D E V E L O P E D B Y : P U P C S S D D E PA R T M E N T O F E C O N O M I C S
CHAPTER 5
EDUCATION & HUMAN
CAPITAL; NUTRITION FOR
HEALTH & DEVELOPMENT
Learning Objectives
• Explain the economic and non-economic reasons for putting forward human capital investments;
• Identify and discuss the linkages between investments on health and education;
• Discuss and critique the importance of education and human capital in facilitating economic
development.
Digital Classrooms & Flailing Health
Systems
Despite our outstanding achievements on health
and education, as well as our groundbreaking
advances in human development, the coronavirus
pandemic offered a sobering glimpse of how
our societies remain unprepared in the face of a
natural disaster. Our healthcare systems are barely
managing the huge number of infected people.
Most hospitals lack beds to accommodate the
sick, protective equipment for health personnel and
ventilators are scarce, and health financing cannot
fully support everyone. In developing countries
with limited health institutions and medical
professionals, the circumstances are dire.
The same can be said for our education needs. As
the pandemic closed of schools and universities, a
major question would be how to continue learning.
Face-to-face sessions have been disallowed
as these are potential hotspots for large-scale
viral infections. Several institutions started
holding classes online using applications such
as Zoom and Google Meet, alongside learning
management systems (e.g. Google Classroom,
Edmodo, Schoology). But our transition to digital
classrooms also emphasized the divide between
the rich and the poor. Not everyone has access
to the internet, so data subscriptions increased.
Out-of-pocket payments to support digital learning
may prove to be more expensive (e.g. audio-video
applications consume larger bandwidths compared
to surfing the internet, which may then translate to
larger data costs) than physically going to class.
Geographical locations may also prove to be a
deterrent for effective learning as some areas are
not fully equipped with broadband signals. Gadgets
such as laptops and smartphones also hinder
students from pursuing digital learning.
Our current experience shows that downplaying
the impact of the virus, politicizing solutions and
disregarding scientifically backed responses,
and reducing much-needed investments on
human capital result to more aggravating and
fatal circumstances. In this harrowing episode
of our human existence, we painfully learn the
consequences of poor investments on health and
education. These aspects of human development
should serve as equalizers, but the pandemic and
our current solutions have shown that it could
instead deepen socio-economic cleavages rather
than bridge them. In this section, we look at the
value of significantly investing on human capital
as these not only improve economic productivity
but also avert negative externalities (e.g.
contagion, disinformed choices) that may result to
underdevelopment.
Education: The Great Equalizer
In a developing country like the Philippines, it
is every parent’s dream to hang their children’s
medals and diplomas in house walls. Like a
talisman, diplomas are accomplishments, the
evidence of our hard work, a ticket to a better
life. But yearly too, we are exposed to the harsh
realities of life: children crossing rivers or trekking
mountains for an hour to get to the nearest school,
some of them dropping out because they do not
have enough money to sustain their studies. Young
people prone to absenteeism, a number of them
stopping for some time to work and help pay
family bills. Many graduates join the roster of our
workforce. They’d have to wait for several months
before getting a decent paying job, while a good
number would also leave the country in search for
greener pastures. Families are slowly inching away
from the grating nails of poverty. But a stroke of
disaster or family tragedy may deplete hard earned
savings and bring them back to where they once
stood. Amid all these realities we ask: where is
equity? How do we best achieve it?
Equity is achieved when societies make the right
51
 I N S T R U C T I O N A L M AT E R I A L F O R E C O N O M I C D E V E LO P M E N T
investments on human capital. These are defined
as “productive investments embodied in human
persons, including skills, abilities, ideals, health
and locations, often resulting from expenditures
on education, on-the-job training programs, and
medical care.” In the field of education, we need
to create conducive spaces for learning—public
education is free, but 50 to 60 students are
cramped in classrooms while some are forced
to study under the shade of trees because the
rooms are not enough. Facilities such as kitchens,
laboratories, and workshops are necessary to
fully enhance student skills; ancillary services
such as clean restrooms, working libraries,
and ventilated walkways are equally important.
Instructional materials, good quality teaching from
competent and well-supported faculty members,
and a responsive curriculum are also significant
investments to be made in education.
Alongside education, investments on health are
INVESTMENTS ON HEALTH
Increases school attendance. Healthy children would
not be prone to absenteeism, would be more engaged
in classroom activities, and would be physically and
mentally fit to come to class regularly.
Encourages effective learning. Healthy children are
more successful in school, absorb concepts more
effectively, thereby improving retention and efficient
learning capabilities.
Extends life spans. With better hygiene and health-
seeking behavior, people enjoy longer life spans and
engage in various forms of life-long learning.
Enhances productivity. Healthy individuals are more
productive members of the society through their
work and education. They can utilize the fruits of their
education and labor at any point in life.
More for Education & Health
