Providing quality jobs to the poor remains a challenge for the Philippines despite inclusive growth gains, the World Bank said in a report.
In the latest edition of its “Philippines Economic Update”, the Washington-based lender noted that unemployment had hit a historic low but underemployment remained high.
“More importantly, unlike its high-performing East Asian neighbors with booming manufacturing sectors that provide large numbers of labor-intensive jobs, a majority of Filipino workers that transition out of agriculture generally end up in low-end service jobs,” it added.
The World Bank said mean wages remained stagnant, growing by only 4 percent between 2006 and 2015.
Some households earn as little as P50-P100 a day and many of the urban poor are trapped in low-wage and low-productivity jobs in the informal service sector, it added.
“High-quality jobs and faster real wage growth are the missing links to higher shared prosperity in the Philippines,” the World Bank said.
It pointed out that “government needs to make growth more inclusive to make it possible for Filipinos to achieve higher and more stable income through productive employment.”
In particular, the government needs to affirm its commitment to structural reforms that promote competition, secure property rights, lessen regulatory complexities and improve the country’s investment climate.
Creating better employment opportunities, especially among the poor, will require investing in the future, which means prioritizing both physical infrastructure and human capital, it added.
“The government needs to improve human capital, especially for poor households, to ensure that Filipinos acquire the skills needed in the 21st century economy,” it said, for instance.
The World Bank also suggested investing in children starting in the first 1,000 days and targeting support to poor households and vulnerable groups to help them mitigate shocks and improve their human capital.
Key education and skills challenges facing the Philippines include ensuring that students learn relevant skills, reducing high dropout rates for the poor and developing socioemotional skills.
“Specifically, public authorities need to boost learning in basic education, increase enrollment and completion rates in secondary education among the poor, and develop socioemotional skills in addition to traditional technical and cognitive skills,” the World Bank said.