Anyone driving along the Catanduanes Circumferential Road today cannot help noticing huge trucks carrying tons of building materials to construction sites on and off the highway.
These construction sites include not only new homes, but also commercial buildings, additions to schools, government facilities, roads and other infrastructure projects.
All of this construction activity is a good sign. It is an indicator of a robust economy.
And the economic data support this observation.
According to the Department of Finance, the national economy grew at a rate of 5.6 percent in 2024, the second fastest in the Association of Southeast Asian Nations, after Vietnam.
In terms of economic growth, the Philippines is also well ahead of the four Asian Tigers: South Korea, Taiwan, Hong Kong and Singapore.
Indeed, the Philippines is a leader of the new “Tiger Cub Economies”, which also include Indonesia, Malaysia, Thailand and Vietnam.
Furthermore, the growth rate of the Philippine economy is expected to increase this year and next.
This economic growth spurt is due in no small part to a vibrant, growing population of educated young people – the nation’s demographic dividend.
This demographic dividend should not be taken for granted however, because the birth rate in the Philippines is on the decline.
The phrase “demographic dividend” is used by economists to refer to the situation that occurs when the size of the working age population, usually defined as people aged 15 to 64, exceeds the size of the nonworking population – children and the elderly.
These observations came into focus recently when the Philippine Statistics Authority reported that there were 3,559 live births in Catanduanes Province in 2024 (Catanduanes Tribune, Feb. 12, 2025).
The projected population of the province last year was 288,832.This figure means that the crude birth rate in the province was 12 per 1,000 population.
The figure for 2022 was 4,093 live births, or 14.8 per thousand population, so it appears that the number is on the decline. Data for other years was unavailable.
The size of the working age population is crucial for understanding a country’s economic potential and workforce needs.
Ageing residents require more resources – health care, pension payments and social services.
When the working age population grows larger than the remainder of the population, the result is fewer dependents and a larger labor supply, which in turn lead to greater productivity.
And greater productivity leads to greater savings and improved health and education.
Today the median age of the Philippines is 25.7, and it is expected to reach 26.1 later this year. But this figure is still low compared with the figure from other Southeast Asian nations.
The median age is 49.9 for Japan, 45.1 for South Korea, and 40.2 for China, according to the CIA World Factbook.
All of these populations will be in their mid-50s by 2050, according to Statista, an online website that reports business and economic data.
Another way to understand the significance of the number of births is to look at the replacement rate.
The replacement rate is the average number of children per woman needed for each generation to maintain a constant population size.
This figure varies from country to country, depending on the health of the population. But generally speaking worldwide, the replacement rate is considered to be 2.1.
A related measure is the total fertility rate. This is the average number of children born per woman in a specific population, such as the population of the Philippines.
So, if the total fertility rate equals the replacement rate, then the population remains stable.
The total fertility rate of the Philippines has been in steep decline since 1955, when it was 7 births per woman – typical of many developing countries at that time.
It fell below 2.1 after 2020 and continues to decline. Today it is 1.9, according to several sources.
The total fertility rate for the Bicol Region historically has been higher than the national average. It was 4.1 in 2013, according to the National Demographic and Health Survey, and it dropped to 3.2 in 2017. The figure for other years was unavailable.
So, while the Philippines now is experiencing healthy growth due in part to its youthful workforce, this feature of the economy will weaken in time and will need to be replaced by something else, such as greater labor productivity – that is, greater output per worker, which can be achieved through technological innovation.
This decline in the total fertility rate will not have an immediate effect, however, because it takes two or three generations for the effects to be seen in the broader population.