We now examine our human capital investments.
Note that these investments are not dependent
on a nation’s level of income. A country may
enjoy high incomes, but these do not necessarily
translate to effective investments on health and
education. The concept of income elasticity comes
into the picture. At the individual level, households
which experience higher incomes may choose
to buy cars or other material investments than
increase savings that may be used for college
education later on. They may also buy sodas,
candies, or less nutritious foods instead of healthy
meals. The ability to purchase these materials
could be symbolic of economic success. At the
society level, governments indeed invest on human
52
also necessary. Without effective investments on
health, our education goals would be difficult to
achieve. Therefore, investments on human capital
such as education and health work together
given the spillover effects or positive externalities
it creates on every individual. It is therefore not
enough to just dole out scholarships and stipends.
It is also important to note that students may be
coming to school hungry or they have malnutrition
to begin with, hence targeted feeding programs.
They think well, participate actively in sports
and other activities, and even work harder when
they are healthy. On the flipside, people take
care of their bodies, practice proper hygiene and
sanitation, and engage in healthy activities because
they learn these foremost inside the classroom.
Underinvesting or poorly investing in one
component, education or health, would undercut
potential gains on human development.
INVESTMENTS ON EDUCATION
Internalizes health skills. Health programs rely on skills
learned inside the classroom. Improved literacy and
numeracy allow individuals to induce better health-
seeking behavior, practice good hygiene and sanitation,
eat nutritious food and exercise.
Trains health professionals. Schools are formative
platforms for our health professionals. Increased
investments on educational institutions encourage
more individuals to choose and practice professions
aligned in the health sector.
Maximizes human productivity. Education motivates
individuals to contribute to social and economic
activities of the society. It also helps in decision-making
and undertaking informed life choices such as careers,
family and child-rearing, and lifestyles.
capital. But there is a need to examine if these are
impactful and sustainable investments. A closer
look at Philippine investments first on education,
and then on health would show that they are not
as well-envisioned and effectively executed as they
intend to be.
Realizing the Promise to Leave No One
Behind
Education and economic development discourse
revolve around two basic ideas: (1) the political
economy of educational supply and demand; and
(2) a comparison of social and private benefits
and costs of education at various levels and its
implications on public investments on education.
D E V E L O P E D B Y : P U P C S S D D E PA R T M E N T O F E C O N O M I C S
Private Returns and Costs versus Social Returns and Costs of Education. (Source: Todaro & Smith, 2015 p.403)
We discuss these briefly then observe Philippine
educational investments.
The amount of schooling (i.e. how long would an
individual study) of an individual depends largely
on economic factors. On the demand side, higher
educational attainments provide better prospects
for increased incomes in the long run. These
are juxtaposed with potential direct and indirect
costs for students and their families. Direct costs
include amount to be spent for studying and
miscellaneous expenses such as transportation,
food, and even lodging for migrating students.
Indirect cost may include the opportunity cost of
attaining higher education versus possible earnings
had they chosen to work. Todaro and Smith
notes that the amount of schooling is a derived
demand for high wage employment opportunities
in the modern sector. On the supply side, we see
political forces at play. The quantity of school at
primary, secondary, and university levels may limit
or broaden access to schooling opportunities.
Government expenditures on education also have
an impact on the number of years students spend
in school. For instance, if education is free until
higher education levels, then students may be
encouraged to stay longer in school and obtain
degrees that may improve employment prospects.
A comparison of social and private benefits and
costs of education at various levels affect the
extent of public investments on education, at least
in theoretical models. This is illustrated in Figure
1. Private benefits of education, as mentioned in
the previous paragraph, increase as an individual
increases their educational attainment (see Figure
1.a). Employment opportunities broaden and
income prospects increase because of higher
education attainment. Private costs on the other
hand, increase slowly or may decline as one
moves up the educational ladder. With better job
opportunities and increased income, an individual
is poised to pay private costs; or it could be that
costs at the university level decline with the state
covering much of the costs.
The social side offers an interesting juxtaposition
(see Figure 1.b). Social benefits or the payoffs
of education to society rises sharply and then
declines later on. At the level of basic education,
payoffs are high as it improves levels of
productivity; it then increases slowly or even
declines as one receives higher levels of education.
Social costs are low at the first years of schooling,
then increases sharply at higher education. For
one, capital outlay such as buildings and halls, as
well as equipment in public universities are more
expensive and as such social costs become larger.
It could also mean opportunity costs in terms of
productivity in terms of hard labor (e.g. agriculture,
manufacturing and services versus academe
