Demographics will play a critical role in the Philippines’ medium and long-term economic future. Growing at 16% per annum, the current population is 108 million, making it the 13th most populous country in the world. By 2045, this number is set to hit 142 million. Consumer, property, banking and construction sectors are well placed while opportunities exist in transport, utilities and logistics, provided that they can execute on time.
Breaking the numbers down
According to the United Nations Population Fund, since 2010, the Philippines’ population has been growing faster than India (1.2%), the USA (0.7%) and China (0.5%). In the past 25 years, the Philippines has added 40 million people. In terms of population composition in 2019, 64% of Filipinos are in the 15 to 64 age range while 31% are aged 0 to 14. Only 5% are aged 65 and above. Total life expectancy is 70 years, an improvement from 66 years in 1994 and 61 years in 1969. The population density in the Philippines is 363 people per square kilometre, which is the third-highest among the 15 most populous countries in the world. By 2045, this number will reach 476.
Big positive for the Philippine economy
The growing population base, coupled with rising per-capita income (now at US$3,075), should be taken as a big positive for the Philippine economy. It essentially ensures a lot of consumption ahead. Property and construction firms are key beneficiaries of rising demand for residential dwellings and commercial space that has to be built. Quasi consumer plays like gaming and home improvements should also benefit. Banks will see increased demand for services including loans and deposits. Overseas Filipino workers (OFWs) and business-process outsourcing (BPO) will provide ample supply of labour in coming decades.
Opportunities and risks
Rising population puts pressure on infrastructure development, particularly in the areas of transport, utilities (power and water) and logistics. Opportunities exist for companies that can effectively expand (ahead of the curve) and service the incremental demand. Risks exist if incremental capacity is not put in place on time. This will manifest in traffic jams as well as power and water shortages.
Some of the more notable ongoing and upcoming projects include: the connector road project of San Miguel Corporation; the connector road project of Metro Pacific; Cavite Laguna Expressway of Metro Pacific; Manila-Clark train system; Metro Manila Subway; Kaliwa Water Dam; Wawa Water Dam; and 2,000MW of power generation capacity proposed by Meralco.
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