The World Bank warned the Philippines that it has only one generation left, or about 20 to 25 years, before the window to harness the benefits of its relatively young population closes, as it is expected to see another demographic shift after that.
That is why the Washington-based multilateral lender urged the country to ramp up investments in developing Filipinos’ human capital – or the health, knowledge, skills, and experiences that individuals accumulate throughout their lives.
Human capital is measured as the expected future earnings of the country’s entire labor force. The WB explained in its report titled “The Philippines Human Capital Review” that more investments are needed in boosting the human capital of Filipino children in their first 10 years – when social, emotional, and cognitive skills are shaped and their potential to learn, earn, innovate, and compete are realized.
“It’s really important to invest now so that you [will] have this younger generation going into the labor market with better capacity and better skills to be able to join the workforce in an effective manner,” WB economist Toni Joe Lebbos said.
“It is important to stress again, that this opportunity won’t last forever. And not taking action now could mean missing out on a lot of potential,” he added.
Latest WB data showed that while human capital makes up 70 percent of the Philippines’ total wealth, Filipino children born in 2020 can achieve only half of their productive potential by the age of 18, well below their regional peers in Malaysia, Thailand, Indonesia, and Vietnam.
Although the Philippines remains on track to hitting upper-middle income status in the next couple of years, the WB said the country’s human capital indicators would fall short of a typical economy that belongs in that category.
Ndiamé Diop, WB country director, warned that wasting the limited opportunity to invest in human capital development of a young population could have economic repercussions. Secretary Arsenio Balisacan of the National Economic and Development Authority said that underinvestment in human capital could hurt the country’s competitiveness and make it difficult for young Filipinos to break free from inherited poverty.
Investing in human capital development means focusing on better education, nutrition, and health services, among many others, especially for the youth who will inevitably take over the country’s labor force, and eventually, leadership. As long as we remain laggards in those areas, we will never be able to maximize the potential that our population has to offer, and to make matters worse, that window of opportunity is not going to remain open forever.
Are we going to take advantage of this opportunity, or will we let it slip away, just like many other opportunities that this country with great potential has allowed to slip away in the past?*
