Atin Ito First Filipino Community Newspaper in Ontario
The Philippines is facing a challenge in enabling its children to reach their full potential productivity by the age of 18, which places the country’s human capital development behind that of its regional counterparts.
According to the World Bank’s “The Philippines Human Capital Review,” the country’s low Human Capital Index (HCI) of 0.52 is identified as a barrier to achieving upper middle-income status.
The HCI score indicates that children born in the Philippines in 2020 can only attain 52 percent of their potential productivity by the time they reach 18 years old.
The figure falls below the HCI scores of countries like Vietnam (0.69), Malaysia and Thailand (0.61), and Indonesia (0.54), as well as the regional average of 0.56 for upper middle-income nations.
Currently classified as a lower middle-income country with a gross national income (GNI) per capita of $3,950, the Philippines wants to elevate its status to an upper-middle income country (UMIC) by 2025, where GNI per capita ranges from $4,466 to $13,845.
“Although the Philippines is expected to become UMIC by 2026, its human capital indicators fall short of a typical UMIC. Catching up with these peers will hence require more and better investments in human capital across the life cycle,” the Washington-based lender said.
In determining the the country’s HCI, three main aspects are considered, such as survival, learning-adjusted years of schooling, and health.
In comparison to its regional counterparts, the Philippines ranked lower in five out of six subcomponents: the probability of survival to age five at 0.97, harmonized test scores at 362, learning-adjusted years of school at 7.49, fraction of children under five not stunted at 0.7, and adult survival rate of 0.82.
However, the country outperformed its peers in terms of expected years of schooling at 12.95, surpassing the average score for upper middle-income countries (UMIC) at 11.8, as well as exceeding Vietnam’s 12.86, Thailand’s 12.72, Malaysia’s 12.47, and Indonesia’s 12.39.
Ndiamé Diop, World Bank country director for the Philippines, said the country needs to catch up in various areas, emphasizing the need to invest in human capital and narrow the gap with its regional peers.
Diop added that the Philippines’ long-term economic growth and prospects for achieving high-income economy status depend significantly on current investments in human capital.
The World Bank report also noted while the Philippines allocates a larger portion of its gross domestic product (GDP) towards human capital, the spending may be less efficient and effective.
Between 2018 and 2021, the Philippines allocated an average of four percent of its GDP to education, a figure comparable to Malaysia and one percentage point higher than Indonesia, Thailand, and Vietnam.
In terms of per capita expenditure, the Philippines was found to have significantly lower spending compared to its regional counterparts, with the exception of Indonesia.
Furthermore, the country’s HCI lags behind by 2.4 to 17.4 percentage points compared to each of its regional peers.
“Such a difference in HCI compared to public spending on human capital can point to structural bottlenecks that hinder spending efficiency and effectiveness in improving human capital outcomes,” the World Bank said.
Diop suggested that the Philippines should increase its investment in human capital, considering its demographic profile.
This strategic move would not only benefit the country’s current situation but also align with its objective of progressing towards upper middle-income country status in the future. — Chino S. Leyco
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Credit belongs to: www.mb.com.ph
