Philippine human capital: a long view of development, challenges

An important study on human capital development in the Philippines has recently been completed at the Brookings Institution, Washington DC. The study is significant because it also relies on lessons from experiences among other developing countries.

The author of the study, Dr. Elizabeth M. King, is a professional economist from the Philippines whose long career, until her retirement, was mostly spent at the World Bank. Her successful career in that institution honed her expertise on household investments in human capital and the link between these investments and poverty and economic development.

Dr. King presently is a non-resident fellow at the Brooking Institutions and is adjunct professor at Georgetown University. She received her Ph.D. in Economics from Yale University. (I am proud to add that on her graduation from the University of the Philippines School of Economics for her bachelor’s degree in 1974, she became the second recipient of the yearly G.P. Sicat award for Best Undergraduate Paper. Indeed, she has gone a long way!)

The main conclusion of the study is this. “Half a century ago, the Philippines led its neighbors in several dimensions of human capital, accounting for the ability of its educated labor force to find gainful employment abroad and in new business opportunities at home. Yet progress has slowed, and the Philippines now trails its neighbor countries which have overtaken it in both human capital and economic development.”

Prologue to social policies that improve human capital. In a future column, I will summarize some of the findings of this important study. Our policy makers deserve to digest and accept its major messages.

For the present, I would like to lay some over-arching issues of development, in part to explain some interdependencies of social, political and economic development policies. Into this mix, human capital policies are significantly interlinked.

Success in human capital development does not happen within the vacuum only of social development policies. Mutual reinforcement of economic and social policies helps it to come together. They do not compete, when the political processes of nation-building permit. Economic development policies must help to produce sufficient capacity to finance investment in human capital. When the body politic suffers from strong divisive influences, this is more difficult to move smoothly forward.

Some of the oxygen of support for social policies often derives from simultaneous achievements in the development field, where increasing economic markets demand accompanying social policies in the improvement of education, public health, and social well-being of workers. Successful enterprises demand, and often in fact, lead to make the required changes to happen.

To elaborate, it is easy to hark back to the pre-independence period of our economic history – that of American colonial administration of our development. This was a period of relatively continuous success in economic growth, the buildup of human capital, and supportive political framework, despite the inner dynamics of the struggle for political independence waged within the governance framework.

Throughout the period of colonial experience under American tutelage, Filipino human capital was built slowly along national, regional and provincial dimensions. Depth of experience followed the improving capacity of the institutions that were put in place to carry out the investment in human capital.

In those days, the big driving force of Philippine economic development was its access to the US market. It was an advantage that no other neighboring Asian country had. Access to that large US market enabled the rapid expansion of agriculture, commerce and industry at home.

At the domestic front in the Philippines, the colonial government undertook continuously to build improvements in public infrastructure – roads, communications and inter-island transportation.

Our country of many islands began to be more connected internally even though slowly through the years, these were well-distributed regionally across the country. Some of these, obviously, were made for internal/ colonial security reasons, but they were also perceived to connect the islands for development purposes.

Public education became universal and free at the primary level, then expanded at the intermediate level, along with the building of model high schools. Teacher training improved, first by the importation of a large group of early teachers in the English language and social and science studies by the colonial authorities, followed by the gradual forming of a domestic teaching force with the founding of teacher training schools (the normal colleges), the building of a university (the University of the Philippines), and the promotion of private educational institutions in higher learning.

In this manner, privately owned schools and colleges grew, funded and sustained by highly vetted educational and religious schools, as well as private investors in educational enterprises.

By the time of the Commonwealth period began in 1936, there were many private colleges and universities that were providing higher education, competing with the state-funded University of the Philippines and normal colleges and vocational schools.

Public health policies were also put in place. One of the first major policies of the American colonial administration was to improve public health facilities. The standards for containment of communicable diseases were raised. Infant and maternal welfare were upgraded through the expansion of the public health system, with the construction of major regional hospitals.

Investments in clean water were undertaken. Water districts were created to provide urban water supply. Artesian well investments were encouraged in rural areas.

Thus, public health improved. With rapid economic development, employment and incomes rose on the average. Economic progress was reaching a wide network of the population and health standards – death rates of infants and the young and the safety of maternal health improved, so that net population growth rose.

Thus, at the dawn of political independence, the Philippines was at an enviable crossroads of relatively high investments in human capital by the 1950s when the country embarked on serious economic development. This, despite the wartime destruction and other problems brought about during early independence.

Development experts at the time viewed the country as being the most likely to succeed in development efforts, faster than most of the countries in East Asia. Human capital was relatively better endowed than South Korea, Taiwan, and most of the Southeast Asian countries that today compose the ASEAN.

My email is: [email protected]. For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.p h/gpsicat/