E C O N O M Y R E P O R T Republic of the Philippines

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1 APECForumonHumanResourceDevelopment SustainableCareerDevelopmentThroughoutWorkingLife 14 16November2007Chiba,Japan ECONOMYREPORT RepublicofthePhilippines By Ma.CelesteM.Valderrama DirectorIII DepartmentofLaborandEmployment I. Introduction 1. Thispaperintendstoprovideareportonsustainablecareerdevelopmentin thephilippinesasitrelatestopeoplewhohavealreadycommencedlong termsustainableworkinglife. 2. Following the outline given, the presentation will be as follows: a) Idea, strategyandbasicpolicyforcareerdevelopmentorcareersupportinthe Philippines; b) current status and tasks; and c) public support and issues thatneedstobeaddressed. II. Idea,strategyandbasicpolicyforcareerdevelopmentorcareersupportinthe Philippines 1. HumancapitalisthesinglebiggestcompetitiveedgeofthePhilippinesand is expected to sustain and propel the country s competitiveness. 1 As a developing country, the Government of the Philippines (GOP) recognizes theimportanceofhumanresourcedevelopmentincreatingandsustaining growthanddevelopment. 2. This is clearly expressed in the country s policy, strategies and programs, particularly in at least five (5) policy and strategic planning instruments, namely: the Labor Code; the Philippine Medium Term Philippine DevelopmentPlan(MTPDP) ;theNationalActionPlantoAchieve Education for all by 2015; and the National Technical Education Skills Development Plan (NTESDP) According to the Labor Code of the Philippines, the State shall promote and maintain a state of full employment through improvedmanpowertraining,allocationandutilization. 1 /National Competitiveness Summit,

2 2.2 The law creating the Technical Education and Skills Development Authority also states that the State shall encourage active participation of various concerned sectors particularly private enterprisesbeingdirectparticipantsintheimmediatebeneficiaries of a trained and skilled workforce in providing technical education andskillsdevelopmentopportunities. 2.3 TheMediumTermPhilippineDevelopmentPlan: states that the workers are the country s competitive advantage. To harness and sustain this edge, the Plan emphasized the need to adopt educational, training and technicalvocational programs that willmakelaborsupplyelastic,i.e.,responsivetothechanginglabor marketrequirements. Chapter 9 (on Labor) of the Plan outlines the four (4) key employmentstrategies:1)employmentgeneration,2)employment preservation, 3) employment enhancement and 4) employment facilitation.employmentgenerationrefertojobcreationmeasures, while employment preservation involves harmonious workers employer relationships (mostly labor relations programs). Employment enhancement, in particular, prescribes measures to advancethequalityofworklifeofworkersintermsofcompetency building, productivity, work values, work conditions and occupationalsafetyandhealthwhileemploymentfacilitationarejob matchingandlabormarketinformationservices. 2.2 Underthecountry snationalactionplantoachieveeducationfor allbyyear2015,everychild,youthandadulthasthehumanrightto benefit from education that will meet the basic learning needs including the full development of human personality. Functional literacymeanshavingthecompleterangeofskillsandcompetencies cognitive, affective, and behaviour which enables individuals to liveandworkashumanpersons,developtheirpotentials,andmake criticalandinformeddecisions,andfunctioneffectivelyinsociety. 2.3 Under thenational Technical Education Skills Development Plan (NTESDP) , the country shall develop a globally competentfilipinoworkforcethruthefollowing: Decent and Productive Employment, which includes not only accessibility to employment opportunity but also to continue enhancementofcompetenciesthroughbuildingupofcapability for skills training. Industry and employers shall support this process by pursuing workplacebased HRD programs for their employees. 2

