THE PHILIPPINES
needs to create 14.6 million jobs in the next four years, and the way to do
this is by keeping the country on a sustained path of economic growth. This
will be possible through a “broad reform coalition” that will work to make
growth inclusive and support policies that will generate more and better jobs.
This was stressed
by experts from the World Bank and the Philippine Institute for Development
Studies (PIDS) as they dialogued with stakeholders in the labor and business
sectors as well as the academe on September 13.
“People want to
earn a living, they don’t want handouts,” said Axel von Trotsenburg, World Bank
vice-president for East Asia and Pacific Region, as he opened the “Dialogue on
Creating More and Better Jobs” at One Global Place in Bonifacio Global City.
The forum was organized by World Bank Philippines and PIDS as part of the
activities for the 11th Development Policy
Research Month.
Job creation is a
real concern as it has a direct link to poverty, and considering that four
billion people around the world live on less than USD4.00 a day, he said.
Karl Kendrick
Chua, World Bank senior country economist, said transforming the Philippine
economy to yield more and better jobs would be the challenge for everyone.
“More and better jobs should be created for 10 million Filipinos who were
either unemployed or underemployed as of 2012,” said Chua as he presented
highlights of a draft report titled “Philippine Development Report (PDR):
Creating More and Better Jobs”, which provides an in-depth discussion of the
country’s jobs challenge.
With an estimated
1.15 million Filipinos entering the labor force every year in the next four
years, a total of 14.6 million jobs would be needed, he said.
The problem is
that the Philippine economy has failed to undergo a structural transformation,
and its inability to produce a massive number of jobs is due to a long history
of “policy distortions”. Chua pointed to the country’s historically weak
economic growth record, which, at an average of just 4.1 percent in the last
three decades, was considerably slower than the average 6.5 percent of its more
dynamic East Asian peers over the same period. Moreover, the share of
manufacturing to gross domestic product has stagnated at around 25 percent
since the 1960s, while other countries steadily increased theirs before moving
on to growth driven by high-skill services.
PIDS
Vice-President Rafaelita Aldaba called for a comprehensive industry roadmap
that will link all sectors, including agriculture and services. “We need to
improve the competitiveness of industries,” she said, adding that effective
government policies and complementary actions such as competitive exchange
rates would also be needed. Structural transformation would require rebuilding
capacity, a shift to high value-added activities, and deeper participation in
regional production networks.
Needed reforms
include secure property ownership; fair competition; more investments in
health, education, and infrastructure; and simple business regulations to
decrease the cost of doing business in the Philippines. Businesses need to
embrace the principle of a level playing field and recognize freedom of
association, while labor needs to recognize valid flexible contracts and reduce
calls for minimum wage hike as food prices fall to facilitate job creation,
Chua said.
A broad coalition
would be needed to tackle these issues, the World Bank economist said. “Instead
of tackling policy reforms one by one, the government, business, and labor,
with the support of civil society, need to work together to come up with a
package of reforms in creating more and better jobs in the Philippines,” Chua
said.
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