and research fields). Of course, this should not
mean that one sector is more economically
productive than the other. They are both important.
Nonetheless, the model shows that as social
benefits decline overtime relative to the increase in
social costs, the rate of returns is negative.
Todaro and Smith explains that the divergence
illustrated in the above figures reflect potential
misallocation of resources between supporting
private interests and securing social interests. The
optimal strategy, based on the model provided,
is to provide students with a certain amount of
schooling (e.g. say 9 to 10 years, or for some 12
to 14 years of basic education). The number of
years in school depends on the socio-economic
conditions and priorities of the government, as
well as cultures and norms of a given society.
Even so, the strategy remains controversial and
debatable as there are difficulties in calculating
earnings gains and the types of social benefits to
be considered.
We may contrast the model with actual
experiences in the Philippines. In 2012, education
represented 2.1% of the country’s gross domestic
product (GDP), a year prior to it was at 2.3%. While
this is close to the average education to GDP
ratio across Southeast Asia, the numbers are still
below the recommended 6% ratio from the United
Nations (UN). Education to GDP ratio hit its peak
53
 I N S T R U C T I O N A L M AT E R I A L F O R E C O N O M I C D E V E LO P M E N T
in the Philippines on 1997 and 1998 with 3.2%.
A closer look at the numbers would show that
education spending has significantly increased
throughout the years, making it one of the largest
items in the national budget for the past two
administrations. At least 24% of all government
expenditures have been allocated to education
in 2018; while higher education budget jumped
by about 45% in 2016 and 2017. Reports have
also shown that at least 86,000 classrooms were
constructed, and some 128,000 new teachers were
hired between 2010 to 2015. These investments
are consistent with the government’s promise to
improve quality of education through DepEd’s “Tayo
Para sa Edukasyon” banner.
As a developing country with limited resources,
education often competes with equally important
human needs such as health, shelter, social
welfare, and disaster and risk reduction. The
current investments have shown improvements
in terms of education outcomes. Student to
teacher ratio was reduced from 38:1 to 29:1, while
student to classroom ratio improved from 64:1 to
47:1, from 2010 to 2013. Elementary completion
rates have also improved to more than 83% in
2015, from below 70% in the previous years. For
secondary levels, enrollment rates increased to
an estimated 68% in 2015, from 60% in 2005. In
2019, a coalition of progressive youth groups,
teachers and education advocates succeeded in
lobbying for the passage of Free Higher Education
Act (Republic Act 10931 or the Universal Access to
Quality Education Act). Young Filipinos now have
greater opportunities to enter universities and earn
college degrees because of this legislation.
Indeed, the government invests on education. For
local governments, education investments rely
heavily on the special education fund (SEF). SEFs
are derived from the proceeds of an additional 1%
tax on the assessed value of real property that a
province or city, or a municipality within the Metro
Manila area, may levy and collect. Specifically,
the fund must be utilized for the operation and
maintenance of public schools; construction and
repair of school buildings, facilities and equipment;
educational research; purchase of books and
periodicals; and sports development in amounts
that will be determined by the respective LSBs
(Section 100 of the Local Government Code). Given
such, we evaluate for impact and sustainability.
A number of local government officials and even
congressional representatives pool resources for
scholarship programs and student stipends. Public
officials also find it profitable to spend on hard
infrastructure: large gymnasiums, auditoriums
or school buildings named after their prominent
54
dead relatives. SEF also offers opportunities to
undertake repairs and maintenance for existing
facilities, as well as invest on sports development.
Are these necessarily bad? No. Scholarships and
stipends alleviate the financial woes of students
and their families. They can buy books, eat good
food, and go to school with the financial support
received. Infrastructure expand the facilities
that may be used by students and teachers.
Maintaining them through special funds would
ensure that more students would be able to use
safe and sturdy academic facilities for a longer
period.
These are good investments; but are these
effective investments? Without effective
investments on books and instructional materials,
the welfare of teachers, and research and
development, they are not as impactful. The SEF
guidelines include these as possible aspects
to fund, but given limited resources, it is more
politically profitable for public officials to choose
tangible and visible educational investments.
Further, the political economy of local governments
across the country offer insights as to inequality
in resources and the SEF. Rich cities with large
swathes of real property can enjoy the benefits
of SEF while smaller cities and municipalities
with little real property are on the losing end. It
also does not help that SEF spending is based
on a positive list and regulating agencies such
as the Commission on Audit (COA) offer varying
interpretations on how to spend the SEF. Such
actions penalize local governments that intend to
be more creative or innovative with their education
spending.
An insightful essay by the late Jesse Robredo
offer smart investments on education. He cited
the importance of participatory decision-making
on education by democratizing membership in the
local school boards (LSB). Experiences in Naga
