Labor market efficiency needs to be improved

The country must have an efficient labor market to improve its competitiveness, address employment concerns and fight poverty, Economic Planning Secretary Arsenio Balisacan said Wednesday in a speech during the opening of the 2012 National Productivity Convention.

Balisacan said better and sustained competitiveness was key to rapid and inclusive growth, which was the goal of the Philippine Development Plan 2011-2016.

The Philippines ranked 65th out of 144 countries included in this year’s World Economic Forum (WEF) Global Competitiveness Index, up 10 notches from last year. Among the 12 pillars of competitiveness, the country got the lowest rank in labor market efficiency at No. 103.

According to WEF, the efficiency and flexibility of the labor market is important in ensuring that “workers are allocated to their most effective use in the economy and provided with incentives to achieve maximum productivity.”

“The factor that continues to pull down our ranking is labor market efficiency. The challenge is to be able to improve on this but not at the expense of ensuring decent work and social protection for all,” Balisacan said.

“Labor market efficiency and decency of work need not be at odds if labor productivity is high,” he added.

Balisacan said the government would continue to invest in necessary public inputs and create an environment that would encourage private investment to increase labor productivity.

“By these, we mean investing in health and education, skills training, technology and innovation, infrastructure, as well as promoting structural economic transformation that permits the generation of high-quality employment in the dynamic sectors of our economy,” he said.

Balisacan also sought the help of the business and labor sectors in crafting policies and programs aimed at improving labor market efficiency.

“We know our desired outcomes—high labor productivity and decent work for all. If we are able to attain these, then we will have achieved our goal of a rapid, sustained and inclusive growth,” he said.