PIDS Urges Productive Investments in Philippine Education, Health Sectors

The Philippine Institute for Development Studies (PIDS) has stated that while investments in education and health are vital for economic expansion, their impact may be limited if funds are not put to productive use. "Our economy is growing, but the continued growth and expansion of the Philippines is anchored in the quality of our education and our health for our countrymen," said PIDS Senior Research Fellow John Paolo R. Rivera during the 2026 Development Policy Research Month (DPRM) Kick-off Press Conference on Tuesday. He emphasized that health and education are integral to the economic conversation because they shape the country's productive capacity. Mr. Rivera clarified that the core issue is not the amount of government allocation but whether the spending translates into lasting improvements in human capital and productivity. "It's not a question of… how much is the budget, how much is the spending, but whatever that amount is, is that going into productive spending?" he said in an interview on the sidelines of the event. For instance, he noted that investments in classrooms and other school infrastructure would have limited lasting impact if poor construction necessitates repeated repairs or replacements. Similarly, in the health sector, funding often focuses on the construction of hospitals and the expansion of bed capacity, while more resources should be directed towards preventive healthcare instead of focusing mainly on responding to health issues after they emerge. "It's really more of putting money into more productive use," he said, citing preventive care as an example. In the education sector, Mr. Rivera suggested that infrastructure investments should be complemented by enhanced pre-service and in-service training for teachers to ensure their skills and classroom instruction remain updated. "When you invest in teachers and at the same time invest in infrastructure, then you can increase the quality of educational experience being given to the younger generation." He identified bottlenecks in the current system, such as the budgetary process and disbursement process, which can delay the tangible realization of investments. "It takes time for these investments to actually become tangible." Rivera stressed the need for investments and their implementation to keep pace with evolving education and health needs and technological advancements, citing the "time value" of investments. "There's a time value to it. So, the faster the investment, the faster the implementation should be." Otherwise, slow implementation could cause projects to lag behind changing needs to the point where the investments are wasted, he added. Productive investments also require greater trust and confidence among the government, private sector, and households, which may have different motivations for investing in human capital. Mr. Rivera explained that companies might limit spending on employee training because workers could eventually be hired by their competitors, while households invest in education to improve their children's employment prospects. To foster business confidence, the government must provide long-term and predictable policies, regulations, and incentives. "It has to be long term. It has to be predictable. The policy, the regulation, the incentives would have to be predictable because the investment is being done now," he stated. Mr. Rivera pointed out that investors are in a "wait and see stance" because they don't know what will happen in 2028, referring to the upcoming presidential elections. He stressed that policy stability, even across different administrations, is crucial for ensuring the continuity of business investments. "That's why you need trust and confidence to make sure that even if the administration changes, the investment will continue," he added. Furthermore, corruption controversies, including those involving flood control projects, have eroded confidence by raising concerns over policy continuity and changes in infrastructure spending. Rebuilding this confidence, he concluded, necessitates greater accountability in the use of public funds. "Accountability should not be a threat because it's our value proposition," Mr. Rivera said. "We need to be accountable to people, accountable to taxpayers' money." Source: BusinessWorld Economy