As the world population surpasses eight billion, the Philippines on the other hand is experiencing a new low in its fertility rate—the lowest it has ever been in decades. The country now boasts the region’s third lowest fertility rate after its neighboring countries, but what does it exactly mean for the economy at large? Will this affect your buying or selling decisions for an RFO house and lot? Let’s find out.
Philippines’ Fertility Rate, Lowest Since the 1970s
The Philippines is now witnessing a sharp decline in the Total Fertility Rate (TFR) this year, with the Philippine Statistics Authority (PSA) reporting that the birth rate among Filipino mothers aged from 15 to 49 has decreased to 1.9 children born in 2022—a drastic plummet from 2.7 children in 2017.
On the other hand, the fertility rate among women living in rural areas was slightly higher at 2.2 children per woman in comparison to those residing in urban areas with 1.7 children per woman. This is after the latest National Health Demographic Survey was conducted, also revealing that the Philippines is now entering a “demographic transition,” wherein a country has a low level of fertility and mortality that would stabilize the population levels.
“Generally, fertility has been declining in all age groups since 2008. Specifically, fertility rates for women aged 20 to 24 years steadily declined from 163 births per 1,000 women in 2008 to 84 births per 1,000 women in 2022. This was also observed in women aged 25 to 44 years,” PSA said in its recent statement.
The population’s fertility rate refers to the average number of children a woman would have throughout her entire lifetime, assuming she experienced the exact current age-specific fertility rates if she were to live from birth until the end of her childbearing years.
In the case of the Philippines, the fertility rate among women has been on a downward trend since the 1970s, and Lolito Tacardon, the Commission on Population and Development’s (POPCOM) executive director, commented that “the decline from 2017 to 2022 was the sharpest ever recorded.”
After this year’s unprecedented drop, the Philippines remarkably now ranks third in Southeast Asia for the lowest fertility rate behind Singapore (1.1 children per woman) and Thailand (1.5 children per woman). POPCOM’s report also covered the fact that all three of these countries are comparable to upper-middle-income countries, where the average number of children per woman is 1.8, and far below the Asian average of 2.2.
What Causes Low Fertility Rate?
Both birth and abortion rates are likely to be influenced by each country’s social norms, religious beliefs, economic prosperity, and even urbanization. Developed nations typically have lower fertility rates because of the lifestyle choices kindred with economic prosperity. What is more, family planning is socially acceptable, and birth control is widely available in countries where mortality rates are low. After all, a typical, middle-class RFO house and lot can get easily crowded, why add more people, right?
As a Catholic country that upholds more traditional values and cultures, the Philippines has historically had higher birth rates than many of its neighboring countries in Southeast Asia. In the 1970s, the birth rate was around six children per woman. Because of this, the unprecedented decrease in the fertility rate in 2022 made it all the more surprising for statisticians and analysts alike.
The decrease in fertility rate can be attributed to various factors, which include the upsurge of women’s empowerment and the accessibility of Filipinos to family planning programs and birth control. Women of today are becoming increasingly aware of their rights and privileges, demonstrated by higher use of contraceptives, improved healthcare, and increased participation in the workforce. Increased education has been shown to be effective and has a resounding impact on decreasing fertility rates.
Additionally, the PSA survey reported that half of the currently married women said that they no longer wanted more children, with 17% wanting to put off having children for two or more years. Filipinos are choosing not to raise children because they can barely meet their own needs and expenses, particularly more so for the middle class. Especially when they are faced with the reality that they are unable to provide a better life for their children with increasing income inequality, impending climate change, expensive vacant land and real estate like some RFO house and lot, lacking healthcare, and the list goes on.
With the recent global pandemic, it is also likely that COVID-19 has played a critical role in decreasing the fertility rate in the Philippines. POPCOM predicted that the birth rate would rise amidst the pandemic, considering that women’s access to family planning measures was limited and scarce, it proved to be the opposite of the case.
Additionally, unplanned pregnancies were discovered to be among the top concerns of the majority of Filipino women in a survey reported in November 2020 by Social Weather Stations. This was conducted when the global pandemic reached its peak and quarantine protocols were at their most stringent. This is due to the proliferation of fear and anxieties that came with COVID-19.
Advantages of Low Fertility Rate
The low fertility rate may ring some alarm bells, but this might not be so bad for the Philippines and its long-winded battle against overpopulation that currently stands around 111 million; the second highest in Southeast Asia after Indonesia.
With the intensified population growth being a major concern in the country, Tacardon said that the recent decrease in fertility rate has put the Philippines below the “replacement fertility level” of 2.1 children, at which women give birth enough to sustain the population level. Additionally, he reassured me that there were “more pros than cons” to this recent shift.
According to Tacardon, this could be considered a massive breakthrough for the country’s population, economic development, and family planning. This “demographic transition” that we are experiencing grants an opportunity for the Philippines to hasten its socioeconomic improvement, providing leeway for more quality projects.