3 III. Quality TVET provision, which is implemented by enforcing qualitystandardsonlearningsystems,processesandprocedures amongtvetproviders. DemanddrivenTVET,whichmeansthattrainingprogramsshall be based on timely and adequate labor market information especiallyinhighdemandandshortagecategories. 3. Consistent with these, the concept of sustainable career development is related to activities that continuously enhance the competencies of an individualleadingtohiscareergrowth.itispremisedthatindividualswith sustained career growth are productive individuals, and productive individualscontributetoeconomicdevelopmentofthenation. 4. Thecareersupportmeasuresmaybeintheformofworkforcetrainingand skill development, education, work redesign or job enhancement, on the job training and apprenticeship, labor market information and public employment services, and corresponding policy and program support. Theseareprovidedbypublic,privateandeducationalinstitutions. Currentstatusofcareerdevelopmentandcurrenttasks Situationer 1. ThePhilippineshasaworkforceof36.4million,comprisingof33.5million employedand2.8millionunemployed Of the employed, onehalf can be found in the services sector (50.6%) a third in agriculture (34.7%) and the rest in industry (14.8%). By class of workers, 53.4% are engaged in wageemployed, 35.1% are ownaccount workers, and 11.5% are unpaid family workers. The employed are largely male, in the prime working age (2554 years old) and relatively educated (36%attendedcollegeand26%highschoolgraduates). 3. Among the unemployed, 48% are young workers aged 1524 year olds, relativelyskilledandeducated.majorityhavepreviousjobexperienceand are inactive unemployed of which 40% were discouraged workers. Unemployment is largely an urban problem where roughly two in every threeunemployedareurbanresidents A major concern is the steadily growing number of underemployed, or thosepersonswhoexpressedthedesiretohaveadditionalhoursofworkin theirpresentjob,orinanadditionaljob,ortohaveanewjobwithlonger workinghours,whichhasdoubledfrom2.8millionin1997to4.1millionin 2 January 2007 Labor Force Survey, National Statistics Office (NSO) 3 A Closer Look at the Filipino Workforce, Bureau of Labor and Employment Statistics, Department of Labor and Employment 3

4 The profile is alarming because they comprise less educated employees,unskilledworkersinagriculturesector,andintheirprimeage (25to54yearsold). 5. Meanwhile, overseas employment has significantly expanded, from a modest14,366annualdeploymentin1972ithasgrownto1millionannual deployment in During the 30year period, deployment of overseas Filipino workers posted a shift in skill demand from lowend occupations (production workers) to highend occupations (professional workers). The medianageoffilipinosworkingabroadin2004belongedtotheagebracket 2534 years old (40.3%) with 3544 years old (30.1%) ranking next. 5 This well suggests that many of them are career shifters (with previous work experience)andthatoverseasemploymenthasbecomeaclearcareergoal. 6. The country s workplace has been changing. According to the Bureau of LaborandEmploymentStatistics 6,between period,theshareof agricultural workforce shrunk from 45.2% to 37.4% in favour of service sectoremploymentwhichexpandedfrom39.8%to46.6%.inthenextten years,servicesectoremploymentwillexpandanddominatethenatureof workasrapidtechnologicalinnovationsininformationandcommunication continue to transform the structure and nature of many jobs. Another changethatistakingplaceistheincreasing casualization oftheworkforce asmoreandmoreemployersareresortingtolaborflexibilityarrangements (suchassubcontracting)tocompeteinthemarket. Concernsandmeasuresattheindividuallevel 7. On the individual level, the concern for career development is apparent among:a)theemployedastheyconfrontdrasticallychangingrequirements brought about by technology, and changing workplaces; b) the young people who, after commencing work usually as nonregular worker, generallyfindtheschoollearntskillsinadequateandtheirexpectationtobe in one job throughout their worklife is unmet; c) the large chunk of underemployed persons who desire to earn more or work more; d) the informal sector workers whose number is constantly growing; and e) the manymidcareerprofessionalswhoareluredbyhighpayingoverseasjob andagrowingdemandforprofessionalworkersoverseas. 8. Asindividualworkersstrivetoachievemoreintermsofpower/authority, financial security or personal fulfilment, career development meant pursuinghighereducation,asecondbachelor sdegreeoranothertechvoc course that are highly indemand. For instance, there are a number of 4 The Underemployment Phenomenon, Labstat Updates, Vol. 10 No. 4, Bureau of Labor and Employment Statistics 5 Measuring the Economic Gains from Global Migration the Philippine Experience, Labstat Updates Vol 10 No.28, Bureau of Labor and Employment Statistics 6 The Changing Demographics of the Philippine Workforce: Trends and Challenges, Labstat Updates Vol. 10 No. 17, Bureau of Labor and Employment Statistics 4

