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  March 20, 2013: Mismatch aggravates our unemployment problem

Our large pool of English-fluent and skilled workers has often been cited as one of the fundamental strengths of the Philippine economy, which should make it attractive to investors.
I believe this is a major factor behind the success of the business process outsourcing (BPO) industry, particularly call centers, in which the Philippines is now recognized as No. 1 in the world. And the continuing deployment of Filipino workers overseas, estimated at about 10 million, is another proof that even foreign employers prefer Filipinos for their manpower needs.
So, why do we have an unemployment problem? The National Statistics Office (NSO) placed the official unemployment rate at 6.8 percent as of October 2012 (up from 6.4 percent in October, 2011), which translates to 2.8 million people. The Third Quarter 2012 Social Weather Survey, fielded over August 24-27, 2012, found adult joblessness at 29.4 percent, or an estimated 11.7 million people, up from 26.6 percent (about 10.9 million people) in May, 2012.
And the World Bank estimates that some 10 million Filipinos are either unemployed or underemployed. With more than one million Filipinos joining the labor force each year, the country needs around 14.6 million jobs until 2016.
Our colleges and universities produce about half a million degree holders every year, yet companies still find it difficult to hire people. In the BPO industry, for example, reports say only one out of every 10 applicants are hired. Majority fail to meet the prospective employers’ qualification requirements, and the industry has expressed concern that, if left unchecked, the situation may lead to a shortfall of qualified employees, which in turn will affect the industry’s growth as well as its contribution to job generation.
We are confronted with a paradox. We are producing many graduates who are ready to work, and yet employers are not able to find the workers that they need.
I believe the problem is a mismatch between the kinds of graduates we are producing and the manpower requirements of employers. We are pursuing the development of the mining industry, for example, but we don’t have enough mining engineers.
The real estate is booming, but we are running short of civil engineers. We are even losing the few civil engineers that we have to foreign employers, such as those in the Middle East. And we have 200,000 nursing graduates per year, but there are only 2,500 nursing jobs available locally, and opportunities overseas are limited, partly because of stringent requirements imposed by other countries.
In my view, the problem can be traced to education, specifically to the courses offered by our schools. So, there should be a careful study on what courses are needed in the near future and our colleges and universities should be flexible enough to change their course offerings to match these needs. Such a study must also take into account the types of jobs that will be in demand overseas because we cannot stop our graduates from seeking employment abroad. This is one way of minimizing the impact of brain drain on our economy.
I have learned that the Commission on Higher Education (CHED) imposed a moratorium on the opening of new programs in business administration, nursing, teacher education, hotel and restaurant management, and information technology education, effective school year 2011-2012.
Labor and Employment Secretary Rosalinda Baldoz said in a statement that the moratorium would “mitigate the potential oversupply of graduates in certain disciplines, and in the process, to encourage incoming students to opt for courses that offer the best chances of employment after graduation.”
I believe it’s a step in the right direction. It should help solve the mismatch between the kind of graduates we are producing and the kind of workers the employers are looking for.

Source: Manila Bulletin - March 20, 2013

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