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The Philippine Jobs Challenge: How to create more and better jobs?

Karl Kendrick Chua's picture
The Philippine Jobs Challenge
By 2016, around 12.4 million Filipinos would be unemployed, underemployed, or would have to work or create work for themselves in the low pay informal sector by selling goods like many seen here in Quiapo, Manila.

The Philippines faces an enormous jobs challenge. Good jobs—meaning jobs that raise real wages or bring people out of poverty—needed to be provided to 3 million unemployed and 7 million underemployed Filipinos—that is those who do not get enough pay and are looking for more work—as of 2012.

In addition, good jobs need to be provided to around 1.15 million Filipinos who will enter the labor force every year from 2013 to 2016. That is a total of 14.6 million jobs that need to be created through 2016.

Did you know that every year in the last decade, only 1 out of every 4 new jobseeker gets a good job? Of the 500,000 college graduates every year, roughly half or only 240,000 are absorbed in the formal sector such as business process outsourcing (BPO) industry (52,000), manufacturing (20,000), and other industries such as finance and real estate.

Around 200,000 new job seekers find work abroad, and around 60,000 will join the ranks of the unemployed, go back to school, or rely on financial support from family for the time being.

This still leaves 600,000 new jobseekers who have no choice but to work in the low-skill and low-pay informal sector in rural and urban areas.

Higher growth can provide more Filipino workers with good jobs. With sustained GDP growth of 7 percent per year and the removal of constraints in fast growing sectors (e.g., addressing skills shortages so that the BPO industry can accelerate its annual growth from 20 to 30 percent), the formal sector will be able to provide good jobs to around 2 million people in the next 4 years - that is double the current figure.

Even so, the majority of Filipino workers will still be left out. By 2016, around 12.4 million Filipinos would still be unemployed, underemployed, or would have to work or create work for themselves in the low pay informal sector such as selling goods in sari-sari stores (small retail stores) and peddling on the streets, and driving tricycles and pedicabs.

Addressing this jobs challenge requires meeting a dual challenge: expanding formal sector employment even faster, while rapidly raising the incomes of those informally employed.

To create good jobs for the 12.4 million, a comprehensive package of reform is needed to create a business environment that is conducive for the private sector to create jobs and increase human capital. Reforms that will secure property rights, open the economy to more competition, simplify business regulations, and increase investments in health, education, and infrastructure are needed.

But will the private sector have the incentive to invest and create jobs for the 12.4 million Filipinos who are left out of the fast growing formal sector?

What do you think is key to creating more and better jobs in the country? Creating jobs for millions is a daunting task, but perhaps we can agree to start somewhere.

 

Creating More & Better Jobs in the Philippines: Views from the man on the street
Filipinos have different views on what it takes to find a good job or raise incomes in the country.

Comments

Submitted by Agens Mendoza on

PUBLIC Funds should not be given to lawmakers as pork barrel..Should be used by legit government agencies to build much-needed legit infrastructures around the country..to decongest land and air traffic..to give road ar safe access to isolated schools..to create & sustain healthcare facilities..to create much-needed classrooms..thereby giving thousands & thousands of professional & skilled Filipinos the much-needed job in their home country..

Submitted by Anonymous on

It is because, the government has no programs on job creations , there are a lot of graduates every year and the government has no programs for them., It is frustrating for the graduates that the reality is? They can't find a job.

Submitted by mely green on

i can't understand why pork barrel has to be donated to some ngo, but please don't be mistaken about ngo. actualyy ngo's are good support to peoples' plight and condition they are a big help to the marginalized. but, pork barrel is intended for philippine development such as infrastructures, school buildings in remote areas, salaries for low-professionals income working in rural, uptown, marginalized areas of our country. they can utilize pork barrel for more concrete assitance to education, health and expansion of social benefits and program for the Filipinos. why not make a comprehensive review and planning. these will mhelp and make our country a low-poverty land. if only our political leaders will have these social-consciousness of helping alleviate the conditon of our people. imagine such grand billion of pesos just drained to personal luxury and so-called "ngo donation!" i want to directly addressed this to Pinoy and to all senators and congressmen/women of our country. please be unselfish... think Filipino!... think our people!.

Submitted by me on

We want more Filipinos to invest in the Philippines. We also want more Foreign investment in the Philippines. These are some of the things we can do to make ourselves competitive to investors, both local and foreign.

