World Bank review: Jobs created not good enough to lift Pinoys out of poverty

CEBU, Philippines - The Philippines' economic growth has created jobs but the challenge it is facing is having jobs that can lift many Filipinos out of poverty.

"Economic growth in the last 10 years has created enough jobs to absorb the growing labor force. For many Filipinos, however, the main challenge is having jobs that can lift them out of poverty. With sound macro-economic fundamentals and strong growth, the Philippines is well positioned to address this challenge," said World Bank Country Director of for the Philippines Mara Warwick.

World Bank recently released a study entitled "Labor Market Review: Employment and Poverty in the Philippines," which analyzes the country's labor market performance from the perspective of workers' welfare and identifies labor market constraints to reducing poverty in the country.

World Bank pointed out the need for the Philippines to invest heavily in workers' skills and education, coupled with flexible labor regulations, to encourage firms to generate more jobs that offer better pay and social protection.

The study says the Philippine economy has been growing at an average of 5.3 percent in the last decade, while the working population and jobs have been growing at an average of 1.8 percent and 1.9 percent, respectively.

"Labor productivity has also been growing at 3.4 percent a year. However, the growth of real wages - or wages adjusted for changes in prices of goods and services - has yet to catch up with the rising productivity. As a result, many workers remain poor," World Bank said.

The multi-lateral lender said this reflects two things: scarcity of "good jobs" and low earning capacity of poor workers.

"The report describes good jobs as those which pay better, are in the formal sector, and provide social protection. Many of the newly created jobs are low-paid, precarious, and informal," World Bank also said.

"Low-earning capacity of the poor reflects their low education and skills, limited access to formal jobs, and low bargaining power of informal workers," said Jan Rutkowski, lead economist at the bank. "The scarcity of 'good jobs' reflects the structure of the Philippine economy where low – value-added activities predominate. This is partly due to constraints in the investment climate and the high cost of doing business in the formal sector."

World Bank underscored the need to increasingly invest in the young people through higher spending in health and education. — (FREEMAN)