Jobs challenges tagged

Second of two parts

THERE IS NO LACK of skilled workers as evidenced by the demand for Filipino workers abroad, said John V. C. Nye, economist at George Mason University and executive director of the Angara Centre for Law and Economics, a think tank. The unemployment problem, he claimed, stems from the country’s inability to attract foreign investments and the lack of flexibility in the labor market.

“The problems of the [Philippines] stem from rigid rules and regulations, low productivity in both industry and agriculture, an unusually high minimum wage in the commercial/urban sector, the inability to hire and fire many workers easily due to the regularization policy, lack of opportunities for investment on the part of local and foreign capital, and insufficient commercial land in the most desirable areas,” Mr. Nye said.

The country’s Labor Code sets a six-month probationary period for employees. Those who become regular can be dismissed only on valid grounds such as serious misconduct, neglect of duties, fraud and commission of a crime against employers. The regularization policy provides protection from being terminated without just cause.

National Economic and Development Authority (NEDA) Deputy Director-General Emmanuel F. Esguerra agreed with Mr. Nye, pointing out that the regularization policy, which is intended to protect workers, paradoxically brings harm because employers resort to work contracts.

“Firms need flexibility in a competitive environment but the policy makes it costly to adjust. If you must protect the worker, there must be another way to provide that safety net,” he said.

Mr. Nye added that rules barring foreign investments in certain sectors, a prohibition against foreign workers as well as the lack of a competitive environment was discouraging investors from venturing to the Philippines .

“The Philippines’ emphasis on protectionism of domestic industry, nationalistic tariff and industrial policies, as well as the usual litany of restraints on foreign capital make investing locally a big risk. Easier therefore to just hire Filipinos in foreign companies abroad,” he said.

Moreover, opportunities in the country are very lopsided because these are concentrated in Metro Manila.

To address the unemployment challenge, the Department of Labor and Employment has introduced the Public Employment Service Office or PESO — a facilitation service that uses the official Phil-JobNet portal — that Labor Undersecretary Ciriaco A. Lagunzad III claimed was succeeding.

“One way of assessing the performance of the PESO … is by determining the placement rate,” he said, pointing out that these were 68% in 2010, 72.2% in 2011 and 80.9% in 2012.

Employers from different industries can post vacancies on Phil-JobNet, making these known to jobseekers who have registered.

The types of occupations advertised, said Mr. Lagunzad, are mostly clerical (22.1%); service and shop and market sales works (21.3%); and technicians and associate professions (16.5%). Majority of the applicants were service, and shop and market sales workers (24.0%), clerks (21.7%) and professionals (13.3%).

To address problems in terms of skills, a review of the education and training curriculum has also been made. The Enhanced Basic Education Act, popularly known as K+12, which added two years or senior high school to basic education, has been implemented.

The Technical Education and Skills Development Authority (TESDA), tasked to provide skills training and vocational courses, and the Commission on Higher Education (CHEd), responsible for monitoring higher education in both public and private institutions, were said to be also contributing.

On the whole, Employers Confederation of the Philippines Director-General Vicente R. Leogardo, Jr. said there should be close coordination between the government, the private sector and schools so labor supply and skills are attuned with market needs.

“Manpower and skills development should be a joint venture between the government and the private sector, with the latter playing an increasing role through the sharing of the cost of development and the actual management of training programs,” he said.

Jorge V. Sibal, director of the Center for Labor and Grassroots Initiatives at the University of the Philippines’ School of Labor and Industrial Relations, said the government’s medium-term blueprint, the Philippine Development Plan, must be designed for the long term as it is presently “short sighted.”

“NEDA should be empowered to formulate at least a 20-year development plan, which should be implemented by the present and future presidents or administrations.”

The 2011-2016 plan aims for inclusive growth and details strategies to achieve this. The NEDA is updating the plan given current trends.

For Mr. Esguerra, the country’s run of strong growth points to the solution.

“The long-term solution really is high economic growth that is sustained because that will sustain employment growth,” he said. “There is that certainty that jobs will be stable.”