Investing in human capital

August 5, 2013
Demand and Supply by Boo Chanco
(The Philippine Star) August 5, 2013

P-Noy’s infrastructure officials may be fumbling their jobs but the good news is… the officials entrusted with the responsibility of investing in human capital are making headway. Investing in human capital is no less important as investing in infrastructure. Indeed, it is perhaps more important.

For a country where about 60 percent call themselves dirt poor, the failure to do anything to address their inhuman condition is morally reprehensible. It is also a hindrance to economic growth. There is no way we can become a developed country while ignoring the state of our poor. Besides, raising the bottom is what makes a stable country for everybody.

The CCT program may be controversial and misunderstood by many in the middle and upper classes of society, but it is an attempt to break the cycle of poverty. If properly implemented, it is going to give today’s generation of poor children a better chance of moving out of poverty.

The strengthening of our public education system, the revamp of the primary and secondary education so that high school graduates can get jobs after graduation, is the other good news of the past three years of the P-Noy watch. That the DepEd Secretary has been able to cut down corruption in the procurement of books and other essentials is an accomplishment of historic proportions.

The third leg of this effort to invest in human capital is in the delivery of health services. I recently had an interesting conversation with Health Secretary Enrique Ona and he gave me facts and figures to show how much they have accomplished.

Indeed, I consider the provision of health services as vital to economic development. Our people cannot be economically productive if they are unhealthy.

Children whose growth had been stunted by parasitism and common ailments will not grow up to be productive citizens. Indeed, we can only take advantage of the so-called demographic dividend by improving the health and education of our young people.

That is why the CCT program requires parents to bring their children to health centers for regular check ups as part of the conditions for program participation. Unless children are healthy, they will not be able to learn much from an improved public education system.

Perhaps because I write a business column, Sec Ona emphasized what he has done to address the health concerns of our people by improving health financing and health economics. His program called “Kalusugan Pangkalahatan” or Universal Health Care aims to improve the health of every Filipino, particularly those in the poorest segments of our society.

Dr Ona explained that he is most concerned about making sure access to adequate health “is available to what we call the q1 segment, the poorest 20 percent of the population who earns P3,500 to P4,000 per family per month.” In this regard, he was proud to point out the expansion in PhilHealth enrollment.

Government will increase spending in PhilHealth premiums from the current P12.4 billion to P34 billion to cover some 10.2 million families. Enrolled population has gone up from 57 million in 2010 to about 80 million this year. Poor families in poor municipalities are now covered by the national government even without the counterpart funding of the premium by the local government unit.

Access to quality health care facilities is another top concern of Dr Ona. In this regard, he is convinced that the public-private partnerships are indispensable. This is because, he said, of the limited ability of the public sector to provide public goods like health care entirely on its own.

There are those, specially from the left, who are opposed to privatizing government health care facilities as a matter of principle. But the result is inadequate services and that prejudices the interests of the poorest of our people.

On the other hand, Dr Ona believes we should harness the private sector’s unique resources, skills as well as competencies in support of government for public health initiatives and programs.  Dr Ona thinks PPPs “seem both inevitable and essential strategy enunciated very early by the Aquino administration.”

Dr Ona talks of a National Hospital Reform Program, wherein “we have identified 25 to 30 of our DOH retained hospitals for modernization through PPP.” The first to be targeted for PPP is the National Orthopedic Hospital.

I understand the bidding had been held and an announcement will soon be made of the private sector partner. Despite the resistance of the left and some hospital staff, Dr Ona believes the privatization strategy will provide more benefits and better service to poor patients. There will be additional beds, modernized facilities and no one in the staff will lose his job.

Best of all, Dr Ona is confident that the modernization of facilities will enable them to reduce the average hospital stay of patients at NOH from the current 21 days to three days. It will also still be managed by a board of which government maintains control.

We talked of other subjects including the staffing of government hospitals. The principal problem is the low pay of government doctors. The only way he believes he can attract more doctors to work in DOH hospitals is to allow them to work part time with the privilege of also seeing private patients.

I am inspired by a top specialist like Dr Ona foregoing a lucrative private practice to help in nation building by working in government. His example has inspired a number of top specialists to join him in his mission.

I come from a family of doctors and I am familiar with the kind of dedication demanded of them. I am also familiar with the brand of specialists today who rake it in with high consultation fees in key metro areas like Manila, Cebu or Davao.

While we can sing hosannas for the doctors who have not forgotten their calling to serve specially the most needy of our people, I think government ought to reconsider its salary scales for government doctors. The personal investment for a medical education is high. Paying them as little as P20,000 a month is totally out of line.

It is good to know Sec Ona is making strides in health care delivery nationwide. The fact that P-Noy has supported health care delivery by increasing its budget from P24.65 billion in 2010 to P50 billion this year and P81 billion next year is proof this administration is serious about investing on our human capital. And that’s indeed, the good news.

My mistake

I made a horrible mistake in my column last Friday. Instead of saying “nothing kills a bad product faster and great advertising” I wrote “good product”. That doesn’t make sense.

Oh well… that’s what I get for trying hard to be positive. I subconsciously typed “good” when I meant “bad”. So sorry about that.


Benjamin Solis, an aviation expert, made this comment on my Facebook wall regarding my Friday column on the Kalibo airport.

When I was a private sector adviser to Sec. Ping De Jesus, one of what I considered my more important recommendation was to remove the airports from CAAP so they could be attended to properly and transform their role as economic developmental tools as they were intended to be.

The conflict of interest is very obvious for anyone to see. You can’t regulate yourself. The oversight function of CAAP is a huge and tremendous responsibility as their failure to exercise these functions correctly and efficiently affects the very lives of each Filipino and the trade and commerce of the nation as a whole.

In fact we should look deeper into the networking roles and effects of these airports to regional economic progress. Many of them were put up for political reasons but does not serve to do anything in the regions they are located.

The old belief that dispersions produce balanced growth is well intended but misguided. As can be seen today, the geographical realities of the Philippines require integration of resources rather than dispersion as what is more necessary is equitable distribution of growth.

America’s civil aviation practices this thesis by creating “Hub and Spoke networks” to bring the force of the wealth of a region to the center of commerce before dispersing them again. This enables them to benefit by the economies of scale it produces and the resulting multiplier effect of the smaller economies brought together by networking.


Why do people refer to them as ‘cheap politicians’?

Don’t they realize how much it costs us to support them?

Boo Chanco’s e-mail address is Follow him on Twitter @boochanco