WORLD BANK SOCIAL PROTECTION POLICY NOTE September 2019 No. 19 Investing in Skills to Promote Inclusive Growth in Mindanao Pablo Acosta, Takiko Igarashi, Ruth Rodriguez, Achim Schmillen, and Arianna Zapanta I. Introduction 1. In 2015, the World Bank embarked on a collaborative effort to understand and address the jobs challenge in Mindanao through the Mindanao Jobs Report (MJR)1. Good jobs — jobs that raise real income and lift people out of poverty — were needed for more than two million Mindanawons who were either unemployed or underemployed at the time of writing. In addition, large cohorts of youth would enter the labor force in the next few years and better jobs were needed for the many Mindanawons who were currently employed informally and who accounted for more than half of total employment in Mindanao. Following extensive consultations with many of Mindanao’s leaders and stakeholders, the report came up with recommendations around the three areas, namely: (1) raising agricultural productivity and improving farm-to-market connectivity; (2) boosting human development; and (3) addressing drivers of conflict and fragility and building up institutions in Autonomous Region in Muslim Mindanao (ARMM) and conflict-affected areas (Box 1). 2. The MJR emphasized the value of looking at Mindanao island and its different subregions as a whole. The cornerstone of MJR’s development strategy is in seamlessly connecting conflict and lagging regions to growth poles, so that all of Mindanao can benefit. Addressing constraints in each area will therefore improve economic activity and job creation throughout Mindanao. At the same time, a sustained inclusive growth path for the Philippines cannot leave behind an area as significant as Mindanao, in terms of population and potential. 3. In recent years, the Philippines has grown fast, including the Mindanao island region. Recently, the Philippines has enjoyed a buoyant economy and has been among the fastest-growing economies in Asia. It achieved a solid finish in 2018 with a record of at least six percent growth for 15 consecutive quarters, the strongest economic growth since the mid-1970s (Figure 1). The upward growth trend was shared across island-groups, with Luzon growing strongest in 2018, followed equally by both The Philippine Social Protection Note series aims to disseminate Visayas and Mindanao (Figure 2). In 2018, growth in Visayas and Mindanao accelerated by 1.4 experiences, good practices, and key percentage points and 0.1 percentage point to 6.5 percent. Notably, from 7.3 percent in 2017 to findings from the Philippines on the 7.2 percent in 2018, the record growth in the conflict-affected ARMM in the previous year was topics related to social protection. It sustained. also aims to broaden the dialogue on social protection and stimulate public engagement in moving forward the policy agenda. The views expressed here are those of the authors and do 1 World Bank. 2017. Philippines Mindanao Jobs Report: A Strategy for Mindanao Regional Development (English). not necessarily reflect those of the Washington, DC: World Bank Group. World Bank. www.worldbank.org 1 Investing in Skills to Promote Inclusive Growth in Mindanao 1. Figure FigureFigure Quarterly Gross Gross 1. Quarterly 1. Quarterly Domestic Domes Gross Product, Domes tic tic Figure Figure 2. 2. Gross Figure 2. Gross Gross Domes Domes tic Domestic Product tic Product Product by by Philippines: 2010-2018 by Island-Region: 2018 10.0 10.0 6.8 6.8 8.0 8.0 6.6 6.6 6.0 6.0 6.4 6.4 4.0 4.0 6.2 6.2 2.0 2.0 6 6 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q3 Q1 Q1 Q3 Q3 Q1 Q3 Q1 Q1 Q3 Q3 Q1 Q1 Q3 Q1 Q3 Q3 Q1 Q1 Q3 Q3 Q1 Q1 Q3 Q3 Q1 Q3 Q1 Q3 2010 2010 2011 2011 2012 2013 2012 2014 2013 2014 2015 2015 2016 2017 2016 2017 2018 2018 Philippines Luzon Philippines Luzon Visayas Visayas Mindanao Mindanao Source: National Income Accounts, Philippine Statistics Authority 4. 