Talent misallocation may be costing PH economy up to 10% of GDP—PIDS expert

The Philippines may be losing as much as 10% of its gross domestic product (GDP) because workers are not always able to use their skills at their highest productive value, according to the Philippine Institute for Development Studies (PIDS) senior research fellow Michael Ralph Abrigo.

Speaking at the 2026 Development Policy Research Month (DPRM) Kick-off Press Conference and Media Awards on September 1, 2026, Abrigo said the country’s challenge is not limited to the production of skilled workers. It also involves ensuring that workers are deployed and allowed to work in ways that make full use of their capabilities.

“What we estimate is as much as 10% of our GDP is actually lost because of this misallocation of talent,” Abrigo said during the open forum.

He explained that talent misallocation occurs when the system does not allow skilled workers to use their skills at their most optimal level.

It is different from unemployment or a lack of skills. A person can be employed, educated, and skilled and still experience talent misallocation if they perform work below their capabilities or spend too much time on tasks unrelated to their core expertise.

The problem can occur even among workers who are already employed. Abrigo cited teachers as an example, noting that administrative reports and committee requirements can take time away from their core responsibility of teaching.

“Imagine you have to do all these reports kasi part ka ng mga committees. So, bago ka pa makapagturo kailangan mo munang gawin ‘yun. [Imagine having to prepare all these reports because you are part of various committees. So, before you can even teach, you have to take care of all those reports first],” he said.

By comparison, he noted that teachers in other countries can arrive in the classroom and focus on teaching, allowing them to deploy their talents without some of the additional requirements.

For Abrigo, the question is therefore not simply how the country can produce skilled workers, but how it can convert human capital into productive workers.

“We actually have estimates—recent estimates. Gaano kalaki ang nawawala sa productivity ng buong bansa because of this misallocation of talent? [How much productivity does the country lose because people’s skills and talents are not being used in the jobs or activities where they are most productive?]” he said.

The issue also extends beyond formal policies, Abrigo pointed to informal rules and practices that can affect how Filipino workers are valued and deployed.

He cited cases in which qualified Filipino professionals may still be subjected to additional scrutiny because of characteristics unrelated to their competence.

“These are informal rules that somehow limit our capacity to use our workforce,” he said.

The experience of senior high school graduates provides another example of how perceptions can affect the use of human capital.

Abrigo recalled that when senior high school was first introduced, employers were initially skeptical about the capabilities of its graduates. Although the government and Department of Education had said the students were trained to perform specific tasks, the private sector was not immediately convinced.

That changed as employers gained experience with the graduates.

“I think that openness comes with time, with experience,” Abrigo said, noting that employers who had tried hiring senior high school graduates found them to be “very efficient” and “very productive.”

He said a study found that senior high school graduates were paid about 15% more than workers who had completed only junior high school.

The discussion suggests that the return on investments in education depends not only on whether people acquire skills, but also on whether employers recognize and effectively use those skills.

PIDS senior research fellow Valerie Gilbert Ulep similarly linked human capital investments to productivity, emphasizing that health and education should be viewed as productive assets rather than as separate social-sector concerns.

Ulep said poor health can affect attendance and productivity, with the effects accumulating across the economy. He also stressed the importance of investing in preventive health care so that people remain healthy and productive rather than entering the health system only when illnesses have reached advanced stages.

Education presents a parallel challenge. While access to education has expanded, Ulep said the focus must increasingly shift toward the quality and relevance of learning because the economic return from schooling depends on what people actually know and can do.

“Education is productivity infrastructure, like health,” Ulep said in his presentation.

The connection runs both ways. Healthier and better-skilled workers can be more productive, while a stronger economy can generate better jobs and greater resources for continued investment in human capital.

The private sector, meanwhile, needs conditions that allow it to invest and create productive employment. Abrigo identified regulatory predictability as one of the key requirements for businesses, alongside assurance that the private and public sectors can operate within clearly defined roles.

“The two things that are actually needed by the private sector are, firstly, regulatory predictability,” Abrigo said, adding that businesses also need “market capture or market assurance.”

For PIDS senior research fellow John Paolo Rivera, these issues point to the need to view the economy, education, and health as interconnected parts of a single system rather than as separate policy areas.

The Philippines has reached upper-middle-income status, Rivera noted, but economic growth should ultimately be assessed by whether it builds capabilities that support higher productivity and sustained transformation.

The challenge, therefore, is not simply to create more programs or produce more graduates. It is to ensure that investments in people translate into capabilities that are actually used.

Abrigo said this requires moving beyond counting programs, projects, and compliance toward asking whether incentives are aligned, whether capabilities are lasting, whether accountability is shared, and whether interventions are producing system-level outcomes.

“The goal is not simply to do more things. It is to make the system work better together,” he said.

PIDS honors media partners in advancing research-informed public discourse

The Kick-off also featured Saliksik at the Balita: PIDS Media Awards 2026, which recognized more than 35 media organizations and journalists who have consistently brought PIDS research and experts into public discussion.

The awardees were:

Tagapanguna sa Himpapawid: Outstanding Broadcast Media Partner — Bilyonaryo News Channel, for consistently featuring PIDS research and experts in its broadcast programs from July 2025 to July 2026.

Daluyan ng Dunong: Outstanding Print/Online Media Partner — BusinessWorld, for highlighting PIDS studies and experts in its online coverage.

Kwentista ng Pananaliksik: Most Supportive Print/Online Journalist — Ricardo Austria of Manila Bulletin and Ian Nicolas Cigaral of Philippine Daily Inquirer, for consistently citing PIDS studies and experts.

Boses ng Talino: Most Supportive Broadcast Personality — Robert Tan of Bilyonaryo News Channel, for frequently featuring PIDS research in television segments.

Lingkod-Dunong: Most Supportive Government Media Partner — Philippine Information Agency (PIA), for continuing to support the dissemination of PIDS research through news features, interviews, and special coverage.

The recognition underscores the media's role in ensuring that policy research moves beyond academic and government circles and becomes part of public understanding and policy dialogue.

The 2026 Development Policy Research Month is the 24^th annual observance of the national policy research month and is held every September pursuant to Malacañang Proclamation No. 247, s. 2002. The 2026 Kick-off marked the start of a month-long series of policy discussions examining how the Philippines can better develop and use its human capital. (PIDS)