“Focus should now be on ensuring that the quality and capacity of the country’s human resources are enhanced,” Tacardon added. “At the household level, lower fertility also means greater opportunity for personal development of couples and individuals, which can redound to more savings and investments.”
More importantly, a moderately low birth rate can raise living standards overall, particularly for wealthy nations. With this logic, families wouldn’t have to sacrifice their current standard of living to start a family and raise their children because they could keep more of their income, despite living in an aging population. Spouses can buy relatively bigger RFO house and lot properties because they can afford them, such as single-family homes.
The low fertility rate also reflects more positive reasons to ponder on—higher incomes, improved higher education, and improved access to healthcare and reproductive services. Moreover, many women are now able to engage in a much wider variety of economic and social activities thanks to declining birth rates. Additionally, it shows that young children are attending school rather than going to work.
If countries have to increase their taxes to pay for an increasingly older population, it is far less of an expense on the nation’s wealth than if people had to fund larger families. This suggests that having a low fertility rate has a much smaller impact on the country’s wealth.
This signals more success and durable benefits for the Philippines. It has positive environmental and climate change implications. In an increasingly urbanized world, couples are having fewer children to pursue their education, employment, and careers—and live longer than ever before. For that reason, it is time to acknowledge that we all benefit from slower population growth.
Risks of Low Fertility Rate
Over the past five decades, concerns about rising birth rates and their social, economic, and demographic repercussions have been the constant subject of discussion. While for many countries these worries persist, for many others like the Philippines, the problem now is the fertility rate that has plummeted an unprecedented amount.
As a country’s fertility rate decreases, the older demographic makes up most of the population. According to numerous studies, this would further encourage economic development. However, researchers have discovered that lower birth rates raise income inequality within some countries; the birth rate of the upper classes begins to decline first, and they are the first to benefit from the changing demographics.
Some analysts also fear that as the population ages and the pool of young workers shrinks, economic growth will slow to a level that will be challenging to recover from. Initially, as the birth rate falls, the economy expands, however, when we reach the tipping point and fertility rates keep declining, the disparity between the elderly and people of working age becomes unsustainable.
The low fertility rate that the Philippines is witnessing reduces the population size only among the young, rather than across all age groups. Should the population be demographically sustainable, low fertility will eventually lead to an age structure that will further propel the population decline. The longer a low fertility rate persists, the more challenging it is to reverse population decline and its adverse effects. In order to avoid this scenario, the Philippines must work to increase its fertility rates, all while still supporting population growth.
Economists pay attention to these demographic trends when there are significant shifts that could increase or decrease the economy’s capacity to grow, which could be the case right now. This development doesn’t immediately affect anyone since it’s one of those long-term societal developments that happen to little degrees, but this matters greatly and it must be brought to light. If the fertility rate persists to plummet, it could mean lower living standards for Filipinos in the future.
In order to achieve the necessary birth rates to achieve economic sustainability, along with having the younger population contribute to national and global development, governments must provide adequate publicly funded reproductive health and social care for their people. This is due to the fact that women now make greater contributions than ever to the workforce and the social welfare agenda. As a result, they should be eligible for financial assistance with reproductive benefits.
What Does Low Fertility Rate Mean for the Real Estate Industry?
It’s difficult to predict whether the downward trend will continue. However, the long-term effects of decreased birth rates may be far more severe than is expected. For instance, a population decline brought on by lowering birth rates could gradually lower housing demand. In the best-case scenario, this might result in more affordable RFO house and lot, or housing in general. Currently, prices are high because demand is high and supply is low.
With the reduced demand, you will have an easier time buying a house, but a declining population doesn’t always mean you will find it easy in residential real estate or commercial real estate. It implies that when the price of housing rises, the price of having children also rises.
The drastic shift in population, all due to the dwindling fertility rate, would impact housing prices more than we know. Simply put, house prices are a significant factor in a couple’s decision to have a baby. This will reshape the types of homes people would want to buy and invest in.
Whatever the fact is, there is a close connection between the population and the real estate industry. And when one of those things changes, the other is unavoidably affected. They will have an impact on the kinds of homes that people desire, the neighborhoods that garner the most attention, and the cities that prosper and thrive. Through an optimistic outcome, all of this might result in a future where it’s simpler for homebuyers to get on the housing ladder. On the other hand, there is also a lesser probability that a declining population will cause the collapse of the housing market as we know it.
Families themselves also require assistance. Since it is so difficult and expensive to have children, fertility rates continue to decline. Parents struggle with the expenses, or they are experiencing difficulty in obtaining childcare, paid leave, and even basic necessities. These are complex concerns, but ensuring that families can afford to have children is essential for the Philippines’ long-term development, as well as the improvement of the real estate industry.
People can afford less room when housing costs rise, hence the increasing cost of housing required to house children causes people to delay starting a family, having fewer children, or not having any children at all. However, as long as the Philippines can maintain a stagnation of birth rate in the next coming decades, the economic booms in the future will become much more competitive for the economy.
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