5 Filipino professionals who work on their nursing and education degree duringeveningorweekendstoshifttoahighpayingnursingorteachingjob abroad.forthosewantingtobecomeentrepreneurs,workersavailofthe numerous livelihood seminars, selfhelp learning kits and business counselling support from community based schools and nonprofit organizations.fortheunskilledandloweducatedworkers,however,career growthisusuallydifficultbecauseofinadequatequalificationsandlackof fundstofinancefurtherskillstrainingoreducation. Concernsandsupportmeasuresattheenterpriselevel 9. Ontheenterprise(orcompany)level,theconcernforcareerdevelopment is mainly about: a) securing and retaining the best talents that can bring about the desired productivity edge of the business; b) filling up existing and future vacancies that are indemand and hardto fill; c) filling up vacanciesleftbytrainedworkerswhomovedtootherjobs;andd)investing on and retaining their trained people who invariably are pirated by competitorsoroverseasemployer. 7 Companies(andcountries)nowwage war on talents: they are willing to pay a good prize for, or invest on top performingandcriticalskillworkers.andprizedtalentsarethosewhodo notonlypossesshardbutalsosoftskillssuchasinnovation,communication, human relations, and problem solving which are acquired through continuouslearning,education,andexposuretovariousbusinesses. 10. Employers train their employees and provide career development, performancemanagementandrewardssystemtokeeptheirbestworkers. Inastudyamong488companiesthatbelongtothetop5,000enterprisesin the Philippines, it was found that next to incentive pay the provision of training ranked second in importance as reported by 26.8% of the respondents.training(inductionandojt)servedasanavenuetoacquire new talents or skills which are intended to prepare good performers for career advancement in the company. In some respondents, training is carriedoutthroughtheircareerdevelopmentorsuccessionplan Today,oneofthemostvibrantsectorsintermsofemploymentandHRDis the outsourcing industry. The country s Commission on Information and Communication Technology expects 40,000 career shifters going to this industry from 2006 until Career shifters from different fields of professions enrolled themselves in the call center because of career and skillbuildingopportunities,incomepackage,thereisnoagelimit,andthe screeningprocessissystematicandquick.callcenterareknowntoprovide amonthlongtrainingwithpaytonewhiresbeforetheyareallowedtotake calls.othercompanieswithcriticalskillsandthosewhoparticipateindual 7 The National Human Resource Conference Outputs, Department of Labor and Employment 8 Survey of Hot Jobs in Top Enterprises in Metro Manila, Labstat Updates Vol. 11 No. 13, Bureau of Labor and Employment Statistics 9 Outsourcing the first choice of career shifters in the Philippines, Roberto L. Bacasong, Unique Interaction Inc. 5

6 IV. technology training (e.g., aviation) provide intensive OJT and incompany skillbuilding for their employees to attract and retain them. To protect theirinvestmentonpeople,theprivatesectoradvancedtheideaoftraining tiedupwithcontractorserviceobligation. 12. Muchofthetrainingisdonebylargecompanieswhich,however,comprise only0.4%ofthetotalestablishmentsinthecountry.smalltomediumsized companies(8.6%)andmicroenterprises(91%)maynothavethebudgetto implement an equally sophisticated training support program for their employees. It can be surmised that majority of employees acquired skills and knowledge by apprenticeship, having ownersasmentors and self learning;orpursuedselfinitiatedcareerdevelopmentactivities.thereisa needtoexpandandimproveincompanytrainingacrossallenterprises. Current status of public support for the development of sustainable careers throughouttheirentireworkinglifeandcurrentproblems 1. Atthenationallevel,thedrivingforcesfordevelopingcareerdevelopment measuresforworkingpeopleinthephilippinesaresummedupasfollows. 1.1 Reducing jobsskill mismatch. The goal of generating jobs for the Filipinos remains to be at the core of the government s development agenda. While jobs continue to be created by the economy, unemployment and underemployment remains a major concern the culprit being the skills and job mismatch. There is a greater need for employerinvolvementineducation,trainingandcareerdevelopment. 1.2 Increasingcompetitiveness.ThePhilippineshastodoubleitseffortsto rise from its current ranking (49 th out of 61 countries) in world competitiveness. 10 To become competitive, its workforce should be globally competitive, gainfully employed, productive, secure, healthy andsafe. 1.3 Upgrading skills in growth sectors. As the size and contribution to outputandemploymentoftheservicesectorincrease,thedevelopment of workforce for this sector should correspondingly be raised. Managementsystems,whichincludecareerdevelopmentprogramsfor employees,shouldbesecuredtoenableorganizationstoachievehigher productivity. 1.4 Continuing education and training. Technology, globalized business systemsandflatteningorganizationalstructuresaredefinitedriversof change in the workplace. Workers have to acquire skills in using electronic and technologybased tools, equipments and machineries, andtodevelopgeneralcompetenciesthatwillallowthemtomoveup 10 Philippine Competitiveness Score Card, 2006 World Competitiveness Yearbook by the Institute for Management Development 6

