Lack of jobs still one of PHL’s biggest problems–WB

LACK of jobs remains one of the country’s biggest problems, the World Bank has said, and even if the economy continues to grow at its current pace, some 12.4 million Filipinos would still be underemployed or without jobs by 2016.

In its latest Philippine Economic Update report, the World Bank said the country faces an “enormous jobs challenge” that entails providing jobs for 14.6 million unemployed and underemployed workers until 2016.

To help meet the challenge, the World Bank said it was instituting a “package of reforms” that could help increase job opportunities. The reforms should help job creation by small and medium enterprises by simplifying rules, giving priority to sectors with the greatest potential for creating jobs, and securing property rights for rural and urban residents.

This entails cutting red tape, enhancing competition in industries such as ports and shipping, enhancing competition in the water sector, and continuing reforms in the telecommunications sector.

Based on its calculations, the World Bank said only 2.2 million of these workers or 550,000 every year between 2013 and 2016 could be absorbed by the private sector.

This is assuming that the country’s economy growth pushes the business-process outsourcing (BPO) growth to around 30 percent annually and a doubling in the jobs created by the manufacturing sector, the World Bank said.

“The formal sector will be able to provide good jobs for around 2.2 million people in the next four years,” it said. “But the majority of Filipino workers will still be left out. By 2016 around 12.4 million Filipinos would still be unemployed, underemployed, or would have to work in the low-pay informal sector.”

The World Bank said the Philippines’s jobs challenge also entails preventing these workers from joining the informal sector, which already employs some 21 million Filipinos.

The informal sector, the bank said, accounts for as much as 75 percent of the country’s total employment. Most of these workers are found in the services sector.

“In recent years, net job creation has fallen short of the increase in the working-age population [i.e., the potential labor force] indicating that the economy remains hard-pressed to provide good jobs to the majority of Filipinos,” the World Bank added.

In terms of property rights, the World Bank said the government has to ensure that farms have clear property rights in rural areas, as well as provide better farm-support services and linkages between smallholders and agribusinesses.

To improve property rights in urban areas, the bank urged the government to simplify and decentralize the lengthy procedures to prevent the majority of the population from obtaining secure rights to their property.

“To better sustain these reform efforts and to increase their chances of success, the government will need to invest more in health, education and infrastructure. These investments can be sustained by institutionalizing reforms in public finance,” the World Bank also said. –Cai U. Ordinario, Businessmirror