ADB Study Calls for Skills Training Reform in the Philippines

News Release | 23 March 2021

MANILA, PHILIPPINES (23 March 2021) — The Philippines should reform its technical and vocational education and training (TVET) system to meet fast-changing industry needs, a new Asian Development Bank (ADB) study recommends.

The study, Technical and Vocational Education and Training in the Philippines in the Age of Industry 4.0, was carried out at the request of the country’s Technical Education and Skills Development Authority (TESDA). It looks at the accomplishments and the challenges facing the Philippines’ skills training system as new industrial technologies, known as Industry 4.0, rapidly change the nature of work and the demand for skills.

“Industry 4.0 poses a huge challenge to developing nations like the Philippines, as they have traditionally relied on industrialization and its capacity to generate high-paying jobs as a path toward economic growth,” said ADB Vice-President Ahmed M. Saeed.

The review is especially timely as the coronavirus disease (COVID-19) continues to take a heavy toll on the Philippine labor market. More than ever, the importance of adequate and timely investment in skills—including reskilling, upskilling, and the development of strong technical and soft skills—is needed to help displaced workers transition into new jobs.

“The COVID-19 pandemic has deeply affected segments of the population that are most in need of upgrading their skills to adapt to the changing needs of the labor market,” said ADB Human and Social Development Director for Southeast Asia Ayako Inagaki. “Through much-needed investments and capacity building, the government’s technical and vocational education and training system can help shape labor market outcomes and adjust to anticipated changes to achieve its dual objective of creating a competitive workforce and helping marginalized workers.”

School disruptions and closures due to the pandemic have opened the door for TESDA to adopt nontraditional, innovative, and flexible solutions, such as online learning and digital tools. These have played a critical role in retooling and upgrading the skills of displaced workers. The state agency also responded swiftly to emerging labor market needs. It expanded access to its online programs through a partnership with the private sector and launched a plan to develop policies and programs that will help the country respond to the ongoing crisis and adjust to the changes in its wake.

The report recommends promoting skills training and education as a crucial part of the country’s labor market policies during the post-pandemic recovery and beyond. While adjustments to the system during the pandemic have been largely effective, the report also notes that there are longer-term challenges.

“There are important challenges to tackle with respect to TESDA’s organizational structure and capacity,” said ADB Social Sector Specialist Sameer Khatiwada, lead author of the study. “Although TESDA has made major achievements over the years, questions around its appropriate role, endemic resource constraints, and organizational capacity weigh on its ability to respond to Industry 4.0.”

These questions include the unsettled issue of devolution of TESDA’s direct training function. The matter has important implications for access to funding and resources, and for the ability to provide up-to-date services.

The report recommends that the government seek new and effective ways to secure industry engagement in skills training, such as anticipating skills demand, ensuring better targeting of skills training programs and greater efficiency of skills supply, limiting mismatches, and improving labor market outcomes. The report also recommends standardizing and improving workshops, equipment, and digital solutions to meet international norms.                                          

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.