7 or laterally whether within, inter or intraorganizational borders. Flexible employment arrangements have brought about shortterm employment and irregular workers often find themselves in search of new jobs after 6month. Workers, thus, have to continuously retool themselves and plan for their next job, or risk the prospect of being unemployedaftertheirlastjob. 2. To address the listed HR issues, the following are some of the measures implementedbythephilippinegovernmenttosupportcareerdevelopment ofworkers Supportmeasure 2.1 ThePGMATrainingforWorkScholarshipProgram.The2006National Manpower Summit, which convened key players to identify the key employment generating sectors and indemand skills, pointed out the urgentconcernofdeveloping,influencingorredirectingcareerchoices ofthecountry sworkforcetofilltheidentifiedoccupations. Because any delay may cause economic and job opportunity losses (such as in Business Process Outsourcing and Aviation), the government s Technical Education and Skills Development Authority (TESDA)launchedthePGMATrainingforWorkScholarshipProgramand allottedap500millionfundpackagetoprovide100,000fullorpartial scholarship grants to high school graduates, employed persons but readyforacareerchange,theunderemployedorunemployedwillingto undergo training in areas with critical skills. This includes Business Process Outsourcing industry (call center agents, medical/ legal transcriptionists, animators, software developers), aviation, mining, medicaltourism,hotelandrestaurant,agribusinessandservices. 11 The assistance is also open to returning OFWs who would like to consider local employment as their next career, differentlyabled persons and workerswhoseemploymentareterminatedduetocompanyclosureor retrenchment.becausethisisatrainingsubsidy,theassistanceprovides substantialaccesstotechnicalskilleducationandtrainingamonglow incomeworkersorfamilies. Skilldevelopmentinfrastructure. 2.2 Ladderized interface between TechnicalVocational Education and Training and Higher Education. To allow workers career mobility and development thru increased competence and qualification, the government launched a new system of education that harmonizes technicalvocationaleducationwithcollegeeducation. 11 PGMA Training for Work Scholarship, Technical Education and Skills Development Authority, July

8 The ladderized system enables workers to enter and exit the educational system while at the same time acquire the skills and competence needed to ascend and reach successively higher job platforms.ateachjobplatform,techvocgraduatescanalreadylandan entrypoint job. Should the worker desire to go up the organizational ladder or move to a better paying job but one which requires college education,hecanalreadypayhiswaytocollegeeducationandreenter the educational system bringing with him one s previous techvoc learningwhichwillearnhimcreditunitsforthecollegedegreeprogram. Thesystemrequiresasystemofaccreditationofprovidersandcourses inaccordancewiththeunifiedtrainingandaccreditationsystem.the TESDAandCommissiononHigherEducation(CHED)isimplementingthe mechanisms for school year in selected training and educationalinstitutions.themodalitiesinclude:a)credittransfer the recognition and carrying forward of credits constituting overlapping learning from a techvoc program to a degree program or vice versa; andb)embeddedtechvocqualificationinaladderizeddegreeprogram the recognition and restructuring of curriculum to provide techvoc entryandexitpoints. 2.3 Onlinetechvoceducationandcommunitybasedtrainingcenters.To allowworkers,especiallythoseinfarflungareasaccesstoskillstraining and education, government provides distance education (online) and implements communitybased training. Local Government Units have setup their respective community training centers where adult education/skillstrainingaregivenforfreeoratlowcost,whicharealso offered during afteroffice hours and weekends. The online techvoc courseisatitsinitialofferingstage,withblendedscheme(onlineplus face to face session) where appropriate. Trainees avail of the service thruatrainingvoucherwhichtheycanusetoaccessinternetservicein an accredited internet café (Netopia) for free. Because it is ebased, workingpeoplewhoarecomputerliteratecaneasilyaccesstrainingto supporttheircareerdevelopmentplan. 2.4 ThePublicEmploymentServiceOfficeNetworkandcomputerizedjob matchingfacility.insupportofcareerdevelopment,jobinformationis made available so that those seeking employment outside of their companies may know where the jobs are. There are presently 1,300 Public Employment Service Offices at city/ municipal/ provincial levels that make free employment counselling accessible to every worker. A computerized jobmatching facility (PhilJobNet) expands further workers access to vacancies and enables companies to search them when they so register in the system. The system has on the average 50,000listedvacanciesatanygiventime.Ontheotherhand,overseas employment facilitation services are also extended by the Philippine Overseas Employment Administration to those wanting to make a careershifttowardsjoboverseas. 8

