Are Filipino Workers Ready to Face the World?

By Raymund Magno GarlitosApril 22, 2018

With the demand for skilled workers in the global economy, the Filipino workforce face a multitude of challenge

WHEN IT COMES TO efficiency and reliability, the Filipino worker is considered to be one of the best and much sought after all over the world. However, with the mechanization and digitization of industries that once involved human intervention, is the Filipino worker prepared for global competition? Will this bridge the disparity in economic wealth between the rich and the poor?

At a recent summit on the readiness of Filipino workers organized by social development organization Bayan Academy and the Technical Education Skills and Development Authority (TESDA), in partnership with J. P. Morgan Foundation Philippines, questions were raised and issues were opened to scrutiny as government officials, business organizations and civic society groups and non-governmental organizations were presented, in the form of a “Thought Leadership Exposition,” the challenges Filipino workers contend with in the face of changing global economic situations.


At the Thought Leadership Exposition forum organized by Bayan Academy, TESDA, and J. P. Morgan Foundation Philippines. From left: Patricia Anne N. Javier-Gutierrez, Executive Director, Head of Communications, Philippines, J.P. Morgan; Angelique Roux, Philippines Country Manager and Training Manager for AWARE II, Education Development Center; Dr. Eduardo Morató, Jr., Chairman and President, Bayan Academy; Susan Afan, Managing Director, ABS-CBN Lingkod Kapamilya Foundation; Gina Lopez, iLove Foundation; Joanna La’O, Senior Program Manager, Farmer Entrepreneurship Program, Jollibee Group Foundation; Marlon P. Miña, Executive Director, Philippine Chamber of Commerce and Industry, Human Resource Development Foundation, Inc.; Dr. Antonio Del Carmen, President, National ICT Confederation of the Philippines; and Cathy Yap-Yang, Anchor and Managing Editor, ABS-CBN News Channel.

Threats that Undermine Philippine Workforce
According to social development expert and professor, Dr. Eduardo A. Morato Jr., Bayan Academy’s chairman and president, who presented his paper on Philippine worker readiness, global competitiveness and social equity for inclusive growth, the Philippines is still lagging behind its neighbors because of the brain and brawn drain.
“[It] could not contain the massive exodus of workers seeking greener pastures in foreign lands, even as it confronted massive poverty, insurgency, corruption and crime at the forefront,” he explained.

He also cited a record 38.7 million workers in 2015, an increase of 6.2 million from 32.5 million in 2005. However, there is a decline of the number of workers in the sectors of agriculture, fishery and forestry, in contrast with the upsurge in the number of workers for the information technology (IT), tourism and hotel and restaurant (H&R) sectors.

“There are still a significant number of unemployed and underemployed Filipinos,” he said. “Many of them lacked the skills and good education to acquire decent jobs. Self-employed individuals in marginal livelihood pursuits and unpaid family members belong to the multitude of Filipinos being left behind.”

Furthermore, Morato noted that low-level value jobs outnumber mid-level to high-level occupations by a ratio of 70 to 30. Laborers and household workers represent 31.6 percent of the workforce at 12.2 million, he said, followed by workers from the agriculture/ fishery/ forestry workers at five million, closely followed by service workers and market sales workers at 4.9 million.

On the other hand, mid-to-high-level jobs like those held by government officials, corporate managers, supervisors and self-employed businessmen comprise only 6.1 million personnel, followed by two million licensed professionals (doctors, lawyers, accountants, etc.) and 2.1 million technical professionals (engineers, plant machine operators and assemblers and the like). They make up the rest of the Philippine work force at 30 percent.

“This makes the Philippine labor force quite vulnerable to the two-pronged threats of globalization [in which] the country is forced to compete with more productive countries [like China] and technology, which could threaten jobs with automation, mechanization and robotization,” he inferred.


From left: Arian Hassani, VP, Global Philanthropy Asia Pacific, J.P. Morgan; Usec. Zenaida Maglaya, Regional Operations Group, Department of Trade Industry; Dr. Eduardo Morató, Jr., Chairman and President, Bayan Academy; Roberto L. Panlilio, Managing Director and Senior Country Officer, J.P. Morgan; Usec. Benito Bengzon, Jr., Department of Tourism.

Potential Economic Drivers to Future Philippine Economy
Morato forecasted that major industry groups with the exception of agriculture, fishery and forestry would be employing more workers by 2022, led by construction, education, health, transport/ storage/ communication and tourism.

“Faster growth rate for the construction industry will be fueled by the massive Build, Build, Build infrastructure program of the Duterte administration, with investments of PhP 8.5 trillion between 2017 to 2022,” he said. “Education will need more teachers and administrators not just because of the natural growth in the population but also because of Senior High School. Health subsector will likewise heighten demand as the government pushes for a wider-reaching universal health care program. Transport will be buoyed by construction and housing, while foreign tourist arrivals will double from six million to 12 million by 2022.”

