Filipino unskilled workers among world’s least productive—World Bank

By: Paolo G. Montecillo - 11 years ago

Screengrab from econ.worldbank.org

MANILA, Philippines—Minimum wage earners in the Philippines are among the least productive unskilled workers in the world, a result of decades of underinvestment in infrastructure, education, and healthcare, a new World Bank report showed.

In a report on Thursday, the Bank said Filipinos have the ability to excel given the opportunity, as shown by the resilience of the country’s migrant workers and the success of the local business process outsourcing sector.

The problem, the multilateral-lender said, was the government’s decades of failure to implement programs that make the most of workers’ potential.

“This stems from a long history of underinvestment in people, firms, and public investment,” said Rogier Van den Brink, World Bank Philippines lead economist for poverty reduction. He was speaking at a press conference following the release of the lender’s East Asia Pacific at Work report.

As a result, rising wages in the country, due to yearly hikes in minimum wage mandated by law, have outpaced the increase in the average productivity of workers.

The average minimum wage, relative to the value added per worker, exceeds the level in 90 percent of countries in the world, the World Bank said. Van den Brink said this meant the country’s unskilled workers, who are the ones who earn the least, were among the least productive in the world.

Economic growth since 2001 has failed to translate into more jobs for Filipinos. For the period 2001-2011, the World Bank said, every additional 1 percentage-point increase in economic growth has resulted in a reduction of 0.22 of a percent in the country’s unemployment rate. In China and Hong Kong, the average was about 0.30 of a percent, while in Singapore, it was 0.40 of a percent, the report showed.

Van den Brink emphasized that the World Bank was not against regular increases in the law-mandated minimum wage. But if the government wants private businesses to pay their employees more, these policies should be complemented by projects that aim to make every worker more productive.

“If Filipinos are given a chance to hook up with capital, they do very well. There’s nothing inherently wrong with Filipino labor. They have proven they are a competitive labor force,” World Bank Senior Economist for the Philippines Karl Kendrick Chua told reporters.