City show that a more inclusive and participative
LSB membership can yield better solutions to
localized issues on education such as absenteeism
and meeting literacy and National Achievement
Test (NAT) outcomes. When replicated in other
local governments, the practice offered interesting
results on addressing local education needs. For
Bro. Armin Luistro, former Education secretary,
effective partnerships with the local private
sector may help fund some pressing education
needs such as classrooms, additional lands for
school expansion or titling of existing lands, and
equipment for technical-vocational specializations.
Effective coordination with local governments
would also help align education priorities and split
investments to cover greater ground.
D E V E L O P E D B Y : P U P C S S D D E PA R T M E N T O F E C O N O M I C S
A Renewed Perspective on Public Health
The World Health Organization (WHO) defines
health as the “state of complete physical, mental
and social well-being, and not merely the absence
of disease or infirmity.” The agency serves as the
subject expert and lead body on global health
matters. Just like education, average human health
has improved over the years given the effective
cures found on previously fatal diseases such
as smallpox, polio, and measles; expanded life
span for most human beings, and overall better
healthcare systems with the help of advanced
medical technologies. But similarly, looking at the
average health levels mask persistent inequalities.
Indigenous peoples and minority populations
across societies are once again at the forefront
of health injustice and inequalities. High quality
medical facilities are clustered in urban areas and
more affluent communities; and while public clinics
may be present in some remote areas and far-flung
communities, these are often under-equipped and
understaffed. Often, healthcare services provided
by public authorities are unequal relative to those
procured privately.
Specifically, in developing countries, contaminated
and scarce water sources also contribute to
deteriorating human health. Poverty and difficulty
in accessing food sources affect nutrition and may
lead to other debilitating diseases. Malnutrition is
considered a disease; when tied with dehydration,
diarrhea or any infectious disease, and left
untreated, may become fatal. In 2013, 870 million
people are still suffering from hunger. Other deadly
diseases include malaria and acute respiratory
infections, AIDS and tuberculosis. Majority of
fatalities have been children. In response, the
WHO established the Integrated Management of
Childhood Illness (IMCI) Program. It offers training
and improvement of performance of national
health organizations and personnel in disease
prevention. The program also promotes health
practices such as breastfeeding and the use of oral
rehydration therapy to meet several health needs.
The following are the major health challenges
faced by developing countries, according to WHO
(Todaro & Smith, 2015, p. 410-411):
1. Absolute poverty. Debilitating poverty cuts off
access to major human needs, one of which is
health. Poor people often have poor access to
clean water sources, are far from healthy food
sources, and lack financial resources to meet
health needs.
2. Malnutrition. Undernourishment weakens the
immune system, as well as physical and mental
aspects of an individual. 800 million people
suffer from malnutrition and two billion have
one or more micronutrient deficiencies.
3. AIDS. One of the leading causes of death on
working age adults in developing countries. The
stigma borne by people living with HIV-AIDS
(PLHIV) aggravate poor health conditions.
4. Malaria. A deadly strain is making a
comeback, particularly in Africa. One million
people are killed by malaria each year, 70% of
which are children under the age of five.
5. Tuberculosis. This disease claims two million
lives each year, while one-third of the world’s
population is infected with TB bacillus. At least
eight million new cases crop yearly, and new
multi-drug resistant strains are spreading.
6. Acute lower respiratory infections. These
infections, one of which is pneumonia, are
preventable and curable but could still kill. At
least 20% of all deaths in children under age five
are due to these infections.
7. Hepatitis B. The disease may kill as many as
one million annually.
8. Ascariasis. Ascaris are roundworm parasites
that affect 10% of the population in developing
countries. Children ages three to eight are usual
victims because of playing in contaminated soil
or eating uncooked food grown in contaminated
soil.
9. Cholera. Dehydration from severe diarrhea
brought about by cholera may cause death.
10. Dengue. Half million cases require hospital
treatments, and at least thousands die because
of dengue.
11. Leprosy (Hansen disease). There are
400,000 new cases every year, while two million
people are disabled because of this disease.
12. Dracunculiasis. Also known as guinea worm
disease, this illness is a debilitating nematode
infestation often due to lack of access to safe
water.
13. Chagas disease. A parasitic infection that
attacks an estimated 17 million people in Latin
America and may result to 45,000 deaths per
year.
14. Leishmaniasis. A group of parasitic
diseases that infect about 12 million people.
The most severe form is visceral leishmaniasis
55
 I N S T R U C T I O N A L M AT E R I A L F O R E C O N O M I C D E V E LO P M E N T
or kala-azar. It is fatal for 90% of untreated
cases resulting to 10,000 deaths annually.
15. Lymphatic filariasis. This is also known as
elephantiasis, a disfiguring parasitic disease
that affects 100 million people in the developing
world. 40 million people are permanently
incapacitated and disfigured by this disease.
16. Other parasites. This includes trichuris and
hookworm, with around 600 million people
affected.
17. Other diarrheal diseases. Close to two
million people per year die because of extreme
