Lack of skilled labor hampers expansion of foreign firms

MANILA, Philippines - The lack of enough skilled workers is preventing foreign manufacturers in the Philippines from expanding operations, according to a ranking official of Rizal Commercial Banking Corp. (RCBC).

RCBC, which handles the accounts of several Japanese and Korean locators, said their clients are forced to trim their economic activities in the country due to a lack of skilled labor.

“Our outlook is that there are a lot of project financing in the pipeline, and we are full blast towards the activities of the (foreign) locators, but there are resources constraints,” said Michelangelo R. Aguilar, RCBC first senior vice president for corporate banking group, in an interview Friday.

Japanese locators in China are reportedly pulling out and are looking for suitable relocation areas.

The Philippine government has successfully attracted locators. State-run export processing zones are believed to be reaching a saturation point and private-run industrial estates are mushrooming.

“We have to open more locations, but we need more skilled labor,” said Aguilar.

He said that Japanese shipbuilders in Cebu were already employing more than 18,000 skilled Filipino engineers and laborers but this number of skilled manpower is not enough for expansion.

“They are forced to scale (down) their operations on the availability of skilled labor versus the strong number of orders,” said Aguilar.

Socioeconomic Planning Secretary Arsenio Balisacan said the country’s education system needs to produce graduates whose skills can benefit the manufacturing and industrial sectors.

The National Statistics Office (NSO) reported that in January 2013 alone, 608,000 people were added to the labor force from the same month last year.

The number of employed, however, increased only by 606,000, implying that around 2,000 people were added to the ranks of the unemployed.

“The rate of unemployment is very high among college graduates, which partly reflects a mismatch between what is produced by schools and what is required by the market. This also shows that there is insufficient conversation between the schools and the firms,” said Balisacan.

Government is currently looking into expanding employment opportunities in several priority sectors that include agri-business, manufacturing, tourism, information technology, business process outsourcing and management (BPO/BPM), housing, infrastructure, and logistics.

“These opportunities can be enhanced through increasing the employability of new job entrants through proper and sufficient training. But higher education institutions must also be encouraged to foster tie-ups with businesses and industries, aside from the government,” said Balisacan.