MANILA, Philippines -- Schools in the Philippines are producing the wrong kind of skills for its labor market needs, which is hurting economic growth, according to an Asian Development Bank (ADB) study released Tuesday.

There were too many highly educated people chasing too few jobs, the Manila-based lender's report said.

The study, written by ADB economist Hyun H. Son, found per capita labor productivity plummeted between 1997 and 2003 as "those with higher education have crowded out the less educated in terms of job opportunities."

Filipino labor productivity increased by less than 7.0 percent between 1988 and 2000, compared with 30-50 percent in neighboring Asian countries like Indonesia, South Korea, Malaysia and Thailand, it said.

Foreign remittances from Filipinos working abroad have become an important source of household income, representing about 10 percent as of 2003, while the share of agricultural wage income, non-agriculture wage income, and enterprise income all declined slightly compared with 1997, it added.

The report said that with higher education being an "important determinant of employment" in the Philippine market, "low-productivity jobs are taken over by the more educated labor force," which in turn has "lowered the price for skilled labor over the period."

Philippine law provides free elementary and secondary schooling for all children, but offers little support for specialization beyond basic education.

Son said the findings show "that the current education sector does not supply the right kind of skills that are demanded by the labor market."

Accelerating economic growth would require government action in addressing the labor mismatch, he added.

"From a policy perspective, going beyond universal coverage in education is imperative because what is required is an expansion of the supply of the right kind of skills."