INTRODUCTION

Winning the war against poverty remains to be the most daunting challenge of the Administration of President Gloria Macapagal-Arroyo. At the core of poverty in the country is joblessness. People without jobs and without sources of income will remain poor unless they are given the opportunity to get out of the shackle of poverty. The creation of six to ten million jobs in the next six years which is at the forefront of the development agenda of the President is a strategic response to this challenge.

The MTPDP, 2004-2010 indicates that with the domestic economy growing by at least 7 percent, total job generation is expected to reach 9.7 to 11.5 million by 2010. This accounts for an average 1.4 to 1.6 million new jobs every year. Most jobs will be created in the services sector at 5.8 to 7 million or about 60 percent of total job generation. The agriculture sector comes next and is expected to create 2 to 2.3 million jobs with the development of 2 million hectares of agri-business lands. Industry is expected to create 1.9 to 2.2 million jobs.

See Annex Table1. Medium-Term Macro Economic Targets and Table 2. Medium-Term Philippine Development Priority Sectors: 2004-2010).

Based on agency programs and estimates, tourism is expected to create 3 million; agribusiness 2.8 million; housing 1 million; ICT 0.8 million; exports 0.7 million; and mining 0.2 million. The realization of these employment projections from the different sectors is expected to contribute to bringing down unemployment in the country which is targeted to be at 8.9 percent by 2010, 3.2 percent lower than the 2004 level of 12.1 percent.

As of October 2005, employment increased to 32.9 million from 31.7 million registered in the same period in 2004. Statistics also show that employment grew across all three sectors of the economy: services, agriculture and industry. The highest employment growth is registered by the services sector reaching 739,000, followed by agriculture with 390,000, and industry with 6,000.

Despite marked improvement in employment and the prospects of generating more jobs, challenges remain but opportunities are likewise available. It is noted that unemployment rate is still significant at 10.3 percent as of October 2005. The bulk of unemployed is among the youth in the age bracket 15- 24 years old, accounting for 48 percent of the total unemployed. Majority of the unemployed in this age group (42.6 percent) have at least high school education. They are unskilled, inexperienced, and naturally, unemployable. With the magnitude of unemployed placed at about 3.8 million, this is translated into more than 1.8 million youth without jobs and without proper education. On the other hand, about 34 percent of the unemployed in this age bracket are those who have reached college levels. This is approximately 600 thousand educated people not finding employment. Based on statistics, the incidence of unemployment tends to increase with the years of education. In 2002, only 6.7 percent of those with at least elementary education are unemployed; 13.2 percent, with at least high school education; and 15.4 percent with college education. This is an indication of oureducatedunemployment problem.

This situation is an indication of structural unemployment problem. This is a result of: first, skills mismatch between the requirements of the available jobs and the skills possessed of those seeking employment; second, geographic mismatch between locations of job opening and job seekers; and third, not having the right quality and right quantity of manpower at the right time This kind of distortion is highly evident in the Philippine labor market. There exist labor supply-demand gaps. While shortages of skills are pronounced in certain occupations and areas in the country, oversupply of other skills are likewise observed. Therefore, a surplus and shortage of manpower exist at the same time.

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