dehydration caused by these diseases.
Similar to education and other human capital
needs, governments invest poorly on healthcare
needs and promote poor health policies.
Individually, people are often uninformed about
health and have poor health-seeking behaviors.
Households, particularly those in the lower income
thresholds spend too little on health, and should
they spend, it would incur high out-of-pocket
payments that may deprive them of access to
equally important human needs such as food and
house rental.
At the society level, markets invest too little
on health infrastructure and research and
development unless there are profitable returns.
Pharmaceutical companies may invest on vaccines
but once a cure has been found, continued studies
even for alternative potential cures are abandoned
or underfunded as observed on MERSCOV
and Zika virus. High income countries do not
necessarily have the best health facilities and
equitable access to healthcare. Notably, among
low-income countries, Colombia have the most
equity in financial contributions. Other developing
economies have the least fair financing for health
systems (e.g. Cambodia, Myanmar, Vietnam,
Russia, and Nepal), and high out-of-pocket
payments (i.e. large fractions of their income are
56
used for health needs, examples include Brazil and
Peru).
The prevalence of aforementioned health
challenges and more recently with the devastating
blow of the coronavirus pandemic, a renewed
perspective on public health investments has been
nurtured. Aside from better and more equitable
health policies, governments and even other
stakeholders also saw the importance of taking
care of the environment. Most of the world’s
health challenges stem from poorly maintained
environments (e.g. unclean water, poor living
conditions, unhealthy food sources) and are
zoonotic (i.e. parasitic, bacterial and viral infections
transmitted from wild animals to humans).
Better investments are complemented by effective
public measures. Often, we observe that current
systems favor the wealthy and well-connected,
while the poor crowd each other in securing
limited public health subsidies. Cost-effective
and preventive health campaigns such as those
that spread awareness, cleanliness campaigns,
and proper waste management are often ignored,
alongside availability of basic medical care. The
Philippines’ labor export policy is also contributive
to poor health outcomes. With low salaries for
medical health professionals, our doctors, nurses
and other health experts migrate and look for
opportunities overseas. We produce the highest
number of nurses every year, but in our battle
against COVID-19, the country has to ask for
volunteers as most of our nurses have already left
our shores.
WHO strongly advises governments to place
strategic investments on health: “The careful
and responsible management of the well-being
of the population—stewardship—is the very
essence of good government... The health of the
people is always a national priority: Government
responsibility for it is continuous and permanent
(p. 424).”
D E V E L O P E D B Y : P U P C S S D D E PA R T M E N T O F E C O N O M I C S
CASE STUDY: CRITICALLY ASSESSING THE 4PS
Philippines Conditional Cash Transfer Program
Impact Evaluation 2012 (Executive Summary)
World Bank (January 22, 2013, revised April 2014)
The Pantawid Pamilyang Pilipino Program provides
cash transfers to poor households, conditional upon
investments in child education and health as well
as use of maternal health services. The objective
of the program is to promote investments in the
education and health of children to help break the
intergenerational transmission of poverty, while
providing immediate financial support to the
household. Poor households are identified by the
National Household Targeting System for Poverty
Reduction (NHTS-PR) based on a transparent
poverty targeting mechanism, using a statistical
model to estimate income. Households with
estimated income below the poverty line are
classified as poor. From that database of poor
households, Pantawid Pamilya identifies and selects
eligible households who have children 0-14 years of
age and/or a pregnant woman. These households
then receive cash grants every two months
ranging from PhP 500 to PhP 1,400 per household
per month, depending on the number of eligible
children.
Since its launch in 2008, Pantawid Pamilya has
been scaled up rapidly and has become the
cornerstone of the Government’s social protection
efforts. This conditional cash transfer (CCT)
program has been an important part of a renewed
effort to address chronic poverty and meet the
Millennium Development Goals (MDGs) to eradicate
extreme poverty and hunger, achieve universal
primary education, promote gender equality,
reduce child mortality, and improve maternal health
(DSWD, 2009). By May 2012, the program covered
approximately 3 million households. It accounted
for half of the Government’s expenditures on
national social protection programs in 2011.
The specific objectives of the program are to: (i)
keep children in school, (ii) keep children healthy,
and (iii) invest in the future of children. It reflects the
Government’s commitment to promoting inclusive
growth by investing in human capital to improve
education and health outcomes for poor children
and pregnant women. The program is based on the
premise that poverty is not about income alone but
is multi-dimensional, and factors such as access
to basic social services and social environments
matter.
A carefully designed, comprehensive, and rigorous
impact evaluation was conducted, as the first
of a three-wave evaluation study to assess
the program’s initial effectiveness in achieving
its objectives. As part of the Government’s
commitment to evaluating its development
programs, an impact evaluation for Pantawid
Pamilya was designed and implemented from the
very initial stages of program planning. The study
was designed to represent the first implementation
