Demographic dividend until 2045

By the end of this year, it is projected that the Philippines’ dependency ratio —the ratio of the population ages 0 to 14 plus those over 65 years old divided by the population 15 to 64, considered the working ages, will fall below 50 percent, meaning there would be more Filipinos who are economically productive than those who will be dependent on government social welfare protection.

United Nations (UN) population forecasts suggest that the predominant working-age population in the country will continue to grow until around 2045.

Multilateral development agencies believe such a trend can, under the right policy settings, liberate resources for investment in economic development and family welfare, spur growth, and increase per capita income.

Research indicated that demographic transitions were responsible for 10 percent to 50 percent of East Asia’s economic growth from 1965 to the mid-2000s (Moroz and others, 2021).

In the period between 2060 and 2070, the dependency ratio in the Philippines is expected to exceed 50 percent, with the national population beginning its decline around 2060.

This shift will denote the Philippines’ transition into the later stages of the demographic dividend period, characterized by an increasing proportion of older dependents, according to the International Monetary Fund.

The IMF, however, warned that the implementation of policies to harness the demographic advantage is essential for harvesting dividends and attaining macroeconomic and developmental goals.

These policies should focus on providing access to quality education, health services, employment opportunities, and financial services for the younger population, among other priorities.

Employment opportunities will be particularly critical as the Philippines will need to create at least 12 million new jobs between now and 2050, or an average of about 450,000 per year.