PHL to gain 3.1M jobs from ASEAN integration – ILO, ADB study

The Philippines stands to generate up to 3.1 million additional jobs when the ASEAN economic integration takes place starting 2015, according to a joint study by the International Labor Organization (ILO) and the Asian Development Bank (ADB) released Wednesday.

 

During the launching of the study, dubbed “ASEAN Community 2015: Managing Integration for better jobs and shared prosperity,” ILO country director Lawrence Jeff Johnson said the Philippines as part of the ASEAN Economic Community (AEC) could be advantageous, especially in terms of jobs – but only if “decisive” labor and social policies are implemented.

 

"If decisive policy action is taken, AEC has the potential to ensure sustained economic growth centered on decent and productive work – thus, help the Philippines achieve its goal of inclusive growth that creates jobs and reduces poverty," Johnson said.

 

The planned integration sets in motion the creation of a single market spanning the 10-nation bloc that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

 

The integration is envisioned to usher in a freer flow of goods, services, investment and skilled labor in Southeast Asia with trade barriers out of the way.

 

According to the study, the trade integration “could lead to considerable economic and job gains in the Philippines and could expand the country's gross domestic product (GDP) by 7.5 percent by 2025 compared to a baseline scenario without the integration.

 

The study also projected a net gain of 3.1 million more jobs from 2015 to 2025.

 

The study, however, noted that 38 percent of the jobs could be in vulnerable employment, with women account for just a third or 1.1 million of the expected gains.

One of the co-authors of the study, labor expert Kee Beom Kim said while the agriculture sector is among those that will have the greatest employment gains, workers in this sector, if left unassisted by the government, will be most vulnerable, especially in terms of low wages and low productivity.

 

“The challenge is to ensure higher productivity in the agriculture sector. The government should investment in higher-value crops. There should also be strong linkages between agriculture and manufacturing,” Kim said.

 

Other sectors Kim identified to gain from the regional integration in terms of employment are transportation and wholesale and retail trade.

Reversing a 20-year pattern

 

According to the study, there have been modest deindustrialization and a sharp decline in the significance of agriculture in the Philippines in the last 20 years, and the AEC is expected to slightly reverse this pattern.

 

The study projected industrial employment to increase by 17.5 percent by 2025, with construction and food processing accounting for 7.1 percent and 2.4 percent of total employment, respectively.

 

Agricultural employment is expected to increase by 29.0 percent with the AEC expected to create 1.1 million more jobs in the sector by 2025.

 

“The close association between poverty and agriculture suggests that policies directed at increasing agricultural productivity and promoting off-farm agribusiness can help ensure gains in agricultural employment translate into reductions in rural poverty,” the study said.

 

On the other hand, the study projected a decline in the overall employment share of the services sector, saying the trade and transportation subsector is poised to expand by almost 1 million more jobs.

 

The study, however, noted that productivity in this subsector is also prone to vulnerable employment.

 

“The prospect of large gains in such jobs calls for coordinated labor market policies to improve working conditions and reduce vulnerability. To this end, industrial and sectoral policies can steer the pattern of structural change towards higher value-added agro-industries and service sectors, such as the case of the business process outsourcing industry,” the study recommends. – VS GMA News