EMPLOYMENT is still the greatest challenge of the Philippines in sustaining the growth of the Philippine economy, the National Economic and Development Authority (NEDA) said.

The World Bank and the Asian Development Bank both agreed on the great strides made by the Philippine economy but disagreed on how to sustain this growth. The WB said the Philippines must pursue aggressive reforms while the ADB called for the creation of “innovative economies.”

NEDA said that despite the remarkable growth of the country’s economy, generating employment and ensuring that these are of good quality remain its greatest challenge.

The October 2012 Labor Force Survey of the National Statistics Office estimated the number of jobless Filipinos at 2.8 million, or 6.8 percent, slightly higher than last year’s 6.4 percent.

The survey also showed that underemployed Filipinos reached 7.2 million, or an underemployment rate of 19 percent of the labor force, slightly lower than last year’s 19.1 percent.

Meanwhile, the number of employed persons reached an estimated 37.7 million, or an employment rate of 93.2 percent, lower than last year’s rate of 93.6 percent.

NEDA earlier noted that economic expansion should create more opportunities for ordinary Filipinos for them to experience inclusive growth.

“In order for the ordinary Filipinos to experience the economic growth, it should lead to an increase in income and improvement in employment opportunities,” NEDA Director General Arsenio Balisacan said.

Balisacan added that the government’s objective is to ensure that the growth will continue to gain momentum and to make it more inclusive so that even ordinary people masses can also feel the improvement.

The NEDA chief stressed that inclusive growth could only happen if there is a sustainable and rapid improvement in employment opportunities.

“There is a requirement on continued improvement in investment climate and continued expansion of investment in the country so that there will be more opportunities,” he added.

Balisacan also assured the public that the government would continue efforts to improve the country’s competitiveness as this will lead to more investments that will create the needed employment in the medium to long term.

He reported that the NEDA has been collaborating with other agencies, including the Department of Labor and Employment, to identify strategies to boost employment in the short term.

Economic reforms needed
For its part, the World Bank suggested that the Philippine’s high growth could be sustained and made more inclusive if economic reforms are aggressively pursued to create more and better jobs and reduce poverty at a faster rate

“The country is currently benefiting from strong macroeconomic fundamentals, political stability, and a popular government that is seen by many as committed to improving the lives of the people,” the Washington-based lender said.

The bank also noted that several reforms have successfully started in the country, especially in public financial and debt management, anti-corruption, and tax policies.

It further said that the Philippines could take advantage of new opportunities arising from the global economic rebalancing and the strong growth prospects of the East Asia region, if there would be further structural reforms, especially in areas which will have more impact on the lives of the poor, along with investments in infrastructure, education, and health.

Closing skills gap
Asian Development Bank (ADB), however, said that Asia and the Pacific, including the Philippines, must overcome skills gaps and scale up technical training to create innovative economies able to generate sustainable, inclusive growth.

 “Countries in Asia will not be able to create sufficient employment unless they address the serious skills mismatches that exist in their labor markets,” ADB noted.

The Manila-based lender stated that equipping secondary school and university graduates with employable skills requires a shift from academically-oriented learning to demand-driven courses relevant to industry needs. It said that this could be achieved through credible national qualification frameworks and certification systems and closer links among schools, universities, and technical and vocational education providers.

Developing skills of disadvantaged groups, including women, will bring substantial economic benefits and help reduce the growing income inequality in the region, it added.

ADB also recommended more public-private partnership to increase the cost-efficiency, quality, and relevance of technical courses.

The lender noted that greener economies could generate up to 60 million additional jobs over the next two decades and lift tens of millions of workers out of poverty.

Green jobs require a mix of new technical skills related to renewable energy, climate change adaptation, trade, recycling and use, and engineering, which are not yet addressed adequately by training institutions.

ADB said that it has ongoing programs in support of technical and vocational education and training in 12 countries, amounting to about $500 million.

Whatever happened to the Public-Private Partnership projects that President Benigno Aquino 3rd said in first State of the Nation Address in 2010 were going to be the main component of his administration’s economic plan?

Today only two PPP projects are in operation, both of them relatively minor infrastructure works.

Massive PPP projects in agriculture, industry and tourism are needed to generate large-scale employment.