Human Side Of Economics


(Part 1)

The very first book I wrote as an economics educator at the start of the 1970s was entitled A Guide to Economics for Filipinos. Over the next four decades or so, hundreds of thousands of copies of the book were printed in eight successive editions to try to educate high school and even college students all over the country on the very imperfect science of economics. The first seven editions were published by Sinag-tala Publishers, Inc. The latest one (that has been retitled simply Economics for Filipinos) was published in 2020 by Vibal Publishing.

Modesty aside, I think have contributed in a small way to the economics education of at least two generations of the Filipino youth. I still meet people in their forties and fifties who tell me that they used my textbook in their high school years. As long as I retain my mental capacities, I will not stop being an economics educator, especially through columns like this that I write weekly for BusinessWorld. As I always did in the many editions of Guide to Economics for Filipinos, I made sure that I explained economic theories and practices in the context of integral human development. As is indicated by the title of this very column I write for BusinessWorld, I never neglect the “human” side of economics.

One of the many benefits to me of the lockdowns (beside my being able to avoid infection by COVID-19) was the time it gave me to write a book that I am now presenting to the Administration of President Ferdinand R. Marcos, Jr. as a “guide to how he and his economic team can do much to lead our country to First World status in the next 10 to 20 years.” I am convinced that his being able to carry out his “continuity” pledge will further solidify the strong foundations built by previous economic teams so that the road to First World status by 2040 to 2050 will be irreversible. Another six years of an annual 6% to 7% GDP — with a possibility of an upside of 8% to 10% given a significant improvement in good governance (as the President asked the public to pray for on the night he was proclaimed the winner of the presidential election) — almost guarantee our being able to attain our Ambisyon Natin 2040 goal as enunciated by NEDA (National Economic and Development Authority).

The title of the book I have written, The Philippine Economy Towards First World Status, is unapologetically ambitious. Yes, I am strongly convinced that those who are in their twenties and early thirties today (the so-called millennials and centennials) will live to see the Philippines become a First World country.

As mentioned in the Foreword written by banker Francis Sebastian (who led the group that financed the publication of the book), one generation from now — the decade spanning 2040 to 2050 — the Philippines will attain an annual per capita income of more than $12,000 in today’s prices which will bring its economy to the high-income level from the upper-middle-income status in which we will find ourselves in 2024, as recently announced by the Secretary of Economic Planning, Arsenio Balicasan. More importantly, because of the enlightened economic policies that I expect our future leaders (starting with the one that will be inaugurated on June 30) will implement, this level of per capita income will make it possible for all Filipinos to enjoy “a strongly rooted, comfortable and secure life,” as stated in the vision statement of NEDA in its “Ambisyon Natin 2040” declaration.

In my opinion, a high-income level of an annual $12,000 per capita in 2022 prices is sufficient for a country to be considered First World as long as all of us can “enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s future. Our family live together in a place of our own, and we have the freedom to go where we desire, protected and enabled by a clean, efficient and fair government” (Ambisyon Natin 2040). We need not have the astronomical levels of income of today’s so-called First World countries such as Japan ($40,113 in 2019) or the US ($65,280 in 2019). As the articles in the first chapter of the book will illustrate, there are many other human and spiritual values in life that are more important than GDP per capita.

With all due respect to the US, its very high income per capita does not prevent the all too frequent mass shootings of innocent children and adults by trigger-happy malcontents nor the killing of innocent and completely defenseless babies in the wombs of their mothers. I attribute many of these aberrant behaviors to the deterioration of family values in American society. Unfortunately, many families in the US and other advanced economies have forgotten that the family is the very foundation of every strong, peaceful, and happy society.

That is why, although the book is mainly on economics, the first chapter is replete with articles about fundamental philosophical, moral, and theological truths in which should be rooted authentic integral human development. As we increase the amounts of goods and services available to every individual or society, we must also grow in truth, justice, peace, charity, respect for life and the family, etc. That is why we began the book by reviewing certain social and moral principles which are the very foundation of a progressive economy that purports to be “First World.” Having a high per capita income is a necessary but not sufficient condition to deserve being called a “developed economy.”

