Harnessing Filipino Social Capital for Economic Growth and Development

Unity and cooperation of citizens are essential for economic growth and development. Meaningful social relationships and trust between people rely on social capital, or what Fukuyama defines as “an instantiated set of informal values ​​or norms shared among members of a group that allows them to cooperate with one another. with the others”. Social capital is specifically linked to trusts, norms and social networks and is as valuable as physical, human, financial and natural capital.

Close-knit, collaborative communities are where markets thrive and governments shine. Market competition can be a source of efficiency, but it is cooperation, in general, that builds societies, brings progress and nourishes civilizations. Conflicting communities impede business transactions in the economy and make government a battleground for political power instead of serving the public trust.

Filipinos have low social trust. In the 2019 World Values ​​Survey, on the question of whether most people in its own country are trustworthy, the Philippines got only 5.3% affirmative answers, compared to 28.9% for the Philippines. Thailand, 34.4% for Singapore and 63.5% for China. Filipino society has a long history of social division. Regionalism took root even after independence, but new types of fragmentation emerged in Philippine society. These are based on: 1) economic inequalities; 2) social injustices, 3) inaccessibility to quality education for many large differences in educational outcomes; 4) corruption, political dynasties and poor governance; and 5) promotion of class conflict on social media compounded by misinformation and fake news.

As measured by the Gini index, economic inequality has improved slightly for the Philippines, from its peak of around 47.8 in 2000 to 42.3 in 2018, and to 44.1 in the first half of 2021. This remains the highest in the Southeast Asia region. Moreover, available measures that capture the highest incomes in various surveys suggest that the gap between the rich and the majority of the population is one of the largest in the world.

Social justice in terms of implementing the rule of law and respecting property rights must apply to every citizen, whether rich or poor. For many decades, the system of justice and property rights favored the wealthy, resulting in an ever-widening income gap between the upper and lower classes. Our ranking in the Global Rule of Law Governance Indicator fell from the 35th percentile in 2010 to the 42nd in 2015, falling back to the 32nd in 2020. This indicator reflects perceptions of the extent to which officials trust and respect the rules of civil society and, in particular, the quality of contract enforcement, property rights, the efficiency of the police and courts, and the likelihood of crime and violence.

Good quality education is mainly accessible to the upper and middle classes. The rest of the population suffers from an inefficient education system compared to other countries. Fifteen-year-old students in the Philippines performed lower in reading, math and science than most of the 77 countries and economies that participated in the Program for International Student Assessment 2018. More than 80% of Filipino students have not achieved a minimum proficiency level in reading, which represents one of the highest proportions of low performers among all countries and economies that participated in the PISA survey. Singapore, Malaysia, Thailand and Indonesia are far ahead of us.

Social trust (especially in government) has also declined due to endemic corruption which hampers the delivery of basic social services to citizens. Our rank in the control of corruption according to the World Governance Indicator rose from the 23rd percentile in 2010 to the 40th in 2015, then fell to 34th in 2020. This corruption indicator captures perceptions of the extent to which public power is exercised for private gain, including petty and grand forms of corruption, as well as the “capture” of the state by elites and private interests.

Many politicians and interest groups have stoked class antagonism on social media. While exploitative economic and political elites do exist, these messages, coupled with misinformation, have exacerbated social and class divides and led to greater polarization. Regarding disinformation, in its survey from December 12 to 16, 2021, Social Weather Stations found that almost 7 out of 10 adult Filipinos think the problem of fake news in mainstream media and on the internet is serious.

These sources of social divisions in Philippine society necessitate broad reforms in public spending, particularly in the provision of social services, the construction of infrastructure, the implementation of justice and property rights systems, the promotion of transparency and accountability of government personnel and institutions, and fostering the institutional culture of promoting truth and countering fake news.

Dr. Fernando T. Aldaba, Mr. Gil R. Dy-Liacco, and Mr. Joselito T. Sescon are faculty members of the Department of Economics, Ateneo de Manila University.

Comments are closed.