phase (known as Set 1 which took place between
June 2008 and April 2009) of the program, since the
program’s scale-up plan was not yet in place at the
time of study design.
This report presents the findings from an analysis
that assessed program impact by comparing
outcomes in areas that received Pantawid Pamilya
with outcomes in areas that did not receive the
program. The impact evaluation applied two
analytical methods: (i) Randomized Control Trial
(RCT), which compared randomly assigned
program areas and non- program areas to assess
program impact, and (ii) Regression Discontinuity
Design, which compared the outcomes of poor
households who received the program with similar
poor households just above the poverty line.
This report presents the findings from the RCT
component only. It should be noted that although
2.5 years of program implementation is generally
considered enough time to observe impacts on
short-term outcomes, it is not long enough to
assess impacts on long-term outcome measures.
The findings of the impact evaluation support
administrative and other assessments that have
found that Pantawid Pamilya is reaching most of
its key objectives. The impacts found through this
study are comparable to the levels of impact found
in other CCT programs around the world at this
stage of program maturity, particularly in terms of
the program’s achievements in improved health
service use and school enrollment.
Findings of the study indicate that, overall, the
program is meeting its objective of helping to keep
poor children in school, by increasing enrollment
among younger children (3-11 years old) and
increasing attendance among 6-17 year olds. The
study found higher rates of school enrollment
among children 3-11 years of age in the beneficiary
households (by 10 percentage points for 3-5 year
57
 I N S T R U C T I O N A L M AT E R I A L F O R E C O N O M I C D E V E LO P M E N T
olds and by 4.5 percentage points for 6-11 year
olds), compared to poor households who did not
receive the program. In particular, the program
has been successful in boosting the enrollment
of primary-aged children (6-11 years old), helping
to bring about near universal enrollment of 98
percent enrolled in school among this age group .
Considering that this study group only includes poor
children, this achievement is highly commendable.
School attendance improved for all age groups
across the beneficiary households, except for the
youngest preschool/daycare age group.
However, the findings suggest that the program
has not had a significant impact on increasing
enrollment among older children aged 12-17 years
old. The program was not explicitly designed
to improve schooling of children above age 14,
given that is the age limit for education grants.
However, the program was unable to even improve
enrollment of children 12- 14 years of age, who are
currently covered under Pantawid Pamilya. Thus,
the program as currently designed is unable to keep
older children in school, although it is also likely that
subsequent waves of the impact evaluation may
find improvements in school enrollment among
children of 15 years old and above as the cohorts
of Pantawid beneficiaries grow older. At the same
time, the finding also implies that program should
consider expanding coverage to older children,
and also reconsider the current five year limit of
program eligibility, if long term human capital
investments are to be sustained.
The program was found to be meeting its
objective of helping to keep poor children healthy.
The program has helped improve the long-term
nutritional status of younger children (6-36
months old), a positive impact not seen in other
CCT impact evaluations at such an early stage of
program implementation. The improvement was
a 10 percentage point reduction in severe stunting
(which may reflect a combination of factors
such as better maternal care and environment
during pregnancy and after delivery as a result of
increased antenatal and postnatal care) compared
to barangays that did not receive the program,
where 24 percent of young children (6-36 months
old) were severely stunted. This improved long-
term nutritional status was achieved through the
program enabling parents to provide better care
for their children in a consistent manner and feed
their children more protein-rich food such as eggs
and fish. Reduction in severe stunting among this
young age group is expected to have strong long-
term benefits, as stunting in the first two years
of life is known to lead to irreversible damage
58
including lower educational attainment, reduced
adult income, and decreased offspring birth weight
(Cesar G Victora, 2008). The program has also
encouraged poor women to use maternal and child
health services such as antenatal care, postnatal
care, regular growth monitoring, and receipt of
Vitamin A and deworming pills. In addition, it has
helped increase healthcare-seeking behaviors
among beneficiaries when their children become ill.
The program is also achieving its objective
of enabling poor households to increase their
investments in meeting the health and education
needs of their children. Pantawid Pamilya is
changing the spending patterns of poor households,
with beneficiary households spending more on
health and education than poor households who
had not received the program. The study also
found that beneficiary households spent less on
adult goods such as alcohol and that the program
may have contributed to increased savings among
beneficiary households.
Although the study found that the cash grants were
reaching beneficiaries, the study did not find an
overall increase in per capita consumption among
the poor benefiting from the program, although
there was some evidence that poor households
are saving more in certain provinces. The lack
of impact on mean consumption is not unusual
for CCT programs at a relatively early stage of
implementation with programs finding impact
