Skills

Several authoritative persons, over the last few days, talked about the declining skills of Filipinos. They were talking in different capacities and on different occasions, but the theme is painfully recurrent.

We all know about the declining functional literacy rates. From having one of the most literate populations in the world, the Philippines appears to be falling below the mean for developing countries.

Declining competence in the English language has occupied our attention for some time. That declining competence is obvious even in the quality of writing of some of our television news writers.

We have, at present, great potentials for taking advantage of the boom in business process outsourcing. Unfortunately, we are hampered by a shallow skills base. Only about 3 percent of applicants for call centers, for instance, are considered adequately competent in English.

That becomes even more appalling considering that applicants for these 21st century jobs come from the cream of our college graduates. The proportion for the general population is very much smaller.

Earlier this week, the National Conference of the Employers Confederation of the Philippines (ECOP) submitted a 24-point resolution to the President. Nearly half of those points dealt with ways to develop "the right workers with the right skills in the right place doing the right things at the right time."

That document declares loudly what the country’s employers have been grumbling about for too long: there are less and less qualified workers to fill the sort of jobs that a modernizing economy creates.

This is true both for enterprises with assembly lines and the higher grade jobs in the financial sector. To a large extent, for instance, a large part of the problem we have been experiencing with Unit Investment Trust Funds (UITF) has been the serious lack of highly qualified fund managers and treasury operators among our banks. Account officers have not fully briefed individual investors about the sort of risks this financial instrument entails.

I have learned from several sources in the banking industry that there is now a serious shortage of accountants. Demand for accounting services abroad has drained our supply of accountants – along, of course, with our supply of medical professionals.

The other day, an education official admitted that we are running short of qualified teachers. We have known that for a long time, based on the quality of graduates we produce. But this is the first time, if my recollection serves me, that education officials are publicly discussing it.

To begin with, the existing supply of qualified teachers has been depleted by retirement and migration of teaching professionals to other jobs and other countries. That supply has not been adequately replenished because of the low pay the teaching profession commands.

Teaching is no longer the high status, comfortably paid profession it used to be. It has become the employment of last resort.

That touches at the core of the problem. If we do not have a good teaching cadre in our schools, we cannot reverse the deterioration in skills of the graduates we produce.

We are confronting a skills crisis. It is a quiet sort of crisis.

No one marches in the streets and wave banners proclaiming they want skills. People here march to demand higher pay – regardless of whatever skills they possess.

But it is a crisis that is of long-term consequence.

If we do not reverse the deterioration of our skills base, it will shrink our capacity for competitiveness. It will undermine the capacity of our population to invent, to deliver results, to make things happen, to innovate and to create wealth.

If our capacity for competitiveness shrinks, our economy will sour. Our ability to run enterprises, provide services and attract higher quality jobs will diminish.

We will be doomed to wallow in poverty. The sure signs that we are doing so are endless political strife, rising criminality, deteriorating enterprises and rotting institutions.

Over the past few months, I have been struck by the fact that so many of my friends are considering migration – not as a measure to improve the level of their own comforts but as a defensive measure to save their children from the dire effects of a degenerating society.

My friends who are considering the option of migration want their children to avail of better educational services and, consequently, better job prospects. Not a few are considering migration as a measure to ensure the safety of their families.

I have imported from the world of banking a concept that I think is a powerful tool for analyzing a nation’s institutional development. That is the concept of capital decay.

In banking, capital decay happens when the composition of an investment portfolio, while apparently remaining constant in present value, is increasingly composed of more short-term assets and less long-term assets. That is an unsustainable portfolio.

The same conceptual tool could also be used in analyzing a country’s asset base. For instance, while we have an increasing population, the aggregate skills that population possesses is seriously declining.

It is a concept that can likewise be used to evaluate social capital. This is the quality of the civic culture, the excellence and credibility of institutions, the collective work ethic and the readiness for innovation.

It is conceivable that our skills base could be declining even as our population is increasing. In which case, there will be fewer and fewer people actually ready to do work and more and more people reduced to dependence simply because they have become unemployable.

It is time to put this crisis front and center. It should be the crisis that preoccupies all of us if we are at all concerned about the long-term sustainability of our economic development.