MANILA, March 22, 2023 – The Philippines needs to create more and better jobs for young people to enable the country to regain the vibrant labor market it enjoyed pre-pandemic, thus strengthening economic recovery and long-term growth, according to the World Bank’s jobs report released today.
“The Philippine Jobs Report: Shaping a Better Future for the Filipino Workforce" notes that prior to the pandemic, the country sustained an average economic growth rate above 6 percent. The Philippines also experienced faster growth in more productive jobs and an increase in real wages, which led to poverty reduction.
However, the COVID-19 pandemic has reversed some of the progress, with high productivity employment lost and low-paying occupations filling the void. With the strong rebound of the economy, employment indicators appear to have returned to pre-pandemic levels, but the quality of jobs remain a concern particularly for young people.
“The youth group was disproportionately affected by the pandemic shock on the labor market, and the scarring effect may stay long after the economic activities return,” said Ndiamé Diop, World Bank Country Director for Brunei, Malaysia, Thailand, and the Philippines. “While conducive business environment policies will encourage quality job creation in the private sector, more targeted approaches to address youth challenges are urgently needed.”
Over 60 percent of the youth population (ages between 15 and 24) was out of the labor force and the working poverty rate was higher for them even before the pandemic in 2019. In 2022, youth employment remained low whereas overall labor market indicators recovered to pre-pandemic level.
The report notes the potential role of modernizing labor regulations, strengthening the management of international migration, and investing in skills in emerging green and digital sectors, to boost youth employment.
“Active labor market programs including measures like skills training, job search assistance, wage subsidies, public works programs, and entrepreneurship promotion should be further strengthened,” said Yoonyoung Cho, Senior Economist at the Social Protection and Jobs Global Practice at the World Bank. “These can be complemented by modernizing labor regulations through simplifying labor rules and providing guidance on flexible forms of work arrangement; expanding social insurance; and modernizing inspection and compliance verification systems through digital tools.”
Continuing to utilize overseas employment opportunities while ensuring the welfare and safety of migrant workers remains critical, said the report.
Globally, there’s a growing emphasis on the “green economy” and the changing nature of work driven by digital technology, according to the report. Green jobs come from activities to protect biodiversity, reduce waste and pollution, and conserve resources such as energy, materials, and water. They can also be generated from strategies for greater energy efficiency and transitioning towards a decarbonized economy.
Digital jobs typically refer to those that use information and communications technology (ICT) including computing, internet, and mobile phones; freelancing jobs accessed and traded through online platforms (online gig economy); jobs created by online platforms themselves (sharing economy); and digital penetration in real sector jobs especially through e-commerce.
In the Philippines, the report says that there are several areas where policies can enhance the country’s chances of benefitting from these trends, including operationalizing the Philippines Green Jobs Act of 2016 which provides relevant incentives for firms engaged in green activities and generating green jobs; targeted skills development for youth incorporating green and digital skills; economic zones for green and digital job creation; and social protection for the digital workforce.