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PHL secures $400-million ADB loan to reduce youth unemployment

PHILIPPINE STAR/ MICHAEL VARCAS

THE ASIAN Development Bank (ADB) approved a $400-million (P20.14-billion) loan to expand a Philippine government program aimed at helping unemployed youth find quality jobs.

The multilateral lender gave the green light for the policy-based loan that will fund the third phase of the government’s Facilitating Youth School-to-Work Transition Program.

Under the program, the Department of Labor and Employment (DoLE) will increase the job facilitation capacity of Public Employment Services Offices (PESOs) nationwide, as well as improve workplace skills development and labor market programs.

“The pandemic has led to job losses in many sectors, especially among young people. There is an urgent need to help young Filipinos find work through innovative labor market programs and skills development initiatives,” said Jose Antonio Tan III, ADB’s director for public management, financial sector and trade in Southeast Asia, in a statement.

The ADB loan will also finance the government’s unemployment insurance scheme, the P1-billion Tulong Trabaho Scholarship Fund of Technical Education and Skills Development Authority (TESDA), and First Time Jobseekers law, which waives the fees of public documents for first-time job applicants.

“This loan will help young jobseekers, especially women, access training opportunities and enhance their skills development. It will strengthen labor market policies and provide assistance to returning Filipino workers who lost jobs overseas because of the pandemic through group livelihood and entrepreneurship programs,” ADB Principal Financial Sector Specialist for Southeast Asia Stephen Schuster said.

The Philippines’ unemployment rate soared to 18.9% at the height of the strictest lockdown in April 2020, as nearly all economic activity was halted amid the coronavirus pandemic.

As of May 2021, the country’s unemployment rate stood 7.7%, but the youth jobless rate was at 14.5%. This means there were 1.12 million young Filipinos without jobs in May.

The ADB previously extended two loans for the youth employment program — a $400-million loan in 2019 and $300-million loan in 2017. These loans supported DoLE’s flagship JobStart Philippines program, which provided young Filipinos from poor families with job skills training.

The previous loans also helped establish PESOs, a facility by local government units installed across the country to assist job seekers and promote existing programs.

Moving forward, ADB said it is also working on another assistance package for the Philippine labor market next year, which includes a technical and vocational education and training project and a post-pandemic employment recovery program.

The bank is planning to lend the government $3.9 billion this year. — B.M.Laforga

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