To strengthen human capital
MANILA, Philippines — Empowering local government units (LGUs) is crucial to the development of human capital in the Philippines and attaining the goal of becoming a middle-class society by 2040, according to the World Bank.
This was among the messages of the World Bank’s Philippines Economic Update December 2024 edition.
“The process of building human capital is sequential and cumulative, underscoring the need to start early,” Zafer Mustafaoglu, World Bank country director for the Philippines, Malaysia and Brunei Darussalam said.
Human capital encompasses the health, knowledge, skills and experience acquired by a person.
As one of the main drivers of economic growth, human capital translates into improvements in living standards.
“Although human capital can be acquired over a lifetime, it is built most effectively when people are young. This is where local governments can play a very critical role,” Mustafaoglu said.
Under the 1991 Local Governance Code, LGUs have a mandate to deliver health care and nutrition services. They are also entrusted with delivering early childhood education services for children aged three and four years old.
“Good nutrition in the early years as well as positive early experiences affect the quality of the brain’s architecture, laying the foundation for future learning, health and development,” Tara Béteille, World Bank’s lead economist and human development program leader for the Philippines, Malaysia and Brunei said.
“Investing in the first six years of a child’s life – particularly the first 1,000 days between conception and a child’s second birthday – has the highest return on investment for the country,” she said.
The Philippines is underperforming in terms of early years outcomes, with about one in four children under the age of five considered stunted or small for their age in 2021.
Enrollment in early childhood education also remains low and stagnant, with only 47 percent of three- and four-year- olds in preschools and 66 percent of five-year-olds in kindergarten in 2020 to 2021.
The lack of early years workers has been cited as a challenge in fulfilling the LGUs’ mandate to build human capital.
Béteille said the role of early years workers such as community health workers, preschool teachers and other local community-based professionals, is essential to improve health, nutrition and education outcomes.
To boost human capital, the World Bank recommends addressing worker shortages, as well as encouraging early years workers through training, improved compensation and incentives.
In addition, the World Bank recommends using performance-based grants to encourage LGUs to prioritize early years services and mechanisms like Program Convergence Budgeting to pool resources and create larger funding streams for early childhood initiatives.
Other recommendations cited in the report include harmonizing the roles of national and local governments, improving monitoring and evaluation, as well as promoting community-level coordination.