Commentary: Philippines’ fertility decline will be the global economy’s problem

SINGAPORE: The next big demographic jolt is coming in a country whose human capital keeps essential portions of the global economy afloat. Its impact will be felt everywhere from London hospital wards and Los Angeles wharves to dinner tables across the Middle East.  

While still a relatively young nation, the Philippines is determined to reduce its birth rate, and sees much smaller families as a route to the prosperity enjoyed elsewhere. It wants a place in the pantheon of Asian success stories alongside nations like Singapore and Malaysia.

The archipelago of 115 million people has already made meaningful progress, thanks in part to the reduced sway of the Roman Catholic Church and the ensuing easing of restrictions on contraception.

Worries about a baby drought and decades-later silver tsunami of too many old people are for societies that have already grown rich. They are tomorrow’s problems. 

Family planning volunteer Remy Cabello embodies the changes underway – she raised two children but has a dozen siblings. “People are becoming more knowledgeable,” Cabello told me during her rounds in one of Manila’s poorest neighbourhoods. With smaller families, “they can budget their money, they can give a better education to their kids, give sufficient financial support and nutrition. They are taking care not just of their kids, but of their lives.”

FILIPINOS’ CRITICAL, UNDERAPPRECIATED ROLES IN GLOBAL ECONOMY

What matters for Manila is capitalising on the momentum generated by sharp declines in fertility and using the coming decade or two to invest in education, technology and infrastructure. Consistent and pronounced reductions in the size of families were key characteristics of the rapid economic take-off enjoyed by South Korea, Singapore, Taiwan, Hong Kong and mainland China.

That enabled huge inroads in curbing poverty and left the rising, increasingly urbanised middle class with more cash and an expanding array of consumer goods. For governments, the idea is to use the window to make the leap to industrialisation and a workforce equipped for a modern economy.

It’s a concept replete with opportunity, and huge hurdles, for the Philippines.

For the world labour market, though, this is a slow-burning challenge.

Filipinos perform critical, though often underappreciated, roles in social and economic systems far from home. This isn't simply about agencies in Hong Kong and Singapore having enough domestic helpers to supply middle-class households. Nor is it just guys working construction in the Middle East.

Healthcare systems in the United States and Europe have come to rely on nurses from the Philippines; recruiters fan out to colleges and clinics, offering spotting fees into the thousands of dollars for referrals of friends and colleagues.

The Philippines also supplies about a quarter of the seafarers that keep container vessels on the seas. On any morning along a busy avenue in central Manila, agents wave signs seeking ship pilots, cooks and maintenance crews. Touts offer payday loans to merchant mariners. For those looking to quickly get qualified, maritime textbooks are on sale. 

LATE TO THE DECLINE IN FERTILITY RATES

Until recently, the nation has been a very youthful standout in a region getting old quickly. 

It’s not just Japan and Korea; China’s population extended a historic decline last year. Lacklustre economic performances in Western Europe have been attributed to stagnant, or worse, demographics. 

For the Philippines itself, that would be a good problem to have. No sovereign nation should gear its development strategy around making sure that tony districts in Hong Kong or Dubai have enough live-in helpers. Nor is it the job of policymakers in Manila to fret about whether hospices in Minnesota or Ohio have enough staff.

We all like the stuff crammed into the holds of the hundreds of tankers delivering goods to our ports, but as consumers and households, it’s incumbent on us to be more aware of the labour that gets us through the day.

Henlyn Atanacio and her family are a great example. For generations, they have been going the distance. “I want to give my family a better life, which I can do abroad because of the higher compensation,” noted Atanacio, an associate dean at Manila Central University’s college of nursing.

She applied for a job in Canada and is hoping her husband and son can accompany her. Her sisters were both nurses in South Korea and France. Her mother, now in France, is a domestic helper.   

The urban professional class has needed little convincing that fewer offspring were desirable; they simply mirrored the inclinations of their cohorts in other up-and-coming economies.

A broader milestone for women came in 2012, with the passage of a bill that lifted many restrictions on the use and availability of contraception. Fought doggedly by religious conservatives, the law was a big win for women.       

Manila has come late to the decline in fertility rates that critics say are now dangerously entrenched across Asia. That’s what made the findings of the most recent five-year survey of the country's headcount, in 2022, so startling: The total fertility rate dived below 2.1 live births per woman, the level at which a population naturally replenishes itself.

