will have 3 or more children for a long time to come,” he said.