The World Bank said that the Philippines need to create 14.4 million good jobs- jobs that raise real wages and bring people out of poverty- until 2016.
The Washington-based agency in the latest Philippine Economic Update said there were 10 million people unemployed or underemployed as of 2012 and with 1.1million new entrants each year, some 14.4 million good jobs have to be created through 2016.
The WB said that over the past decade, only a fourth of the new entrants to the labor force each year are able to get good jobs in the formal sector.
“In addition, better jobs need to be provided to another 21 million Filipinos who are informally employed. All in all, informal workers comprise about 75 percent of total employment,” it said.
According to the World Bank, of the 1.1 million potential entrants to the labor force each year, (but) only 25 per cent or 250,.000 find jobs.
It said that of the half a million college graduates in the Philippines each year, around 240,000 can be absorbed in the formal sector, such as the business process outsourcing sector which can employ around 52,000 graduates a year, and the manufacturing sector which can absorb an estimated 20,000 entrants.
The World Bank said that around 200,000 of the college graduates find jobs abroad, and about 60,000 will be unemployed or will exit the labor force.
“The remaining 600,000 new entrants, of whom around half high school degrees, have no other option but to find or create work in the low-skill and low-pay informal sector,” the agency said.
The World Bank said that the higher growth can provide more Filipino workers with better jobs.
The National Statistical Coordination Board earlier reported that the Philippine economy expanded by 7.8 percent in the first quarter of the year, higher than the 6.5 percent increase registered in the same period last year.
The first quarter Philippine performance not only exceeded the government’s full-year goal of 6 to 7 percent, but it was also the highest growth registered among the major East and Southeast Asian economies.
The World Bank said that under the current high growth s and the removal of key binding constraints in fast growing sectors, the formal sector will be able to provide good jobs for around 2.2 million people in the next four years, or 550,000 every year between 2013 and 2016.
The agency cited constraints that should be addressed such as inadequate skills so that the BPO industry can accelerate its annual growth from 20 to 30 percent, and power and other constraints so that the manufacturing can see a doubling of employment.
“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 World Bank said that to be able to create good jobs for the 12.4 million Filipinos by 2016, a comprehensive package of reforms is needed to create a business environment conducive to private sector job creation, specifically job creation by small and medium enterprises.
“Addressing this job challenge requires meeting a dual approach: expanding formal sector employment even faster, while rapidly raising the incomes of those informally employed. The enormity of the challenge underscores the need to commence a wide-ranging set of reforms today,” the agency said.
The World Bank said that reform areas that deserve the highest priority include: simplifying rules and regulations to encourage the growth of firms of all sizes; enhancing competition in the economy, giving priority to sectors with the greatest potential in generating jobs; and securing property rights on land for both rural and urban dwellers.
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