An economic adviser at the Asian Development Bank described its retreat to 1.9 as “jaw dropping,” compared with the 2.7 logged in 2017 and the 3.0 recorded four years prior to that. While COVID-19 may have exaggerated the recent fall, no informed observer I spoke to on a recent trip quibbled with the direction.  

“NO MORE NANNIES IN SINGAPORE”

This isn’t an imminent crisis. The Philippine countryside isn’t about to empty, nor are robots going to replace waitstaff or check guests into hotels.

But the experience of wealthy economies is that once the trend toward smaller households begins, it can be devilishly hard – if not impossible – to reverse. Leaders may find themselves a generation or two later wondering where all the people have gone. Manila will need to be awake to this danger. Reliable data, and more of it, more often, is critical. 

Lisa Grace Bersales, executive director of the population commission, calls these concerns premature. Filipinos have the right, but shouldn’t feel the compulsion, to migrate for a paycheck.

“No more nannies in Singapore, that is what we hope for, and maybe no more construction workers in other countries,’’ she told me. “That’s what could happen. But, in our culture, if one sees that one has worked out of the country and seems to have big houses, good cars, they usually also dream of having such an experience... If we are successful, there will be less of them.”

More than half the nurses who complete their studies leave for work abroad. Pay and conditions are a big, often decisive factor. Ties to relatives overseas, many of whom are nurses themselves, also encourage the flow. 

The pandemic was a wake-up call. Local hospitals buckled as infections surged. At one point, authorities barred nurses from leaving the country. 

Vilma Bonifacio is the first to admit that she is an aberration. Also an associate dean, she opted to stay in the Philippines to be close to her children; her husband is a seafarer.

Bonifacio reckons that of her 1996 graduation class, only six remained behind. Around 75 per cent of current students will end up overseas, she estimates. “Our schools are cutting enrollments for the lack of teachers,” she lamented. “How can we sustain the number of nurses for the Philippines, or even globally, if the numbers are so short?” 

Exodus isn’t all negative. Remittances provide a steady flow of funds that account for around 10 per cent of gross domestic product.

That won't be turned off overnight, nor should it be. It’s part of the balancing act for Arsenio Balisacan, the prominent academic who is secretary of the National Economic and Development Authority.

FOOT SOLDIERS OF A DEMOGRAPHIC REVOLUTION

During the boom run of East Asian economies that began in the 1980s, sky-high growth bypassed the Philippines. While neighbours enmeshed themselves in manufacturing supply chains, the Philippines missed its time in the sun.

Harnessing the so-called demographic dividend is key to making amends.

The working-age population is starting to grow faster than dependent groups. That could easily add a couple of percentage points to economic growth over time.

“It’s a big bonus,” he told me. “Unfortunately, it won’t last long. In the Philippines context, it may last one to two decades.” The benefit of a second dividend will come only if the country can make this group more productive by investing in the quality of workers.  

While it’s time to jettison stereotypes about Filipinos having large families, there’s also a city-rural divide. The Manila area saw its total fertility rate decline to 1.2, well below the national figure, while it’s 3.1 in an autonomous region of the southern island of Mindanao.

“People are becoming more aware of their opportunities,” explained Carmela Aquino-Cabral, a fertility specialist at Dr. Jose Fabella Memorial Hospital, one of Manila’s largest maternity hospitals. “There’s more to life than being a mum.” 

The ground war matters greatly. One recent morning, I accompanied a team of volunteers from the Likhaan Center for Women’s Health into the Tondo district, one of the capital’s most impoverished. The lanes were narrow and muddy. Satay and fish cooked on open-air stoves; children scampered about while parents or grandparents leaned out the windows of makeshift shops.  

We were a few kilometres, and a whole world, away from the glass towers, fashionable cocktail bars and five-star hotels of the Makati enclave. It’s a regular beat for Cabello and her three colleagues.

These women are foot soldiers of a demographic revolution that's gaining converts block by block – they hope. “I do share my own experiences, I am using the pill,” said Cabello. “In the long run, people will believe in us.”   

There are no easy solutions for developed nations so reliant on imported labour. Strengthening tertiary education and vocational training is vital, as is addressing poor pay and working conditions for professions like nursing.

For its part, the Philippines must tread carefully – it still has a long way to go before it becomes an aged society, but there is always the danger of overcorrection and being left, like others in the region, with a labour shortage of its own.