Philippine Development Report 2013: Creating More and Better Jobs
- The Philippines faces an enormous challenge of creating more and better jobs in the country.
- With strong macroeconomic fundamentals, the country is in a good position to accelerate reforms that will help create good jobs.
- Meeting the jobs challenge requires that all sectors work together on a package of reforms.
Key challenge: accelerating inclusive growth, the type that creates more and better jobs and reduces poverty.
• More and better jobs need to be created for 10 million Filipinos who were either unemployed (three million) or underemployed (seven million) as of 2012 and for the additional 1.15 million Filipinos who will enter the labor force every year in the next four years. That is a total of 14.6 million jobs.
• Higher growth can provide more Filipino workers with good jobs. With sustained GDP growth of seven percent per year and the removal of constraints in fast-growing sectors (e.g., addressing skills shortages so that the BPO industry can accelerate its annual growth from 20 to 30 percent), the formal sector will be able to provide good jobs to around two million people in the next four years or around double the current figure. Despite this, around 12.4 million Filipinos would still be unemployed, underemployed, or would have to work or create work for themselves in the informal sector.
• Addressing this jobs challenge requires meeting a dual challenge: expanding formal sector employment even faster while rapidly raising the incomes of those informally employed.
The way forward: Government, business, and labor need to work together and agree on an agenda on job creation
• Only a comprehensive reform agenda implemented across sectors can foster a business environment conducive to private sector job creation by firms of all sizes.
• A unique window of opportunity exists today to accelerate reforms that will help create more and better jobs. The country is benefiting from strong macroeconomic fundamentals, political stability, and a popular government that many see as committed to improving the lives of the people.
• To put the country on an irreversible path of inclusive growth, it is crucial to have a broad reform coalition representing many interests to address diverse options.
• Government, business, and labor, with the participation of civil society, need to engage in deeper social dialogue and partnership, and agree on an agenda on job creation. At the heart of this agreement should be the promotion of the welfare of all workers and businesses, not just the minority of formal wage and salaried workers benefiting from current labor regulations and large conglomerates benefiting from anti-competitive structures.
• Instead of tackling policy reforms one by one, which would generate powerful opposition from vested interests, government, business, and labor, with the support of civil society, need to try to agree on a package of reforms.
• The Report recommends that the reform coalition agree on the following responsibilities and principles:
- Government needs to adopt policies that can broaden the reform coalition and give rise to reform beneficiaries who will have a vested interest in continuing the policy.
- Businesses of all sizes need to embrace the principle of a level playing field and extend their corporate social responsibility to their own employees.
- Labor groups need to look after the welfare of all workers, especially informal sector workers and agriculture workers.
- Civil society can perform its role as an active agent of change and serve as a watchdog over governance and adherence to coalition principles and objectives.