ADB Approves $500M Loan to Support Labor Market Programs and Economic Growth in Philippines

The Business and Employment Recovery Program-Subprogram 2 is designed to help the Philippine government implement policies that will promote inclusive economic growth.


Devdiscourse News Desk | Manila | Updated: 30-01-2025 18:45 IST | Created: 30-01-2025 18:45 IST
ADB Approves $500M Loan to Support Labor Market Programs and Economic Growth in Philippines
This initiative seeks to improve the productivity and employability of Filipino workers while supporting broader reforms to create a more favorable investment environment conducive to job creation. Image Credit:

The Asian Development Bank (ADB) has approved a $500 million policy-based loan aimed at expanding the Philippine government’s labor market programs. This initiative seeks to improve the productivity and employability of Filipino workers while supporting broader reforms to create a more favorable investment environment conducive to job creation.

The Business and Employment Recovery Program-Subprogram 2 is designed to help the Philippine government implement policies that will promote inclusive economic growth. By equipping the country's labor force, especially vulnerable youth, with skills aligned to industry needs, the program focuses on technical and vocational education and training (TVET) to boost workforce participation, especially among women.

It also aims to provide better access to livelihood and employment opportunities through various government job facilitation programs, ensuring that the labor market recovery benefits a wide range of Filipinos.

“While job recovery in the Philippines has been encouraging in the post-COVID-19 period, the quality of jobs remains a critical concern, with many workers still facing challenges such as underemployment, informality, and limited access to decent work opportunities,” said Pavit Ramachandran, ADB Country Director for the Philippines. “This new program addresses that need and will help in preparing Filipino workers for higher-skilled jobs in industries like analytics, artificial intelligence, software development, and business process management, where Filipinos have shown a proven potential to excel.”

Key Targets and Expected Outcomes

The government, with ADB’s support, has set ambitious targets under the program. These include:

  • Creating 600,000 to 700,000 new private sector jobs annually, increasing the share of private sector employment to 51% by the end of the program, up from 49% in 2019, before the pandemic-related job losses.
  • Training 5,000 workers, particularly those displaced during the COVID-19 pandemic, through initiatives such as SkillsUpNet Philippines, which connects private sector-led programs with workplace skills training.
  • Enhancing job placements through Public Employment Service Offices (PESOs) in local government units (LGUs), aiming for 120,000 new job placements annually.
  • Expanding the JobStart Philippines program, which provides training for youth not in education, employment, or training (NEET), by increasing the number of LGUs that implement it.

Building on Past Reforms

This new initiative builds on the successes of the Facilitating Youth School-to-Work Transition Program, which supported labor market reforms, including the institutionalization of PESOs and the JobStart Philippines program. It also complements the Supporting Innovation in the Philippine TVET System, which aims to modernize and upgrade the country's TVET institutes through the Technical Education and Skills Development Authority (TESDA).

By focusing on skills development and creating pathways to quality employment, the program positions the Philippines to make substantial progress in reducing unemployment, underemployment, and informal work, ultimately fostering a more resilient and dynamic labor market.

Long-Term Impact on Economic Growth

With a focus on both economic recovery and sustainability, the program will contribute to improving the overall business environment and creating a skilled labor force ready to take on the challenges and opportunities of the digital age and other evolving industries. It is a key part of the Philippines' long-term strategy to strengthen its economy and ensure more equitable growth for all citizens.

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