ADB $400 Million Loan Boosts Philippines' Youth Employment
MANILA, PHILIPPINES (3 December 2019) — The Asian Development Bank (ADB) has approved a $400 million policy-based loan to support the Philippine government’s efforts to reduce the number of out-of-school and unemployed young Filipinos—one of the factors impeding more inclusive growth in the country.
The Facilitating Youth School-to-Work Transition Program, subprogram 2, supports government reforms aimed at improving the employability of young Filipinos through labor market programs and providing easier access to on-the-job training schemes to help them secure and retain jobs.
The program builds on ADB’s previous support to the government’s employment initiatives, particularly the Department of Labor and Employment’s design and roll out of the Jobstart Philippines Program, a full-cycle youth employment facilitation program that has become law with adequate government funding.
“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 the Director for Public Management, Financial Sector, and Trade at ADB’s Southeast Asia Regional Department Mr. Jose Antonio Tan III. “ADB has a longstanding partnership with the Department of Labor and Employment in youth employment programs. We are committed to helping generate more job opportunities for young Filipinos.”
While some progress has been made in reducing unemployment in the country, one in five Filipinos between the ages of 15 and 24, including one-third of young Filipino women, are still not in employment, education, and training, compared with the average rate of 18% in Southeast Asia and the Pacific.
The new ADB loan supports the government’s efforts to expand and transform operations of the Public Employment Services Offices 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.
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.
“This new ADB loan seeks to address the skills mismatch between young job seekers and the competencies demanded by employers,” said ADB Southeast Asia Senior Economist for Public Finance Ms. Cristina Lozano. “It also strengthens labor regulations to provide income security and decent jobs.”
From November 2016 to March 2019—the period covered by the new ADB program , the government rolled out the Jobstart program in 35 LGUs, up from 14 LGUs in 2016, benefiting 17,537 out-of-school youth. More than two-thirds of the beneficiaries were from low-income households.
The government also introduced improvements to the Special Program for the Employment of Students, in which poor students are given access to paid short-term jobs during school breaks to boost their family’s income and help them fund their education. About 393,500 young Filipinos—59% of whom were women—benefited from the program.
In addition, an ADB technical assistance program will pilot a workplace funding scheme in 2020 to help employers implement skills upgrade initiatives in their businesses.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.