ADB sets $500-M loan to boost PH labor market
The Asian Development Bank (ADB) announced a new $500-million policy loan for the Philippine government to finance skills training programs that can improve the employability of Filipinos and increase the share of formal employment in the private sector.
In a statement on Thursday, the ADB said the fresh loan called Business and Employment Recovery Program-Subprogram 2 would equip its host country’s labor force, including vulnerable youth, with the skills needed to meet evolving industry needs.
The financing is also aimed at increasing women’s participation in the workforce via technical and vocational education and training.
Pavit Ramachandran, ADB country director for the Philippines, said that while the local job market continued to heal in the aftermath of the Covid-19 pandemic, the quality of jobs being created postcrisis remained a concern amid persistent underemployment.
“This new program addresses that need and will help in preparing Filipino workers for higher-skilled jobs such as in analytics and artificial intelligence, software development and security, and business process management,” Ramachandran said.
With the loan from ADB, the government targeted to add an average of 600,000 to 700,000 formal jobs in the private sector per year. That level of growth is expected to expand the share of private sector jobs to total employment to 51 percent from 49 percent in 2019, or before the pandemic roiled the domestic labor market.
Pandemic fallout
Other targets include skills training for 5,000 workers, such as those displaced during the health crisis, through private sector-led programs like the SkillsUpNet Philippines or similar training piloted by the government with ADB support.
The government also wanted to raise the number of job placements through public employment service offices in local government units (LGUs) across the country by 120,000 yearly, as well as expand the number of LGUs implementing the JobStart Philippines skills training program for the youth who are neither in school, holding a job or undergoing training.
The new loan—which would carry a concessional rate and better terms for the borrower compared with those that come with commercial loans—would add to the government’s debt stock that was pegged at P16.09 trillion as of end-November.
The financing was sourced from ADB’s ordinary capital resources, in regular terms, with interest to be determined in accordance with ADB’s Flexible Loan Product. The loan is payable in 15 years, including a grace period of three years.