1. Fix Labor Laws in the Philippines. We baby employees. We make it hard for employers to get rid of inefficient, unproductive, dishonest, employees. Study Labor Laws in other countries, employers and employees must be responsible, we have to mature as a society. We have such populist, leftist laws that do not foster a competitive environment in the workplace. We like to enable lazy and dishonest employees.

2. Make it easier for people to start businesses. So much red tape!

3. Have more skilled people. Gov should make learning accessible. While it's true that we can't force people to work if they don't want to, but for those who do want to work, aid should be there. More learning in trade skills and crafts. Carpentry, Plumbing, Electricals, Sewing, Masonry, etc. SKILLS THAT WILL ADD MUCH HIGHER VALUE AND HELPS IN NATION BUILDING.

Submitted by andre abalos on

i totally agree with you. pnoy should transfer lawmaker's pork to tesda, ched and dep ed to boost education.

Submitted by will on

The Philippines could utilize tourism (such as eco-tourism) as one of its main drivers of growth in the short-term. Not only does it create jobs for the thousands of people in far-flung areas, it also is sustainable if done right. However, the government will need to invest a lot (and I mean a lot) in transportation infrastructure and it also needs to address safety issues in some areas across the Philippines.

Submitted by Armando T. Domingo on

The NGOs started as a good solution to corruption and inefficiency in governmental services. Certain tasks are better done by private individuals with good motives. But unregulated and unchecked, corruption just transferred from the government agency to the private NGOs. The solution is to identify the legitimate, well meaning, effective and efficient NGOs and for Government to transact only with such NGOs. But the question being asked is how to create jobs or broadly how to have inclusive and environmentally friendly economic growth. I still believe our country has still untapped forestry and agricultural areas that needs development.

Submitted by Armando T. Domingo on

The Philippines have so many denuded mountains and hills. So many hands are required to replant these and take care to see the trees full grown. But how many armies of laborers for reforestation have been formed? The Government is biased towards actions that produce immediate economic returns. Reforestation in the Philippines now have to be planned and executed like one would handle a war. The President must appoint generals to wage this war for a better environment and more abundant forest resources.

Submitted by andre abalos on

Train Filipinos to become entrepreneurs. Most of our graduates look for jobs instead of creating new businesses. Government should provide access to credit. make microfinancing work through sustainable schemes.

Submitted by LEDA CELIS on

Let us look at the labour market model of other countries especially those that promote full employment. A closer study on the mechanics of dealing with the demand and supply of labor leading to closer collaboration of industries and the academe. This calls for an active role of the tripartite sector to recommend enabling policies and monitor results of their efforts.

In some point, the contractualization (5 months work limit) has commodified the human capital at the expense of sacrificing labour rights. While this country needs investors to boost growth, total development should not sacrifice labour power of Filipinos which is the major reason why a multi-billion BPO industry wanted to settle here....Jobless professionals, high growth of informal workers, unemployed youth,lack of opportunities for women .. it is time for the government to review existing programs, current labour market interventions. Findings must be towards redirecting labor policies to address helplessness....

Thank you very much for your interest in this topic. Indeed, the jobs challenge facing the Philippines is very daunting. The country's long history of policy distortions, characterized by low investments, insecurity of property rights, lack of competition, and complex regulations, which some of you have mentioned, has slowed the growth of agriculture and manufacturing--the two sectors which can provide jobs to the poor.

There is no simple and effortless way to address this jobs challenge, as this is linked to deep-seated, structural issues in the economy. Only a comprehensive reform agenda implemented across a range of sectors can foster a business environment conducive to private sector job creation by firms of all sizes. This also means that government alone cannot fully address this problem. The private sector also has a big role to play.

Fortunately, a unique window of opportunity exists today to accelerate reforms that will help create more and better jobs. All of us--that is the government, business, and labor, with the support of civil society--need to work it out and agree on an agenda on job creation.

Thanks also to all who monitored and joined the online chat on jobs!

Submitted by Joseph H. Francia on

Karl,

Congratulations on the Philippine Development Report 2013 and on the blog that you started. While my comments may be late, I hope they're not too late because the problems of unemployment and underemployment are still very much with us.

I congratulate you on the focus of your Report: Jobs, and not only as employees but also as entrepreneurs.

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