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PH window on demographic opportunity closing fast

The Philippines is in an ideal position to achieve its much-pursued demographic dividend in the near future, but needs to improve on some socioeconomic preconditions before its window of opportunity closes soon.

This was revealed by Prof. Michael del Mundo of the UP-Population Institute (UPPI) in an online presentation during the Joint Side Event of the 55th United Nations’ Commission on Population and Development summit (CPD 55) on April 21.

There, Prof. del Mundo disclosed that the country, though very much poised to level with its Asian neighbors such as Thailand, Indonesia and South Korea in gaining demographic opportunity, is also in a position of missing the desired condition outright if it fails to address critical areas of concerns. This, as a great majority of regions in the archipelago are far behind in achieving certain criteria, particularly the local support ratio.

According to him, the country needs to fulfill two key factors to benefit from the potential demographic dividend: (1) hasten the demographic transition to create a large and long demographic window of opportunity, and (2) capitalize on potential economic gains by this window by ensuring economic opportunities for the population.

Indicative of their readiness to attain demographic dividend, the professor presented the 17 regions’ support ratio—a figure signifying the number of individuals a worker supports, including himself/herself. A ratio of 0.5 means a worker will be supporting two individuals: the actual worker, and another consumer. For a support ratio less than 0.5, each effective worker is supporting more than two effective consumers.

He said only three regions are ready to reap the benefits of their demographic transition: the National Capital Region with a support ratio of .623, CALABARZON with .502, and Cordillera Administrative Region with .49. Those lagging behind are Regions 9, 6, 4b, 5, 8 and the Bangsamoro, which are characterized by “having a relatively higher number of effective consumers compared to the number of effective workers.”

In obtaining their demographic dividend, Prof. del Mundo observed several challenges among regions that have similarities, but with varying magnitudes: “Lagging regions have high fertility rates—regardless if the births were planned or unwanted. Most areas also face low youth participation in the labor force and employment, as well as markedly smaller women in the labor force, compared to men. Lack of a highly educated workforce is also a pattern, on top of below national average labor income.”

“While it is necessary to lower fertility and mortality rates, they will not be sufficient, as reaching for the demographic dividend is not limited to population dynamics,” the professor said. “Ensuring economic opportunities for Filipinos means workers are healthy, educated properly, and their skills are well-matched with their jobs.

LABOR AND WORK ARE KEY

For Prof. del Mundo, no demographic dividend will be possible without economically productive workers: “To fully capitalize on the demographic window of opportunity, the labor force participation rate and employment rate for both men and women, and especially the youth, must be kept high, and that labor income should also be sufficient for workers to have savings and investments which ultimately lead to upward economic mobility for households.”

He added that “for the youth, there is also a need to create better labor market conditions and employment. Financial literacy, financial inclusiveness and increased income opportunities are also requisites to improve savings build-up.”

Prof. del Mundo however cautioned that, while the demographic dividend is essential to economic growth, “key policy reforms and effective policy implementation must be achieved through a whole-of-government approach to take advantage of the benefits brought by the demographic transition.”

ECONOMIC REBOUND

Meanwhile, Socioeconomic Planning Secretary Karl Kendrick Chua highlighted the country’s strong commitment in accelerating inclusive economic growth, aided by the International Conference on Population and Development, or ICPD, Program of Action. It was adopted by 179 member-states, including the Philippines, in 1994.

Chua relayed that after a temporary decline in 2020 caused by the onset of the COVID-19 pandemic, the local economy took a positive turn last year, which grew by 5.7 percent, “exceeding market expectations,” with robust growth supported by the success of the country’s vaccination program enabling full economic reopening and recovery.

In terms of reproductive health, the country’s estimated total fertility rate, he confirmed, has been consistently declining in the past two decades, and in 2021 was recorded at 1.8 children per Filipino family or couple.

For his part, Population and Development Undersecretary Dr. Juan Antonio Perez III reiterated Chua’s assertion of placing the poor and vulnerable at the center of development strategies. He shared that the Philippine Development Plan, which discusses the attainment of the demographic dividend on Chapter 13, will prioritize regional equity as among four pillars that will help the country achieve rapid and more inclusive growth, which also cover smart infrastructure, innovation, as well as climate-change mitigation and adaptation.*

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