4.poverty 4. However, However, However, incidence poverty poverty in incidence incidence the Philippines inremained has the in the Philippines Philippines high hashas – particularly remained inremained Mindanao. high high – particularly Over the– particularly in poverty last nine years, in Mindanao. Mindanao. Over Overthe the last nine last years, nine years, poverty poverty incidence incidence has declined has declined across across all all island-groups, island-groups, incidence has declined across all island-groups, albeit slowly (Figure 3). The pace of extreme poverty reduction in the Philippines albeit averaged albeit 0.9 slowly slowly (Figure (Figure percentage points 3). per 3). The year The pacepace between extreme of 2006 of extreme poverty and 2015, poverty reduction reduction less than in 1.4 half of the the inpoints Philippines the Philippines averaged per year decline averaged0.9 in the 0.9 developing world aspercentage a whole points percentage and points much per year per slower year between than between the 2006 rate of 2006andand poverty 2015, 2015, reduction less in than less than halfhalf Indonesia of Vietnam and the of the 1.4.1.4 2 points With points an per year per average year of decline 1.4 percentage decline decline inpoints in the the from developing2006 and developing world asthe 2015, world aas decline whole a whole in poverty and and much muchincidence slower slower has than been rate the the than slowest rate in Mindanao, of poverty of poverty where in reduction reduction million 8.9 in individuals or nearly Indonesia Indonesia 4 andand out of Vietnam 10 Vietnam (37.1 2 2percent) Mindanawons were poor in 2015 (Figure 4). Among all of Mindanao regions, ARMM . With. With an average an average decline decline of 1.4 percentage of 1.4 percentage points points from 2006 from andand 2006 2015,2015, has the highest poverty incidence (53.7 percent) — half of the region’s population lives below the poverty line and its poverty the decline the in decline in poverty poverty incidence incidence has been has been slowest slowestin in Mindanao, Mindanao, wherewhere8.9 8.9 million million incidence is twice the national average (21.6 percent). At 33.8 percent in 2015, the poverty incidence in Mindanao outside of individuals individuals or or ARMM nearly nearly is 4 out slightly 4 out of (37.1 10 of than lower 10 (37.1 in Mindanao as a Mindanawons percent) percent) Mindanawons whole, were but it is still were higher poor than in poor 2015 in 2015 in Luzon (Figure (16.7 (Figure4).and percent) 4). AmongAmong Visayas all allpercent). of (29.6 of Mindanao Mindanao regions, regions, ARMM ARMM has has the highest the highest poverty poverty incidence incidence (53.7 percent) (53.7 percent)— Because Mindanao holds about a quarter of the Philippines’ population (23.9 percent or 24.1 million Filipinos), but nearly half of half — of half of the the region’s region’s its poor (40.4 population population percent), lives significantly lives belowbelow reducing the thepoverty poverty poverty lineline nationwide and and its poverty its poverty critically hinges on incidence incidence reducing is twice poverty twice is in the the national Mindanao. national average average (21.6(21.6 percent). percent). At 33.8 percent At 33.8 percent in 2015, in 2015, the the poverty poverty incidence incidence in Mindanao in Mindanao outside outside of of ARMMARMM is slightly is slightly lower lower than in Mindanao than in Mindanao as aaswhole, a whole, but but is still it isitstill higher higher thanthan in Luzon in Luzon (16.7 (16.7 Figure 3. Poverty Incidence among Population Figure 4. Distribution of Poor Population percent) percent) and Visayas and Visayas (29.6 (29.6 percent percent ). ). Because Because Mindanao Mindanaoholds about holds a about a quarter quarter of of the Philippines’ the Philippines’ Figure 3.byPoverty Incidence Island-Region: among 2006-2015 4. Distribution Figure of Poor Population by Island-Region: 2015 population population Population (23.9 by percent (23.9 or 24.1 percent Island-Region: or 24.1 million million 2006-2015 Filipinos), but by Filipinos), nearly but nearly halfhalf of its Island-Region: of its poor poor 2015 (40.4 (40.4 percent), percent), significantly significantly 60.0 reducing poverty reducing nationwide poverty nationwide critically hinges critically hinges on reducing on reducing poverty poverty in Mindanao. in Mindanao. 