Better social protection to boost Philippine labor market

MANILA, Philippines — The Philippines should boost its social protection programs, especially for vulnerable groups, to ensure that the country’s labor force can bounce back from the pandemic and address worsening inequality and poverty.

During the closing session of the Annual Public Policy Conference of state-run think tank Philippine Institute for Development Studies, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said the relatively low investment of governments in their people is among the challenges faced by the labor market.

UNESCAP Social Development Division director Srinivas Tata said the Philippines and the majority of countries in Asia-Pacific lack the resources to invest in people, evident in the lack of social protection, which is supposed to help individuals cope with economic crises and shocks like COVID-19.

Reasons for this include low political commitment, lack of public support and lack of resources, among others.

“While building new roads may be seen as an investment, this view is skewed. It is important to understand that investing in people has a huge impact on the country’s development,” Tata said.

Data showed that the Philippines is investing a measly 2.6 percent of its gross domestic product to social protection, lower than the Asia-Pacific average of 4.9 percent and way below the global average of 11 percent.

In the region, only Japan, Mongolia, Russia and New Zealand are spending more than the global average.

Worse, nearly 70 percent of the region’s population are left completely unprotected throughout their life. In the Philippines, less than 37 percent have access to at least one protection scheme.

“While efforts have been expanded for social protection even in the Philippines, only a handful of countries have comprehensive schemes. Even before the pandemic, millions of people already live in poverty with lifelong consequences,” Tata said.

Estimates from UNESCAP suggest that a basic social protection scheme costs two to six percent of GDP for a package of health care, and child, maternity and disability benefits.

“This is far lower than what many people think of and compared to other sectors. We believe that this is an affordable cost for many countries in Asia-Pacific especially as the pandemic has highlighted the importance of social protection,” Tata said.

Further, Tata noted that countries which were able to handle the pandemic well are those with well established social protection programs.

He said governments should realize that they cannot be business as usual and should be willing to allocate more funds.

“You don’t have to be rich to start implementing social protection. Yes, it needs resources and re-prioritization but you can start with a good social base,” Tata said.

“Having a good and healthy work force supported by social perception is the basis for the next leap of development,” he said.

He argued that the Philippines should find a way to extend social protection to the informal sector which consists of independent, self-employed small-scale producers and distributors of goods and services.

Unfortunately, workers in this sector are not covered by the Philippines’ labor laws and regulations. In fact, two out of five workers in the country are less likely to have formal work arrangements and access to social protection and are more at risk during a crisis.

In Asia-Pacific, close to 70 percent or 1.3 billion people are trapped in irregular employment with no contract, no access to stable salary, no social protection, and are often performing hazardous jobs.