• According to the World Bank, underemployment is the main challenge the Philippine labor market is facing
  • It said jobs that are informal, temporary and low-paying are keeping poor workers below the poverty line
  • World Bank suggests creating better  jobs and investing on quality education

In their latest market report titled “Labor Market Review: Employment and Poverty in the Philippines,” the World Bank, a Washington-based multilateral lender, analyzed the labor market performance in the Philippines from the perspective of workers’ welfare and identified labor market constraints to reducing poverty in the country, and pointed out the pervasive underemployment issue of the country.

The World Bank shared the highlights of its report on Friday, June 17. The report shows poor workers remain below the poverty line despite the country’s economic growth due to “jobs that are informal, temporary or casual, and low-paid.”

“People in the Philippines are working hard but are still poor. Having a job does not lift one out of poverty. It needs to be a good job to lift you out of poverty,” said Jan Rutkowski, lead economist at the World Bank’s Social Protection and Labor Global Practice.

“Economic growth has created enough jobs to absorb the growing labor force. There has been no increase in unemployment, but the problem has been that the quality of jobs were not meeting the aspirations of young people entering the labor market. There’s still a lot of informal, low-paying jobs,” he added, pointing out that better jobs need to be created.

As per an article published by The Manila Times, the World Bank said greater investment in workers’ skills and education, coupled with flexible labor regulations, are needed to encourage firms to generate more jobs that offer better pay and social protection.

Minimum wages set by government also need tweaking to level the field to that would entice employers to hire under the formal sector, Rutkowski said, while acknowledging that there are legitimate sectors that cannot depart from contractual hiring.

“If the Philippines could sustain reforms that would improve property rights; enhance competition; put more resources in health, education, and infrastructure; and simplify business regulations, the country make growth even more inclusive,” said World Bank country director Mara Warwick.