Our country has just recorded a sharp drop in our fertility rate from seven children per woman in the 1960s to 1.7 today, below the replacement rate of 2.1. The collapse is one of the fastest ever recorded for a highly populated nation.
This massive drop means the average family size in the Philippines has shrunk by roughly 30 percent over the span of 65 years. That’s probably because of the high cost of living and also, our young people are too engaged with their smartphones to have time to flirt.
Looking back, I never would have thought a drop like this was possible, given our Catholic faith and the seeming normality of reproducing like rabbits. My mother was part of a family of 14 children and my grandmother who lived up to 102 years, was no worse for it.
It is the same situation among some of our ASEAN neighbors. Thailand, with its highly successful family planning program, is now rapidly graying. Japan and South Korea have long been growing old, but at least they became rich first.
According to The Economist, countries facing the phenomenon of getting old before getting rich are those experiencing rapid declines in fertility rates and rising lifespans but before their economies have reached high-income, developed status. That sounds like us.
For a country like ours, not only will there be less workers to boost the economy, governments must divert resources to care for the increasing number of old people and provide pensions before we are able to build deep economic wealth.
Countries that age before growing rich fail to seize the full benefits of a demographic dividend that is triggered when the number of working-age adults (ages 15–64) significantly outnumbers young and elderly dependents.
The demographic dividend, a Facebook post by Marvin Germo points out, is one of the most valuable and most time-limited economic opportunities available to any developing nation.
We should be exploiting it now but we have failed to appreciate how valuable it is and we are letting it pass. Based on current data it expires for us in approximately nine years, Germo wrote.
The Economist explains the theory behind the so-called demographic dividend:
“A bulge in a country’s working-age population is a blessing. Lots of workers support relatively few children and retired people. So long as the labor market can absorb a surge of job-seekers, output per head will rise. That can boost savings and investment, leading to higher economic growth, more productivity gains and developmental lift-off. Yet for countries that fail to seize this opportunity, the results can be grim — as many developing countries may soon discover.”
Germo writes that “the Philippines has been inside this dividend window for approximately thirty years. The current dependency ratio stands at 48.9 according to World Bank 2025 data, meaning there are approximately 49 dependents for every 100 working-age Filipinos… PSA projections indicate that the proportion of working-age Filipinos will peak in approximately 2035.
“The elderly dependency ratio, currently at approximately 8.2 percent of the working-age population, will rise steadily as fertility, at 1.7, feeds fewer young people into the base of the population pyramid while the existing population ages upward through it.
“The economists who study demographic transitions call this sequence a demographic wall. And the most dangerous version of the wall is what they call ‘the aging before becoming rich trap.’
“It describes exactly what happens when a country’s population structure shifts from productive to dependent before the economy has built the institutional infrastructure, the pension systems, the health care capacity, the productivity-driven growth engines necessary to sustain living standards without the automatic growth that the demographic dividend was providing.”
That’s our big problem now. And from all indications, our officials are not the least concerned about it. That’s a problem our grandchildren are doomed to deal with.
Smaller families are becoming our new normal. The sharp drop in the Philippine birth rate provides a good opportunity for catching up while at the same time bringing new challenges for economic growth.
The drop in fertility means there are fewer mouths to feed. A crashing birth rate should allow the government to pivot from building thousands of new classrooms just to keep up with volume, to upgrading the quality of existing classrooms and improving the quality of teaching.
With fewer youth entering the DepEd pipeline, the government can have more to spend on advanced Technical and Vocational Education and Training (TVET), digital literacy and engineering programs.
However, a sustained “baby bust” means there will be less future taxpayers at a time when the government needs greater fiscal space most.
This means the government will soon lack the funds to cover future health care, pensions (SSS, GSIS, military/police) and to pay the national debt that grew during our watch. The country will be forced to take on the aging burdens of a developed nation while still trying to generate resources to cover the needs of a struggling middle-income country.
Also, if the local birth rate plummets while millions of young adults continue to leave the country for better jobs abroad, the domestic workforce will hollow out faster than expected to the detriment of economic growth.
How do we deal with the challenges this declining population brings?
The same things that several administrations have been ignoring or failing at over the past few decades: vastly improving the quality of education to ensure a productive workforce in the era of AI; fix the problems with pensions and health care funding especially to cover needs of an aging population and attract foreign investments to build export industrial capacity.
We have to get rich to build the funds necessary to take care of our people as they grow old. The other way around, which is our current path, will simply be a painful disaster for our people.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on X @boochanco