on mean consumption as the program matures.
The estimated per capita consumption per day
reported by the sampled households was PhP
46 per day in both program and non-program
barangays, while program beneficiaries in the study
reported receiving PhP 5 per day (equivalent to
US$ 0.11 a day) , representing approximately 11
percent of the households’ per capita consumption.
Internationally, the largest transfer amount was in
Nicaragua with the transfer representing about 30
percent of consumption, Mexico about 20 percent
of consumption, and Brazil about 8 percent of
consumption (Fiszbein, et al., 2009). Therefore,
there is a wide gap between the benefit amounts
beneficiaries are eligible for—an estimated 23
percent of income, which is relatively generous—and
the amounts that beneficiary households actually
receive, which are relatively small compared to
those in most other CCT programs around the
world. This gap could be minimized by working on
three areas: improving beneficiaries’ compliance
rates to program conditionality; regularly updating
program database to reflect schools and health
facilities beneficiaries attend to be effectively link
meeting of conditionality to payments; and ensuring
D E V E L O P E D B Y : P U P C S S D D E PA R T M E N T O F E C O N O M I C S
that all schools and health facilities report on is designed primarily to increase demand among
compliance verification to the program. poor families for education and health services.
To achieve overall improvements in education
The study found that Pantawid Pamilya has had and health outcomes, however, the study findings
positive impacts beyond its originally targeted highlight the need to intensify efforts to improve
objectives. For example, the program has access to and quality of health and education
contributed to increased coverage of the PhilHealth services for CCT beneficiaries. For example,
health insurance program. More poor households in although more children are visiting health centers to
areas that received Pantawid Pamilya reported that meet the program conditionality of regular growth
they were covered by PhilHealth, compared to their monitoring, the study did not find an increase in
counterparts in non- Pantawid areas. childhood immunization coverage—although not
uncommon in impact evaluations around the
The findings of the impact evaluation also indicate world—which suggests that health providers are not
that the program has not affected decisions to work yet able to fully capitalize on the opportunities to
or fertility rates. Despite the additional household provide basic child health services to CCT families.
income provided to poor families under Pantawid
Pamilya, the impact evaluation did not find any The study findings point to a number of policy
evidence that beneficiary households worked implications:
less or made less effort to obtain more work. The
study also found that women in the beneficiary - To improve educational outcomes for older
households are not having any more children than children, additional measures such as expanding
women in non-beneficiary households. the age of coverage of Pantawid Pamilya, increasing
the grant amount for older children, and parallel
Although the sampling was not designed to be supply-side interventions in the education sector are
statistically representative at the provincial level, required;
the findings suggest that program impacts differ by - Currently households can be enrolled in the
province. The study found considerable differences program for a maximum of five years. Expanding
in program impact on household socioeconomic, the duration of coverage will not only help to keep
child health, and education outcomes across the children in school longer, it will also help to increase
four provinces. Across most outcomes, Negros household consumption;
Oriental consistently showed the most positive - Linkages and coordination with health service
and strongest program impacts, while Lanao del providers need to be strengthened to ensure that
Norte consistently showed weaker impacts than beneficiary mothers and children receive the
other provinces. Although there are several potential services they require and to ensure a continuum of
reasons for such differences such as effectiveness care;
in program implementation, supply-side differences, - It is important to consider ways in which other
and other socio-environmental factors, further social programs that may have a long- term impact
research is needed to better understand the reasons on the welfare of the poor could take advantage
behind these differences. of Pantawid Pamilya’s strong and effective social
mobilization structure; and
Although the impact evaluation found evidence - To ensure more efficient program implementation,
of success on a broad range of outcomes, the the reasons for differences in program impact
results also revealed a number of challenges for across geographical areas must be better identified
Pantawid Pamilya going forward. Pantawid Pamilya and understood.
Concluding Notes
As noted, high income does not necessarily equate to more investments on human capital needs such
as education and health. Market-based solutions could be helpful but are prone to failures and may result
to distortions in education and health systems which in turn would reinforce inequalities. Government
prioritization is necessary to make pivotal and strategic human capital investments to ensure the welfare
of the people and improve the country’s productivity. Health and education should not only be seen as
means to development, but worthy end goals in itself—contributive to achieving a developed and free
society. The Philippines has a long way to go when it comes to investing on human capital. Rhetoric and
mere play of words are not enough to appease a population hungry for something they truly deserve.
59
 I N S T R U C T I O N A L M AT E R I A L F O R E C O N O M I C D E V E LO P M E N T