Chapter 1 can be considered the equivalent of the “Declaration of Principles and State Policies” contained in the Philippine Constitution of 1987. Especially highlighted are the principles of distributive justice and equity in the distribution of income and wealth, the preferential option for the poor, the limits of the free market economy, the duties of the State to address the imperfections of liberal capitalism, the priority of labor over capital, the social responsibility of business, and the great value to a nation of a growing and young population in the midst of a developed world that is greatly suffering economically from rapid ageing and demographic decline, of which China is the most recent victim because of an aggressive population control program in the last century.

As an economist, I am very glad that the training I received at Harvard University in the early 1960s preceded the unhealthy obsession with econometrics and highfalutin quantitative analysis. Without neglecting the quantitative tools of economic theorizing and research, equal emphasis was given to Economic History. We were steeped in the works of the great economic historian Joseph A. Schumpeter, who taught in the faculty of economics of Harvard until his demise just a few years before I started my doctoral studies there. That is why I made sure before I dared to project the state of the Philippine economy one generation from now that I would heed the advice of George Santayana, another famous professor who taught at Harvard. Santayana gave the world the following advice: “Those who cannot remember the past are condemned to repeat it.”

In the second chapter of the book, I made sure that those who are enthusing about the so-called Industrial Revolution 4.0 have a clear understanding of the first three industrial revolutions, which the Philippine economy still has to complete before becoming First World. I also made sure that our leaders in the coming generation will not “reinvent the wheel” by learning important lessons from our neighboring countries in the Indo-Pacific region who preceded us in the road to attaining First World status: Japan, Singapore, Hong Kong, Taiwan, South Korea, and, more recently, China.

It is also in Chapter 2 that I reviewed more recent Philippine economic history by examining the roots of our failures as well as successes, especially in the last 30 years. Our economic failure was dramatically summarized in our having been called for at least two decades “the sick man of Asia.” Whereas we were touted as next only to Japan in facing a bright economic future during the 1950s and 1960s, we fell to the bottom of the list in GDP per capita among our peers in East Asia by the end of the last century. As we compare ourselves to our more successful neighbors, the causes of this failure were not difficult to identify: failed economic policies of inward-looking, import-substitution industrialization that spawned a host of industries that remained “infants” forever; an almost criminal neglect of agricultural and rural development by the State; poor governance; and rampant corruption. Especially debilitating was the “Filipino First” mentality that delivered the Philippine economy to a monopolistic or oligopolistic elite and prevented the flow of much-needed Foreign Direct Investments.

Not everything was bleak, however, in our recent economic history.

Ever since 1986, despite varying qualities of political leadership, we always had the best and the brightest running our various government economic agencies (the Central Bank, the Department of Finance, the National Economic and Development Authority, Department of Trade and Industry, the Department of Public Works and Highways, etc.). Slowly but surely, these honest and competent technocrats were building stronger institutions and crafting and implementing more enlightened policies so that by the second decade of the present century, our GDP consistently grew at 6% to 7% annually, a rate that can be sustained over the next 20 years.

During these last 30 years, as the world experienced three serious global crises (the East Asian Financial Crisis of 1997 to 2000, the Great Recession of 2008 to 2012, and the more recent global economic crisis precipitated by the COVID-19 pandemic and further aggravated by the Russian invasion of Ukraine, the Philippine economy was among the most resilient in the world. Given the incoming Administration of President Ferdinand R. Marcos, Jr.’s choices for his economic team of very competent and experienced technocrats, one can expect a continuation of the yearly GDP growth rate of at least 6% to 7%. There is an upside if the next Administration can manage to significantly improve governance and minimize corruption: the growth rate can even accelerate to 8% to 10%.

(To be continued.)

Those who are interested in purchasing copies of the book (that will be available by mid-July 2022) may contact Rio Quiza at or Henry Siy of Totus Book Store at or FB Page: or FB messenger: For comments, my e-mail address is


Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.