ADB lends $400M to PH to narrow young Filipinos’ skills gap

MANILA, Philippines — The Asian Development Bank (ADB) expects the percentage of youth who were not in employment, education, and training (NEET) in the Philippines to fall to 17 percent or below the regional average by 2022 with the help of a $400-million loan aimed at bridging the prevailing skills gap among young Filipinos so they will land better jobs moving forward.

The ADB Board on Tuesday approved the Facilitating Youth School-to-Work Transition Program Subprogram 2, which ADB Southeast Asia senior economist for public finance Cristina Lozano said would slash the NEET among Filipinos aged 15 to 24 by 5 percentage points three years from now from 22 percent in 2017.

Lozano noted that while the NEET among the Filipino youth declined from 25 percent in 2012, the 2017 rate remained above the average of 18 percent across Southeast Asia and the Pacific.

Youth unemployment alone in the country was at 13.4 percent to date, double the national jobless rate, Lozano added.

Youth NEET, income inequality and poverty in the Philippines remained relatively high despite the country’s robust economic growth averaging 6.3 percent from 2010 to 2018, Lozano noted, such that the government needed to address labor market gaps, including unequal access to wage employment.

ADB country director for the Philippines Kelly Bird said the policy-based loan extended by the Manila-based multilateral lender, which will serve as budgetary support for the Department of Labor and Employment’s (Dole) youth employment initiatives, will “help out-of-school youth better integrate into the labor market” to eventually “reduce income inequality and poverty.”

In particular, the loan will assist young people belonging to families making up the bottom 40 percent in income distribution, Bird said.

“Many young Filipinos today are anxious about their career prospects in a very competitive labor market. This program will enhance public employment services to help them transition from school to work,” said Jose Antonio Tan III, ADB Southeast Asia regional department director for public management, financial sector, and trade.

“The new ADB loan supports the government’s efforts to expand and transform operations of the public employment services offices (Pesos) in local government units (LGUs) across the country into more professional processes with quality standards, broaden the coverage of the Jobstart Philippines program, and introduce skills development schemes targeting specific sectors,” Tan said.

“The loan also supports labor policy reforms, such as the introduction of unemployment insurance as part of amendments to the Social Security Act and the Occupational Safety and Health Standards Act, which requires employers to comply with specific workplace standards,” Tan added.

Edited by EDV