The Philippines needs to provide an environment conducive to investments especially in manufacturing to create more jobs crucial for poverty reduction.
In a report, the Asian Development Bank (ADB) said the country only generated an average of 780,000 new jobs annually for the past two years, short of the official goal of adding one million jobs yearly.
The ADB said about 800,000 jobs each year are needed to absorb new entrants into the labor force. Growth must exceed this figure to provide work to three million now unemployed and enable the 7.3 million underemployed to expand their working hours and earnings.
To achieve this, it is thus imperative for the Philippines to broaden its sources and types of work, the bank said.
“A larger and broader manufacturing base could generate substantial and productive employment for skilled and moderately skilled workers, as it has done in regional economies with higher employment rates and incomes,” the bank stressed.
ADB said the decline in the share of manufacturing in the Philippine gross domestic product to 22 percent in 2012 from 26 percent in 1990 helps to explain the weakness in the labor market.
The report noted that while over half of the workforce is now employed in services, the sector cannot absorb all the job seekers.
“Well-paid services employment usually requires higher levels of education and skills, which does not offer much hope to the majority of job seekers,” it reasoned.
To boost manufacturing, the bank underscored the need to undertake sustained efforts to improve the environment for direct investments, build on gains made in instituting good governance and upgrade infrastructure.
“The government must press forward with initiatives to formulate, in coordination with the private sector, industry road maps that include development strategies for subsectors such as manufacturing and agribusiness,” it said.
The Philippines has already unveiled a three-phase roadmap to build a globally competitive manufacturing industry.
Source: Philexport, The Philippine Star, October 7, 2013
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