The Philippines enjoys the status of being one of the fastest-growing economies in the whole of Asia. In 2023, it registered a 5.6% economic growth, surpassing both Vietnam and Malaysia to officially become Southeast Asia’s fastest-growing economy. Furthermore, the country is projected to grow by an additional 6.5% to 7% in 2024, reinforcing its status as one of the leading economies in Asia. In this article, we will explore several distinctive demographic factors driving the Philippine economy’s growth.
The Impact of Positive Demographic Trends
Demographics play a significant role in a country’s economic endeavors. This is particularly true for the Philippines, which has long leaned strongly on its human capital as its primary source of competitive advantage in the global economy. With this in mind, let’s explore why this is the case by examining some of the country’s notable demographic trends and analyzing their impact on the economy as a whole.
1. Population Growth
Total Population (2018 – 2028)
Source: Statista
First, the Philippines has the second-largest population in Southeast Asia, trailing only behind Indonesia, and currently ranks as the 13th largest globally. Despite the relatively conservative forecast for the country’s population growth from 2024 onwards, the graph above indicates that the population will continue to increase year-on-year, expected to reach the 120 million mark before the end of this decade. Furthermore, according to the Philippine Government, the country’s population may hit the 150 million mark by the 2050s, positioning the Philippines among the top 10 most populated countries globally.
This human capital is the backbone of the country’s ambitious “Vision 2050,” which aims to make the Philippines the 9th largest economy in Asia and 19th largest globally by 2050, which can then transform the country to become a “Developed Economy” or “First World Economy.”
2. Age Segmentation
Population Age Structure (2012 – 2022)
Source: Statista
Second, a key strength of the country’s demographic profile is its large base of eligible labor force. With roughly two-thirds of Filipinos aged between 15 to 64 — the legal working age in the Philippines — the country boasts the potential for higher productivity compared to regional peers like Malaysia and Vietnam, as well as aging developed economies in the Asia Pacific region such as Japan, Taiwan, and South Korea. In these more matured economies, the segment aged “65 and older” comprises a significant portion of the total population, contrasting sharply with the relatively much younger demographic structure of the Philippines.
Furthermore, the working-age segment of the population continues to increase, reaching a new high of 66% at the end of 2023. This positive trend benefits the Philippines significantly, as human capital is one of the country’s key exports. This is due to Filipino migrant workers playing a major role in national economic development by sending remittances back to their families in the Philippines, supporting the domestic economy.
3. Median Age
Population Median Age (Historical to Future Perspective)
Source: Statista
Third, the Philippines enjoys one of the lowest median ages in Asia, standing at 25.0 years in 2023. This median age marks the lower boundary of what many economists consider the “sweet spot” age range. Individuals within the 25-54 age bracket are generally considered at the peak of their working and earning capabilities. Since they are less likely to be in school full-time and are not yet of retirement age. Therefore, they can significantly contribute to the labor force, boost overall consumer spending, and enhance economic productivity.
Furthermore, despite the country’s gradual aging as it transitions into a developed economy over the next decades, the Philippines is not expected to hit the median age of 40—a benchmark common among its peers in Asia, such as South Korea, Taiwan, and Japan, which are experiencing much slower economic growth—until 2090. Thus, giving the Philippines plenty of headway to utilize its young population for its “Vision 2050” and attain the status of being one of the world’s developed economies with elevated standard of living.
4. Number of “Adults”
Population 18 Years Old and Up (2012 – 2022)
Source: Statista
Fourth, the country also has one of the region’s highest total number of adults. As of 2023, roughly 70 million Filipinos are 18 and older. This is crucial to count as “full-time” labor opportunities are largely only available to those at least 18 years old (legal age). The population in the 15 to 17-year-old range, albeit they can still work, are limited to work within the hours prescribed by the law.
Hence, as we can see from the graph, an increasing number of adults indicates a growing pool of people eligible to undertake work considered more valuable, leading to higher productivity output for the country as a whole. Moreover, adults typically have higher purchasing power compared to younger individuals, which further boosts consumer spending and, in turn, stimulates economic growth.
5. Median Wealth of Adults
Median Wealth per Adult in the Philippines (2012 – 2022)
Source: Statista
Lastly, examining the median wealth of working-age adults, we can observe a dramatic increase in their personal wealth. Since 2018, median wealth has surged by 47.6% to $3,155 in 2022, the last year it was surveyed. This significant growth occurred despite the nationwide lockdown in 2020, suggesting that Filipino adults were generally able to navigate the pandemic without resorting to drastic financial measures. Furthermore, this trend also illustrates the effectiveness of the government’s stimulus program in preserving the population’s wealth.
Hence, a rising median wealth is crucial to the country’s goal of becoming a developed country by the 2050s. In addition, this statistic aligns with the World Bank’s optimistic projection of the Philippines becoming an upper-middle-income country by 2025.
Conclusion
Overall, these positive demographic trends highlight their crucial role in fueling the Philippines’ growth engine and achieving the country’s lofty economic pursuits. These objectives include sustained high levels of economic growth in the coming decades, an elevated standard of living, and augmented per capita wealth for its population. Ultimately, these efforts support the ambitious “Vision 2050” goal for the Philippines to become one of the world’s leading and largest economies.