REVIEW QUESTIONS
• Discuss and critically expound on the linkages between investments on health and education.
• Compare private and social returns and costs for investments on education. How would
modelling these returns and costs affect public investments on education?
• Identify five major health challenges faced in the Philippines from the list identified by WHO.
Discuss how these challenges affect Filipinos and how these are addressed by the government.

STUDENT EXERCISE / ASSESSMENT

Exercise: Reflection Essay
Write a reflection essay based on the article discussing 4Ps in the Philippines. The following questions
may guide in writing your essay:
• What is the main argument or issue raised in the essay?
• What are conditional cash transfers?
• How does the 4Ps address concerns on strategically investing on human capital and improving
health and education outcomes for the poorest households in the Philippines?
• In your assessment, are these kinds of interventions effective in addressing gaps on human
capital investments and improving overall health and education outcomes? Why or why not?

REFERENCES USED FOR THIS PART

Beltran, B.B. (June 26, 2019). Education reform and the Philippine economy. BusinessWorld. https://www.
bworldonline.com/education-reform-and-the-philippine-economy/

Department of Education. (October 2010) Discussion Paper on the Enhanced K + 12 Basic Education
Program.

Gutierrez, N. (December 23, 2014). Top beneficiaries of 2015 budget: DepEd, DPWH, DND. Rappler. http://
www.rappler.com/nation/78775-2015-budget-allocation

League of Cities of the Philippines. (2013). Discussion Paper on Finding Alternative Resources for
Education Financing: The Senior High School Investment Plan.

Local Government Code of 1991.

Manasan, R.G., Celestino, A.B. & Cuenca, J. G. (May 2011). Mobilizing LGU Support for Basic Education:
Focus on the Special Education Fund.” Philippine Institute for Development Studies Discussion Paper
Series, no. 2011-07

Quismundo, T. (March 31, 2012). Philippine education still below UN Standard. Philippine Daily Inquirer.
https://globalnation.inquirer.net/31229/philippine-education-spending-still-below-un-standard

Robredo, Jesse M. (undated) Reinventing Local School Boards in the Philippines. Philippine Center for
Investigative Journalism (PCIJ).

Todaro, M. P., & Smith, S. (2015). Economic Development (12th ed.). Pearson: New York, United States.

Tulod-Peteros, C. (undated). Is there a glimmer of hope for Philippine education? Human Rights Forum.

World Bank. Government expenditure on education, total (% of government expenditure). The World Bank
Data. https://data.worldbank.org/indicator/SE.XPD.TOTL.GB.ZS

www.doh.gov.ph

60