To produce a better workforce in the future, the World Bank (wb) said the Philippines needs to increase its investment in the early years of children’s development and education to strengthen the country's economic potential.

In a recent presentation in Manila, the World Bank noted that the Philippines is likely to reach upper-middle-income-country status by 2026, but its journey is being endangered by underinvestment in the key human capital indicators of a typical UMIC such as education and health.

“Human capital is 70 percent of the Philippines’ wealth, but tomorrow’s workers will be only 52 percent as productive as they could be if they received full health and complete education,” the World Bank said.

Findings that in early childhood, an alarming 27 percent of Filipino children 0-5 years old are stunted.

Further, disparities in enrollment have been found across socioeconomic groups, with as high as 90 percent of primary learners six to 10 years old found to be not learning.

The said high learning poverty rate has been described as “a serious concern that can hinder human capital accumulation if not immediately addressed.”

“For the Philippines to successfully navigate the transition to an upper middle-income status, it will need to ensure that its population is equipped with the education, skills, and health necessary to meet the demands of a more complex and competitive economic landscape,” the World Bank said.

In its recent The Philippines Human Capital Review issued in June 2024, the financial institution called for “the immediate and holistic investment in the early years to foster essential human capital and reap the demographic dividend.”

The demographic dividend refers to the economic growth potential that arises when the labor force is growing more rapidly than the population dependent on it. To realize that potential, countries must implement policies that invest in human capital and enable employment of the growing workforce, the report said.