It is time to build new job market for the new normal

We need not focus on recovery alone. Investment in skills development is a must

Artwork by Tristan Yuvienco

(This article is lifted from the book, MOMEN2M More Reforms for Economic Growth, published in 2021 and is a compilation of articles by the author, Calixto Chikiamco, Romeo Bernardo, Ramon Clarete, Emmanuel de Dios and Raul Fabella, edited by Roel Landingin, with foreword by Benjamin Diokno. For book availability, see links at the end of the story.)

MARCH 29, 2021—At the close of 2019, in what seems to be a lifetime ago, the Philippines was one of the most dynamic economies in the Asia-Pacific region. With increasing urbanization, a large and young population, and a growing middle class, the vibrant labor market was supported by strong consumer demand. Both the unemployment and underemployment rates were at their lowest in contemporary history, at 5.3% and 14.8%, respectively. The spread of the contagious coronavirus disease (COVID-19) in 2020, however, led to an economic and labor market shock affecting not only the production of goods and services but also consumption and demand. Businesses of all sizes faced serious challenges and while the Philippine government deployed wage subsidy schemes to minimize job losses, most micro, small, and medium enterprises’ (MSMEs) liquidity plummeted. Travel bans, quarantine restrictions, and costly sanitation measures as well as the loss of purchasing public due to the growing environment of uncertainty and fear led most firms to delay the hiring of workers, or worse, retrench their employees. As of January 2021, an estimated 17.6% of Filipinos were unemployed and without any source of income.

Even before COVID-19 accelerated the demise of archaic institutions and traditional ways of doing work, the fourth technological revolution has likewise challenged the Philippines’ reliance on industrialization and its capacity to generate high-paying jobs as a path towards economic growth. The Philippine labor market, now more than ever, is in need of investment in training, skills, and support to help displaced workers transition into new and even better jobs.

It is time to build a new job market for the new normal.

Policy reform need not focus just on recovery alone. The Philippines needs a better labor market: an inclusive and sustainable one with a view towards the low-paid workers, young and inexperienced graduates, women, ethnic minorities, self-employed, informal, and fixed-term workers. The following strategies can be deployed as the Philippines needs a “whole of society” approach in combining quick-acting measures with lasting solutions involving government workers, private enterprises, and taxpayers.

Firstly, investment in skills development is a must—either in terms of reskilling, upskilling, and training in highly technical and soft skills. Current initiatives in Congress—such as the reforms in the Apprenticeship Program and “21st Century Skills Act” or House Bill No. 7671 by Albay Representative Joey Salceda—are good platforms in bridging the skills gap of Filipino workers to match the increasingly modernizing and technical labor demands. These programs need not be targeted at new entrants in the labor market only, but due to the layoffs caused by the economic effects of COVID-19, expanded to include the unemployed and underemployed. Government should invest in apprenticeship training, either in terms of reducing on-site training cost, providing incentives to companies that embark on upskilling programs, or employment facilitation to support those who cannot be hired by employers or looking to transition to new jobs.

There is need to strengthen unemployment insurance while employees transition to new jobs

Secondly, there is a need to strengthen unemployment insurance to improve income security while employees transition to new jobs or train to acquire new skill sets. Marikina Representative Stella Quimbo’s House Bill No. 7028 or the “PhilJobs Act of 2020” can aid in providing a cushion of, at most, three months’ salary payments to an employee to provide subsistence during job search or a training allowance during the upskilling or reskilling period. Tripartite dialogue measures should also be conducted to include and improve on the portability of pension benefits for retiring employees.

Finally, and similar to the business stimulus granted by Vietnam, the government can set up local economic zones called “Special Employment and Recovery Zones” to be placed in labor-intensive, relatively low-skilled plants in high-density and/or high-unemployment areas. Major features of these special recovery zones would be fiscal incentives for employers to invest in, or borrow loans from the government to set up, new enterprises within the zone, provide for flexible wages and tenure arrangements based on competency programs or certifications, with health and labor standards to be overseen by a zone commissioner. If pilot zones prove successful in generating investment and employment, nationwide deployment and labor reforms can be the next step.

The COVID-19 pandemic has rewritten institutional and social narratives; it is also time we rewrote our economic and policy models. While the current economic downturn has gutted obsolete and nonessential industries, it is time to usher in new labor markets for the new normal and not by ignoring structural inequalities but by forming an inclusive and sustainable skills market by “building back better”.

MOMEN2M More Reforms for Economic Growth is available through:




About author


She is a trade and technology lawyer (@legalgorithm), the managing partner of Abad Alcantara and Associates ( and a member of the board of the Foundation For Economic Freedom. She is a graduate of the Ateneo de Manila University with a Bachelor of Arts in Interdisciplinary Studies (2002) and Juris Doctor of Law (2006). She is a staunch advocate of inclusive economic growth and sustainable development through free trade, gender mainstreaming and innovation exchange.

Sign up for our Newsletter

Sign up for’s Weekly Digest and get the best of, tailored for you.

Leave a Reply

Your email address will not be published. Required fields are marked *