Philippines secures $500-M ADB loan to fix labor market scarring

MANILA, Philippines — The Philippines has secured fresh loan from the Asian Development Bank to fund programs that would help the government fix the ugly scars left by the pandemic on the country’s labor market.

The $500 million policy-based loan would also help “create an enabling environment for existing and emerging businesses to flourish and spur more employment,” the ADB said in a statement on Thursday.

Government data shows that while unemployment has been on a downtrend since the economy reopened, the jobs being created are low quality and do not pay well at a time of boiling inflation.

The Philippine Statistics Authority reported that the jobless rate in the country eased to 4.2%, or 2.18 million unemployed Filipinos, in November last year. This was slightly lower compared to the 4.4% rate in the preceding month.  

However, the proportion of underemployed Filipinos, or those seeking longer working hours to augment their monthly income, worsened to 14.4% in November from 14.2% in October. This was equivalent to 7.16 million underemployed persons in November against 6.67 million recorded in the previous month.

READ: Unemployment eases in November, but data points to declining job quality

Under the Post-COVID-19 Business and Employment Recovery Program, ADB said it is assisting the government in creating a “more liberalized business and investment environment."

The program also supports government initiatives to expand labor market programs that address skills mismatches and promote training to reskill and retool workers to meet new demands in the post-pandemic jobs market, the Manila-based lender added.

“With the economy slowly moving towards a sustainable growth path, it is important to ensure private enterprises are supported with policies that make it easier for them to do business and generate employment,” said ADB Senior Public Management Economist Sameer Khatiwada.

“This program is expected to help create jobs, get businesses back into action, and pave the way for displaced workers, youth, and women to return to the labor market by enhancing their skills through training and linking them to good quality jobs,” he added.