Creating a million jobs a year

A major challenge for the Philippine government in the next five years is creating about a million jobs annually just to keep the current 6.8 unemployment rate at the same level.

According to a report made by the International Labor Organization on the Philippines, the country’s working-age population aged 15 and above reached 64.2 million in 2013 and will increase to 70.3 million by 2015, and 93.7 million by 2030.

Such robust growth in the Philippine labor force will require urgent policy action since expansion of overseas employment, now at 1.8 million, will have difficulty in sustaining the impressive growth the country has shown in the last decade.

While remittances of Filipinos working abroad have continued to support private consumption, and therefore buoy continuous economic growth, new jobs abroad plus those currently generated by the industry and services sectors will not be able to fill in the gap.

From 2008 to 2013, employment had been expanding by more than 4 million (or 11.8 per cent a year), but this was just enough to keep pace with the number of people who were joining the expanding labor force.

According to the ILO study, the services sector accounted for more than 50 percent of employment, followed by agriculture (31 percent) and industry (15.6 percent). While services and industry grew by 19.6 percent and 17.6 percent, respectively, agricultural employment shrunk by 1.6 percent.

Redirecting investments, more on agricultural sector

Definitely, more investments will be needed by the country to create new jobs in the next five years. Despite the impressive growth of the Philippine economy compared to the region and even the world, this momentum alone will not be able to deliver new jobs if future investments are not carefully thought out.

In particular, the agricultural sector would seem the best path wherein new investments will be able to create the most number of new jobs, while at the same time ensuring the country’s future food supply and improving the earnings of farm workers.

More than 30 percent of the country’s work force is currently in the agriculture sector, and with an aggressive investment program to support farms, forests and fisheries development and upgrading, there is scope to revitalize the sector’s growth and transform it to become once again a strong GDP contributor.

Urgent attention must be given to suiting up and expanding the country’s irrigation and drainage systems to ensure the proper management of the country’s water resources which is a vital ingredient in land and water farming.

Other investment areas will be farm to market networks such as roads, ports, ice plants, post-harvest facilities, and agro-industrial support systems. These will ensure that produce is brought to consumers at prices competitive to imports, and could boost the country’s capability to export agricultural products.

A vote for agriculture will also mean a big vote for inclusive growth. Since poverty incidence is highest in the rural areas where farming communities abound, a revitalized agricultural sector will ensure better incomes and an improved life for those concerned.

Strengthening other selected industries

Aside from agriculture, there is potential in growing other industries where the Philippines can still compete. An example would be the automotive parts industry, which currently already shows potential not only to supply local manufacturers but also the export market.

Same with the electronic parts and assembly sectors that have continued to strengthen over the years because of well-managed export processing zones and a steady stream of competent, disciplined and skilled workers.

We should reclaim our dominance in the shipping industry, not just for the supply of crew staff, but also of officers. All this needs is for marine schools to be compliant to world shipping standards and for the government to facilitate the issuance of sea-manning certifications.

Definitely, continued attention must be given to growing our business process outsourcing sector, even to other areas like legal and medical services where we can leverage on our well-known strengths: a resilient work staff, lower operating costs, and a reliable telecommunications backbone.

Strengthening OFW entrepreneurship

Another area where employment opportunities could be vastly improved would be in encouraging entrepreneurship in micro, small and medium-sized companies using the remittances of overseas Filipino workers (OFW).

With over $20 billion sent home every year, this money has greater potential as job generators instead of just being spent to buy consumables and disposables.

Let’s have special schools like those run by the Asian Institute of Management, but more at the level of technical and vocational training institutions where families of OFWs will be able to explore investment potentials and be guided in managing and growing these.

More importantly, linkages with existing big businesses should be encouraged to ensure success and sustainability of these newbie business ventures.

Capitalizing on professionals

According to a report bared by manpower consultancy Willis Towers Watson, Filipino professionals are among the lowest paid in the region, almost at par with those from Thailand and Vietnam.

The Philippine government should encourage Filipino professionals to seek employment abroad and to take advantage of the one-ASEAN economic community. We should look at this as an opportunity for expanding our overseas job market to Singapore, Hong Kong and China, which offer from 1.9 to 2.2 times higher salaries.

While there are warnings this could further decrease our local pool of professionals to the detriment of national growth, the continued increase in remittances over the last six decades has shown the Philippines has not just survived, it has even managed to grow.

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