Empowering the informal workforce through recognition and upskilling

Because of COVID-19, there has been a significant shift in how Filipinos use the internet. Many of our behaviors have shifted online as a result of the imposed health measures and logistical challenges during the peak of the pandemic. This is evident in how we shop (e-commerce), send and receive money (mobile banking), and consume entertainment (digital streaming). The Philippines was slowly embracing the “age of digitization,” but the pandemic hastened our progress. And we have continued to embrace this shift to this day.

For example, in a country where the majority of the population is “unbanked,” cash is still king. However, we see that online payment adoption increased from 14 percent to 20.1 percent between 2019 and 2020. We are also seeing more people and businesses embrace this type of change as a means of adapting to the norm and diversifying their revenue streams. I know a lot of people, especially digitally savvy youth, who have the thinnest wallets because they don’t carry cash anymore. Businesses adapted to their lifestyle by ensuring mobile transactions are available. Even the taho vendors in UP Diliman and kiosks around U-belt are ready to serve their techie customers with printed QR codes for easier payment transactions.

This is just one example of how technology and various digital platforms can help improve the lives of the informal workforce and how many MSMEs can support their operations. Adapting to the rapid growth of the digital economy is just one slice of the pie on how to survive the post-COVID era. The other factors include recognizing the positive impact of the informal sector on the economy and upskilling them for their personal growth and economic advancement.

Recognizing the informal workforce’s contribution to our economy is the first step. It is past time to shine a light on their efforts, recognize their worth, and legitimize their contribution to our GDP. They are the unsung heroes who keep the engine running through their consumption habits and sheer hard work ethic. From food vendors to handymen, the side hustles we see on every street corner are microcosms of our economy’s vibrant and dynamic nature. This industry thrives on the informality and flexibility that traditional industries cannot offer.

Next is the government’s ability to help upskill them. Imagine a street food vendor learning digital marketing skills and employing them to grow his customer base. Picture a handyman enhancing his knowledge of sustainable practices, thereby attracting eco-conscious clients. Such transformations are not only viable but are also essential for the overall growth and stability of our economy.

The national government is working to keep Filipinos competitive in the labor market. One method is to introduce “microcredentials,” which are qualifications aimed at developing specific skills and knowledge in a variety of fields. The government is also bolstering similar initiatives by collaborating with private entities. Private companies should be open to knowledge sharing and skill development that benefits not only their employees but also the communities they serve. They should devote time and resources to educating those around them and serving as a tool to prepare individuals for careers in a variety of industries.

Workers in the gig economy or informal sectors can benefit from training in areas like digital literacy, business management, and customer service. This can help them improve their services, increase their earnings, and contribute more to the economy. This not only benefits the country by producing the best talent, but it also broadens everyone’s perspective. The way I see it, this is a win-win situation.

In 2023, despite grappling with inflation, the Philippines displayed incredible economic tenacity. The International Monetary Fund (IMF) is forecasting an economic growth rate of 6.0 percent for the country, signifying the lower range of the government’s target. This is backed by a promising performance in the first quarter of 2023, with the Philippines not only on track to meet growth goals for this year but also keeping pace with the fastest-growing economies in Southeast Asia. However, every silver lining has a cloud. The inflation rate in the Philippines remains a challenge, with an annual inflation rate of 6.6 percent as of April 2023. Rising costs impact the affordability of goods and services, encompassing sectors from food to healthcare, recreation to personal care. On a brighter note, the forecast suggests a glimmer of hope, with inflation rates anticipated to drop to around 3.1 percent in 2024 and 3.2 percent in 2025.

The Philippine economy’s resilience in these difficult times can be traced back to its lifeline, the informal sector. In essence, skilled workers are critical for economic growth and stability, whether in the formal or informal sectors. They are especially important in inflationary economies because they can help boost productivity and economic output, which can help manage inflation. That is why there is a need to recognize this sector and ensure that programs to upskill them are readily available, opening up a world of possibilities. As we embrace a thriving digital economy, let us do so with the unwavering spirit of tenacity and adaptability that has always been at the heart of every Filipino worker.