Jobless insurance plan faces hurdles

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Calls for the establishment of an unemployment insurance system for the private sector are welcome but implementing this will require legislation, a socioeconomic planning official said.

Unemployment insurance (UI) is a system that pays benefits to employees who have lost their jobs through no fault of their own. Workers have to meet eligibility requirements to avail of the program.

Rosemarie Edillon, undersecretary at the National Economic and Development Authority, said the government was open to establishing system and had already reviewed case studies involving other countries.

In Vietnam, for instance, the UI system is financed by both employers and the government. It is also attached to a very aggressive employment facilitation program that makes hiring and retraining of workers easier.

In the case of the Philippines, Edillon said the government had conducted consultations where it seemed that employers were amenable.

“[T]he Philippines can also afford it. However, we need to educate first the public,” she said.

Edillon said changes to the Labor Code would be needed, with the “ultimate objective” that of freeing the labor market from restrictions. She did not provide details.

The Institute for Labor Studies, in a 2013 report noted that unemployment insurance was so far only available for government workers who are members of the Government Service Insurance System.

The Social Security System, which covers the private sector, has no counterpart program. The agency has expressed willingness to the creation of an unemployment benefit program but says the proper funding – meaning additional contributions – are needed.

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