9 PolicyandProgramsupport 2.5 The National Human Resource Conference. To allow greater sectoral involvement in workforce development efforts, the country held the veryfirstnationalhumanconference(nhrc)inapril2007toassessthe availability and quality of the nation s human resource supply, and identify the appropriate intervention that will propel and sustain the country scompetitivenessandproductivity.itisafollowupactivityto the National Manpower Summit held in 2006 that identified at least nine(9)priorityemploymentsectors.theconferencegatheredaround 100 participants from labor groups, employer groups, government agencies,schools,nongovernmentagencies,andotherstakeholdersto raise their respective concerns on three areas: labor relations, human relations and education and training. The conference generated an action agenda that would support the country s workforce strategies alongtheseareas,amongwhich(astheserelatetocareerdevelopment measures) are the increased investment of the private sector on in company trainings, greater involvement of companies in OJT, apprenticeship and dualtraining partnerships, and development of recruitmentethics. 3. Sometasksremaintobedone,however. 3.1 As there is no regular data on the scope of career development measuresinitiatedorimplementedbytheprivatesector,includingtheir investmentcost, a survey may beundertakento assess this especially amongthesmallandmediumsizedenterprises.infact,thebureauof Labor and Employment (BLES) has recently included a set of rider questionsintheirintegratedsurveyamongestablishmentsthatinquire into the extent and nature of HRD activities/ programs in companies, particularlyasitsupportthethrustongoodhumanrelationspractices. 3.2 Becausetheskillandjobmismatchremain,governmentshallcontinue consultationanddialoguetostrengthenitspartnershipwiththeprivate sectorinimplementingincompanycareerdevelopmentprograms,and continuetolinktheeducation/trainingsectorwiththeindustrysothat increasingly the curriculum will be responsive to the emerging competencyrequirements. 3.3 Asthereisalargeworkforcepopulationtoreachoutto,publicsupport should continue to expand the use of technology in offering career supportactivitiesandinwideningtheaccessofworkerstolabormarket information. It should also develop selfhelp handbooks for career shifters which can guide them in looking, applying and succeeding in their next position, job or career; develop the competence of Public Employment Service Officers as career counsellors; and work with 9

10 employergroupsindevelopingthecompetenceofhrmanagers/staff ascareercounsellorsaswell. 4 Current Status of career development for those in the informal sector, and current tasks 4.1 As the career development concerns of the underemployed are generallycoveredinthepreviousdiscussion,thisportionshallfocuson informal sector workers. Informal sector is comprised around 44.6% (14.6 million) selfemployed and unpaid family workers. The self employedarelargelymale,intheprimeworkingage(2554yearsold) andwithloweducationalattainment aboutonehalfonlyelementary andmorethanonethirdwithsecondaryeducation.majorityarehead ofthefamilyandengagedinparttimeemployment. 4.2 Careersupportmeasurescomeintheformoflivelihoodskillstraining and provision of package of assistance (capital, marketing, and packaging) that would help them transition from unemployed or underemployed to being productively employed. Businesscounselors from the private sector (e.g., Go Negosyo) also proactively extend service thru continuing advocacy and motivation on entrepreneurial development. Government provides quick response assistance to workersdisplaced(duetoclosureorretrenchment).moreover,techvoc training,scholarships,assessmentandcertificationservicesareavailable yearroundtoall,includingworkersintheagriculturesectorwhowish to shift to the service industry. The support requirement, however, is hugeastheinformalsectorcontinuestoexpandandthetaskathandis todevelopmorestrategicmeasuresthatwillsustainworker sinterestto identify,plan,findandgrowintheirchosenoccupationoremployment. Closingstatement Discussing, sharing and learning in this forum the issues, status and tasks career development measures for working people is very timely and relevant to the Philippine economy as it continues to pursue its workforce development strategies that will bring aboutsustainableeconomicgrowthtothenationanditspeople. 10