Harnessing the power of human capital: Building a prosperous PH future

Editor’s note: This was lifted from the acceptance speech delivered by the author as the 2024 Arangkada Lifetime Achievement Awardee of the Joint Foreign Chambers of the Philippines (JFCs) at the Arangkada Forum on Oct. 24.

With profound gratitude and humility, I stand before you today, honored as the 12th Arangkada Philippines Lifetime Achievement Award recipient. I sincerely thank the JFCs of the Philippines for this recognition. It is an honor that reflects not just my personal efforts, but the collective work of many who share the vision of a prosperous, resilient and inclusive Philippines.

While this lifetime achievement award suggests that it covers my whole lifetime already, I assure you that it will not bring to a close my public service journey, which now runs almost five decades. Indeed, you can still count on my ongoing commitment to making a difference in serving our country, now more as a private citizen.

Throughout my journey, from my early years as a finance professor at the Asian Institute of Management, then 19 years at the Asian Development Bank fostering private sector development and public-private partnerships, to leading the University of the Philippines as its president and most recently serving as secretary of the Department of Trade and Industry (DTI), one remains constant in my mind and my heart: the belief that the true engine of our nation’s economic growth is its people. The Filipino workforce is our greatest asset—young, dynamic, resilient and brimming with potential, recognized by global companies already operating here in our country.

But to fully unlock our people’s potential, we must confront and bridge the gaps in our system. Investing in Filipino workers is not just an option but a national imperative. I am encouraged as our government under the current administration shares this vision, and during my time at the DTI, I also made upskilling, reskilling and upscaling of our workforce a priority agenda. I commend the JFCs for championing the same cause, as reflected in the theme of its forum, Level Up: Upskill, Upscale and Uplift.

At the core of this effort is education. For a country to progress, education must be a priority, as the once developing countries like ours have proven. I welcome the enactment of the Academic Recovery and Accessible Learning (Aral) Act. This initiative addresses the learning gaps that emerged, especially during the pandemic, ensuring students receive the necessary support in literacy and numeracy.

The Aral Act is a very good first step. Still, the findings of the Second Congressional Commission on Education underscore the significant challenges in our education system—overburdened teachers, overcrowded classrooms and a lack of resources. Tackling these issues requires a coordinated approach from government, educational institutions and the private sector. The goal is simple: no student should be left behind. Providing our youth with essential skills is a critical task for our future.

For instance, we need to enhance teacher training, update curricula to meet current needs and ensure that schools have the resources to prepare students for the future. A key challenge is raising selectivity and standards for teachers, aiming to attract top graduates, particularly at the elementary and secondary levels.

Countries like Singapore, South Korea and Japan have demonstrated that attracting top graduates into the teaching profession leads to stronger educational outcomes. These countries have made teaching prestigious and competitive as a profession, which encourages the best and brightest students to pursue careers in education.

Long-term nature of human capital development

Human capital development —spanning education, training, health and skill-building—demands long-term investment before its full benefits emerge. While the Philippines has made efforts in this arena, we fall short compared to the ambitious programs of our Association of Southeast Asian neighbors. One critical gap is our limited commitment to sending top college graduates abroad for advanced studies at master’s and doctoral levels, while other countries, like Indonesia and Vietnam, have been doing so in massive numbers for years back to accelerate their progress.

From primary education to higher education and professional training, it takes years, if not decades, to fully train a highly skilled workforce. For example, sending students abroad for master’s and doctoral studies can take five to 10 years before they return and contribute significantly to national development.

Upskilling a workforce through vocational or technical training programs or reforming education systems can take time to implement and produce results. Countries like South Korea and Singapore have seen the benefits of such policies only after decades of continuous investment.

Investments in public health, nutrition and social services improve workforce productivity. Still, these effects manifest gradually as the population becomes healthier because they are better nourished and more capable over time.

Prosperous neighboring countries with strong human capital (HC) adopted long-term, visionary strategies that transcend political cycles:

• Decades of investment in education and skills programs, like SkillsFuture, have made Singapore a global economic leader.

• In Vietnam, HC strategies, including government scholarships for STEM studies abroad, have modernized the economy and fostered a high-tech workforce.

• The Indonesia Endowment Fund for Education, with a massive $8-billion fund, supports master’s and doctoral scholarships for young Indonesians domestically and abroad.

Recommendations

We can balance short-term demands for results with long-term HC investments by institutionalizing programs through legislation to secure initiatives, like education reforms beyond political cycles and changes, collaborating with businesses and educational institutions to share investment in workforce development, and setting measurable milestones to track progress and demonstrate success within shorter political tenures.

The Philippines, like many other countries, needs to adopt a long-term strategy for human capital development, recognizing that:

• Continuous investment in the education sector is critical. The government must address not only access to education but also the quality of education and the upskilling of workers, even if these won’t yield immediate visible outcomes.
• There must be a political and public consensus that certain long-term projects (education reform, scholarship programs, health initiatives) are vital to the nation’s future. Regardless of electoral cycles, the commitment must be sustained.
• Strong leadership from both the public and private sectors will ensure that long-term investments in HC become a national priority, even if the results will only be evident in future generations.
• Sustained public-private partnerships in education and training will enable the Philippines to strengthen technical and vocational education, foster closer collaboration between academe and industry, and create pathways for lifelong learning.

Investing in HC is a long-term imperative for building a prosperous, inclusive and competitive economy. Prosperous nations prioritizing HC development have shown that the returns are substantial, though they take time to manifest. Countries that balance short-term gains with long-term HC development strategies are better positioned to thrive in the evolving global economy.

Call to action: A brighter future for PH

As I accept this award, I do so with a renewed commitment to continue the work of building a brighter future for our nation. The theme of this forum is a call to action for all of us. The task is not for one sector alone—it requires the cooperation of government, industry, academia and civil society. We need a unified nation to do this.

Together, we must invest in the potential of the Filipino workforce to enable us to build industries that are globally competitive, innovative and sustainable.

And most importantly, each one of us must ensure that every Filipino benefits from the progress we achieve.

Thank you for this great honor, and let us continue to move toward a bright future for the Philippines—toward shared prosperity and lasting progress.

The author is former president of the Management Association of the Philippines and former trade secretary. Feedback at [email protected] and [email protected].