While there will be fewer workers in agriculture, there will be more investments coming to it, “particularly in organic farming, high value crop production and high-tech agro-processing ventures.”

Another subsector worth watching out will be the renewable energy sector, which he added may accelerate as the country reduces dependence on fossil fuels.

Employability of Filipino Graduates
Morato cited a study conducted by Aspiring Minds, which claims to be “the world’s largest and standardized employability test.”

“It sampled 60,000 students from more than 100 colleges across the different regions to take its computer adaptive test,” he explained.

The key findings revealed that about two-thirds of Philippine graduates are not employable in their sector of choice in the job economy. The rate of employability for specific jobs went as low as 3.5 percent for business analysts to as high as high as 53.53 percent for nurses, according to the study. It also revealed that those who want to work in the banking and finance services lack the required domain knowledge as per industry standard.

Mean scores for spoken English skills indicate that graduates lack the requisite competency level in fluency, pronunciation and understanding, with as high as 70 percent lacking fluency, 48 percent having poor pronunciation and 58 percent suffering basic comprehension level.

Even the employability of the country’s lucrative BPO sector are low: 21.9 percent for inbound or customer service, 14.5 percent for outbound sales and 12.24 percent for IT helpdesk.

“This is worrisome since the BPO sector has been one of the highest employers and purports to grow to 1.8 million workers by 2022,” he said. “The rather low unemployability rates will challenge the sector since there are currently only about 600,000 college graduates a year.”

While there is still that lingering stigma on technical-vocational careers among Filipinos, Morato said that more and more Filipinos now see courses like Culinary Arts, Tourism, Hotel & Restaurant Management and even factory and craft-related industries as respectable, if not lucrative, careers.

Proof of this is that the Technical-Vocational-Livelihood (TVL) track for senior high school had the most number of new Grade 11 enrollees for school year 2017-2018, according to the Department of Education.

“As the number of enrollees would translate to the expected two million in the next few years, a 36 percent TVL enrolment rate would translate to 700,000 tech-voc graduates per year by 2022. This would equal the number of college graduates which would be just above 700,000 by that time,” he said.

Job Mismatch: Fact or Fiction?
While there is a prevailing perception that there is a great mismatch between the college and technical-vocational courses taken by Filipino students and the demand for skilled workers by industry and service providers, Morato was quick to dispel this.

“There is really no substantive mismatch of the supply side with the demand side,” he said. “By and large, college and tech-voc students seem to know where the currents of the job market are flowing and they follow those currents.”
He said that on the supply side, the top five certified tech-voc graduates come from these sectors: Tourism and HRM (1.427 million), Health/ Social/ Personal Services (1.25 million), Construction/ Metals/ Engineering/ Electrical/Electronics (884,000), Automotive (424,000) and ICT/ IT-BPO (286,000).

On the demand side, the top five technical skills wanted for 2016-2022 would be: Tourism/ HRM (1.564 million); Construction/ Metals/Engineering/ Electrical/ Electronics (1.318 million) and ICT/IT-BPO (800,000), Health/Social/Personal Services (690,000) and Transport (588,000).

Rather than “job mismatch”, Morato thinks it is more of a basic problem of having inadequately run college-level educational and technical-vocational skilling programs that provide venues for training to graduates.

For example, Philippine nurses are highly employable at 53.5 percent because prior to applying for jobs here and abroad, they have training and internships, with most of them receiving no compensation at all, even before they are hired.

“Their intense on-the-job training (OJT) and long training periods after graduation raise their employability level,” he explained.

On the other hand, business administration graduates have the lowest employability, according to the study. Business courses are the most preferred collegiate course, which suggests that it business schools have become diploma mills.

“The problem is really more fundamental and basic – it is a problem of under-education, under-skilling and underdevelopment [of skilling programs by schools and companies],” Morato inferred. “Industries should offer more internships, apprenticeships and dual-training programs similar to the medical and nursing professions, but eschew the practice of exploiting employees in the name of training,” he said.

Social Enterprises Offer Alternative Progress
According to Morato, social entrepreneurship and social enterprise development are becoming more appealing nowadays for a new generation of workers.

“Socially conscious citizens want to participate in the social economy,” he explained. “Social enterprises aim to generate profits or surpluses mainly for the benefit of low income groups.”

He cited for example the case of Mondragon Corporation of Spain, which is one of the most heralded networks of global production cooperatives. Founded in the 1950s, it was started by a priest in the Basque region. It is presently the seventh largest corporation in the country, with a work force of 68,200.

All in all, the goal of both government and private sectors should be to improve on technical-vocational skilling programs and trainings by making it institutional.

“As a social investment, [it] yields very high social rates of return,” he commented. He cited the example of Bayan Academy’s partnership with J. P. Morgan, where an average of PhP 8,500 per trainee yields a social rate of return of over 1,200 percent.

“Both the government and civil society should encourage more corporations to become inclusive businesses and partner with them for a more effective social delivery system. More heads thinking and more hands helping at the difficult ground level of the economy can produce so much synergy.”