Record-low fertility rate puts Philippines’ growth window at risk

By Justine Irish D. Tabile, Senior Reporter

THE PHILIPPINES must act fast to harness its demographic dividend and reach high-income status, analysts said, as a record-low fertility rate raises the risk of falling into the “aging before becoming rich” trap, analysts said.

At the same time, the Commission on Population and Development (CPD) has called for investment shifts in the country to maximize the window of opportunity amid a declining fertility rate.

“With the growing working-age population (aged 15-64 years), composing 63.9% of the Philippine population, investments should focus on developing our human capital, especially the education, health, and skills of our people,” it said in a statement on Tuesday.

CPD Undersecretary Lisa Grace S. Bersales said that population and reproductive health policies and strategies must be explicitly integrated with socioeconomic development strategies.

“Education and access to information are still key in ensuring that Filipinos achieve the number of children they desire, when they want it,” she added.

The country’s total fertility rate (TFR) reached a record low of 1.7 children per woman in the 2023-2025 period, according to the Philippine Statistics Authority (PSA).

The PSA defines the TFR as the number of children a woman has by the end of her childbearing years.

Foundation for Economic Freedom President Calixto V. Chikiamco said that the average age in the country remains relatively young at around 25 years old, giving the Philippines a few more years to reap the demographic dividend until it ages.

“The risk is that if the country doesn’t seize the demographic dividend to reach upper-income status, society may grow old before it becomes rich,” he told BusinessWorld via Viber.

“The country won’t be rich enough to pay for the pension and healthcare of its aging citizens,” he added.

The government had earlier envisioned the Philippines becoming a high-income economy under the AmBisyon Nation 2040 plan.

The World Bank currently classifies the Philippines as a lower middle-income country with a gross national income per capita of $4,470, just $26 below the upper middle-income country classification of $4,496-$13,935.

Bernardo M. Villegas, a professor emeritus at the University of Asia and the Pacific, said that the Philippines is now in a demographic transition, “remaining still young (the median age is still the lowest in the Indo-Pacific region at 26) with the population still growing at less than 1% annually.”

In his March 11 BusinessWorld column, Mr. Villegas said that assuming the fertility rate is near 1.9 through the mid-century, the Philippine population is projected to be 139 million by 2055. The population is estimated at 117 million as of December 2025.

“The country is still gifted with a demographic dividend with a large working-age population and slower growth of dependents. This endows it with the potential to benefit from its young population — as long as there are higher investments in education and skills development (4-5% of GDP) and productivity is increased,” he said.

However, he said the Philippines should make sure that the fertility rate does not drop below 1.9 as what has happened to South Korea and Spain.

“The Philippines should do its best to maintain fertility around the replacement level, invest heavily in education and health, strengthen families and the ‘inviolable’ institution of marriage, and use migration strategically,” Mr. Villegas said.

Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, said that the Philippines’ TFR of 1.7 cannot be read as “good or bad” in itself, as it will fundamentally depend on how the economy performs and the government responds.

“Clearly, the Philippines has entered a late stage of demographic transition with fertility falling from 2.7 or so in the late 2010s to below 2.0 in recent years. Albeit with a lag, this will eventually mean slower population growth and eventual population aging,” he said in a Viber message.

Despite the decline, he said that the Philippines is still within its so-called demographic dividend window, where the working-age population is still relatively large compared to dependents.

“However, there’s nothing automatic about the dividend, which only materializes with mass employment generation through national industrialization policy and structural transformation,” he said.

“This also has to be accompanied by ample public investments in health, education, and other social support systems. Without these, the demographic dividend risks being wasted with large working-age cohorts stuck in precarious, informal or underpaid work,” he added.

Mr. Africa said the risk of the Philippines aging without becoming a high-income economy is not caused by low fertility in itself but by weak social protection systems, underdeveloped public health and elder care, and constrained fiscal capacity.

“The real issue isn’t in demographics but in lack of industrialization policy, weak social welfare systems, and stubborn fiscal conservatism,” he said.

Mr. Africa said that he expects the labor force to continue growing but at a slower pace.

“But, again, the binding constraint isn’t labor shortage but weak job creation, low productivity sectors and non-industrial sectors, and even over-dependence on migration as a labor outlet,” he added.

Meanwhile, Mr. Villegas said that the Philippines needs to enforce a “proactive demographic and economic strategy” to avoid the “aging before becoming rich” trap seen in Thailand and China.

In particular, he said that married couples in the Philippines should be encouraged to have at least three children through financial support, affordable housing, and promoting family-friendly culture.

“Tax credits or subsidies for each child should be offered, following the examples of France and Singapore,” Mr. Villegas said, adding the government should stop all birth control messaging and instead promote a family-friendly culture.

“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,” he added.