Investing more in human capital

As Filipino children continue to rate poorly in reading, writing, math, and creative thinking compared to their peers around the world, a new report by the World Bank (WB) has underscored the urgency of investing in the health, education, and skills training of the country’s young population for it to achieve economic progress and development.

According to the WB’s “The Philippines Human Capital Review” released on Monday, the Philippines has a window of only 20 to 25 years to invest in the human capital development of its relatively young population to reap the benefits of having more working-age citizens than dependents.

The WB projected that with its young population—64 percent of over 110 million Filipinos belong to the working-age group of 15 to 64 years old—the country is among the very few countries in East Asia that could potentially become rich before its population gets old.

“If you don’t invest in human capital now, those kids [who] are getting out of school and entering the labor market will not be able to drive innovation, to drive economic growth, and then you’ll see a hump,” Ndiamé Diop, WB country director, said at a press conference.

First 10 years of life

As it is, according to the WB, the latest Philippines’ human capital index (HCI) stood at 0.52, indicating that children born in 2020 can only achieve about half of their productive potential by the time they reach 18, well below their peers in Malaysia, Indonesia, Thailand, and Vietnam.

HCI measures the health, education, and training of individuals, which are crucial to economic growth. “In our aging region, the Philippines’ human capital provides an important lifeline of services that are needed for growth. Yet the Philippines is only utilizing half of its human capital investment,” said Toni Joe Lebbos, WB economist for human development in East Asia and the Pacific.

The WB said high fertility, limited and unequal access to education and health care, poor learning outcomes, low-quality jobs and skills, persistent poverty and inequality, as well as vulnerability to climate change and pandemics, are the factors limiting our human capital.

It is paramount that the government invests in the development of children in their first 10 years of life through “maternal and child health, nutrition, early education and stimulation, development of foundational skills, and social protection,” said the WB.

Existential problem

The WB report—sadly validated by our bottom ranking in the Programme for International Student Assessment—presents our most urgent and existential problem as this involves the youth who are the future of our nation.

The government must act on this wake-up call and earnestly pursue a sustained and effective program to address poverty. It is simply unjust that many of our children are disadvantaged from birth, with generational poverty resulting in a high incidence of stunting among them.

According to the United Nations Children’s Fund (Unicef), a third of Filipino children are stunted or too short for their age because of poor nutrition. The Philippines ranks fifth among countries in East Asia and Pacific with the highest stunting prevalence, and one of 10 countries with the highest number of stunted children in the world.

Stunted children don’t do well in school and earn low wages as adults, it said. More alarming, Unicef said that stunting after two years of age can be “permanent, irreversible, and even fatal.”

Childhood stunting

The government has many antipoverty programs, including the Pantawid Pamilyang Pilipino Program or 4Ps which provides cash aid to some 4.4 million families, and the food stamp program which was declared a flagship project of the Marcos administration.

In March last year, the President launched the Philippine Multisectoral Nutrition Project to address the high prevalence of malnutrition and stunting of children under 5 in the country. Funded through a P10-billion loan from the WB, the program aims to help 2.4 million children under 5 as well as 3.3 million pregnant or lactating women.

In addition to the cash aid for 4Ps beneficiaries, the President ordered an additional P400 cash grant for pregnant or lactating women to cover their prenatal and post-natal needs up to the child’s second year.

But these measures are clearly not enough, and not focused and sustained enough to make significant positive outcomes. In 2020, Unicef noted that little progress has been made to reduce stunting in the country in the past 15 years despite economic growth and increased health budgets.

The government must do more to focus resources—both public and through private sector and foreign donor funding and initiatives—to significantly reduce childhood stunting and provide quality education to children to give them better odds in life. More than gleaming skyscrapers and well-fortified bridges, having healthy and productive citizens is a far more meaningful legacy for present and future administrations.