PHL needs to increase spending for social protection–adb, I.L.O.

THE Philippine government must increase its investment in social protection and expand its coverage to include families and unemployed workers in preparation for the Asean Economic Community (AEC), according to the latest report released by the International Labor Organization (ILO) and Asian Development Bank (ADB).

In the report, titled “Asean Community 2015: Managing integration for better jobs and shared prosperity,” the ILO and ADB said the country only invests less than 2 percent of its gross domestic product (GDP) on social protection.

It added that social protection in the Philippines covers medical care, sickness, old age, work injury, maternity, invalidity and survivors. The only two categories not covered by social protection are unemployment and families.

“It will be important, therefore, to extend the coverage and level of benefits, especially to informal and rural workers. In the context of the AEC, social protection will play a particularly important role by compensating for the short-term loss of income in industries that lose competitive advantages,” the report stated.

The ILO and ADB said social-protection programs globally average 8.6 percent of GDP, but Asean countries like the Philippines have lower investments.

Thailand has the highest investment in social protection at 7.2 percent of GDP, while the lowest are in Lao PDR, Myanmar and the Philippines, at less than 2 percent of GDP.

“It [social protection] can facilitate access to education and skills upgrading, with impacts on the overall productivity of the work force and economic growth in the longer term, while also contributing to wider poverty-reduction goals. In addition, social protection can contribute to resilience and facilitate quick recovery in the face of natural shocks,” the report stated.

The report said that social protection is important since the working-age population of the Philippines is expected to account for 35 percent of its populace.

Further, by 2025, young Filipinos will account for more than 17 percent of the population. This is significantly higher than in Singapore and Thailand, where the youth population will account for less than 11.5 percent.

The report also said that between 2010 and 2025, the total Asean labor force will grow by some 68.2 million workers, or 22.7 percent.

Around 29.5 million of these workers will come from Indonesia, which has a youth unemployment rate of 21.6 percent, and some 15.1 million will be from the Philippines and 16.6 percent of the unemployed will be young Filipinos.

By 2025, the Philippines’s population will steadily grow to around 119.22 million from 110.4 million in 2020; 101.8 million in 2015; and 93.4 million in 2010.

The report also noted that between 1991 and 2009, the share of the working poor fell from 50 percent to 37.2 percent, but the number living on less than $2 per day rose from 11.2 million to 13 million.

“In addition, there has been an increase in both the share and the numbers of those living just above the poverty line, indicating that poverty-alleviation gains may easily be reversed by sudden shocks and instability,” the report stated.

Compared to other Asean countries, the Philippines also has one of the highest youth unemployment rates at over 15 percent, second to Indonesia, where unemployment is over 20 percent.

The report noted, however, that in terms of total unemployment rate, the Philippines has the highest level among Asean countries at over 5 percent.


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