ADB approves $100million loan to upgrade Philippines’ TVET ecosystem

Regional TVET innovation centers that will offer higher national certificate level courses and programs will be created under the project.

The Asian Development Bank (ADB) has approved a $100 million loan to upgrade and modernize the Philippines’ technical and vocational education and training (TVET) ecosystem to make it more responsive to new labor demands from industries and equip Filipinos with skills for the future.

Through the Supporting Innovation in the Philippine Technical and Vocational Education and Training System Project, ADB will help in improving training facilities and equipment in 17 selected technology institutions across the country to transform them into industry-responsive innovation centers. It will also assist in designing new training courses, reskilling and upskilling of trainers, and strengthening the institutional capacity of the government’s Technical Education and Skills Development Authority (TESDA).

“Industries have become increasingly globalized and are now driven by technological innovations and the rising knowledge economy amid the Fourth Industrial Revolution, which in turn is creating a skills mismatch in the Philippines,” said ADB Senior Public Management Economist Sameer Khatiwada. “Automation and digitization, which have been underway even before the COVID-19 pandemic hit, are being accelerated by the pandemic shock and are raising the demand in the labor market for new expertise, such as digital and cognitive skills.”

“TVET reform has become even more urgent to raise the skills and employability of Filipino youth and returning migrant workers so they can compete for highly skilled jobs in the post-COVID-19 economy,” Mr. Khatiwada continued. “This new project addresses that need.”

One major reform area under the government’s National Employment Recovery Strategy 2021–2022—created to respond to the demand for post-pandemic jobs and livelihood—is to strengthen the link between skills training and employment. The new project will support TESDA in forging partnerships among the 17 selected TESDA technology institutions and industry associations, local government units, education institutions, and nongovernment organizations active in training and curriculum, as well as livelihood development.

Regional TVET innovation centers that will offer higher national certificate level courses and programs will be created under the project. These innovation centers and technology institutions will focus on the economic needs and labor demands of their respective provinces and priority sectors as listed in the National Technical Education and Skills Development Plan 2018–2022.

The project builds on the government’s work on revamping public employment service offices, which were supported by the ADB-financed Facilitating Youth School-to-Work Transition Program. It also complements a policy-based Post-COVID-19 Business and Employment Recovery Program being prepared for ADB funding. ADB has been supporting government programs on employment facilitation, secondary education, and youth life skills training for more than a decade now.

The project’s design incorporates findings from a Philippine TVET sector study called Technical and Vocational Education and Training in the Philippines in the Age of Industry 4.0,  prepared by ADB in close collaboration with TESDA. The study includes lessons from ADB-supported TVET projects in other countries in developing Asia.