40.4% or 8.9 50.0 Million 40.0 34.3% or 7.5 Million 30.0 20.0 10.0 0.0 2006 2009 2012 2015 Philippines Luzon 25.3% or 5.5 Million Visayas Mindanao ARMM Luzon Visayas Mindanao LuzonVisayas Mindanao 2 2 World Bank. World 2018. Bank. 2018. Making Making Growth Growth Work for the Work for the Poor: Poor: A Poverty A Poverty Assessment Assessment forPhilippines for the . Washington, the Philippines DC: World . Washington, DC: World Source: Family Income and Expenditure Survey 2015 and Census of Population 2015, Philippine Statistics Authority Bank Source: Group Bank Family Groupand Expenditure Survey 2015 and Census of Population 2015, Philippine Statistics Authority Income 5. The MJR concluded that accelerating inclusive growth and reducing poverty in the 2 Philippines, World Growth Work for in and particularly Bank. 2018. Making theMindanao, Poor: A Poverty require Assessmentthe creation for the of Philippines enough quality . Washington, DC: World jobs. The Bank Group Government of the Philippines aims to lower the poverty 2 2 incidence from 21.6 percent in 2015 to 2 14.9 percent in 2022, equivalent to lifting about six million Filipinos 3 of poverty out BANK WORLD . For POLICY NOTE SOCIAL PROTECTION Mindanao, a proportional contribution would translate this effort to reducing the poverty 5. The MJR concluded that accelerating inclusive growth and reducing poverty in the Philippines, and particularly in Mindanao, require the creation of enough quality jobs. The Government of the Philippines aims to lower the poverty incidence from 21.6 percent in 2015 to 14.9 percent in 2022, equivalent to lifting about six million Filipinos out of poverty3. For Mindanao, a proportional contribution would translate this effort to reducing the poverty incidence from 37.1 percent in 2015 to 23.4 percent in 2022. A lack of quality jobs is a core challenge to meeting these objectives. 6. In turn, quality job creation requires the workforce to have the appropriate skills and knowledge. Delivering inclusive economic growth and poverty reduction through quality jobs requires investing in human capital, such as education and skills, to create gainful employment opportunities, especially among the poor and vulnerable. This includes an emphasis on improving the educational and employment prospects of those who fail to complete the full cycle of basic education4 or those who have dropped out. The MJR identifies human capital investment as a core driver of regional development in Mindanao, specifying basic education as well as skills and employment of Filipino youth as the two priority areas. 7. Building on the MJR, this study delves deeper on the challenges of sustaining human capital and building the foundations for further inclusive growth in Mindanao: investing in its people. Since 2015, the landscape of human capital in the country and in Mindanao have undergone political and economic changes. Most notably, the country experienced unprecedented economic growth in recent years and the government under President Rodrigo Duterte committed to invest in human capital development and reduce its inequalities in the Philippine Development Plan 2017-2022. Through Executive Order No. 24, the President reorganized the Cabinet clusters system to reflect his Administration’s development agenda. He retained the Human Development and Poverty Reduction (HDPR) cluster which is tasked to improve the quality of life of the Filipino people through a broad-based approach in the delivery of services. Using the latest administrative and survey data from the Philippine Statistics Authority, and other administrative data from implementing government agencies, this study analyzes educational and labor market outcomes in Mindanao and assesses the performance of key employment government programs implemented in the island-region. It also expands on the set of data collected for the MJR to cover areas that are becoming increasingly important, such as preschool education, college education and youth-oriented government programs. Based on this evidence, this study highlights both progress and challenges and provides recommendations to key HDPR member-agencies on how to develop human capital in Mindanao that will support the government objective of sustained inclusive growth and accelerated poverty reduction. This report will form part of the analytical work that will feed into the Mindanao Skills Development Strategy, a medium-term roadmap for the HDPR cluster to consider in prioritizing strategic actions on education, training, employment facilitation, and workforce development initiatives in Mindanao.” Box 1. Main messages of the Mindanao Jobs Report: A Strategy for Mindanao Regional Development Driving down poverty and delivering on the government’s Strategic Framework for Mindanao Peace and Development will demand a new approach to engagement in Mindanao. To support this, a strategy for regional development in Mindanao was drawn up. The three main components are: (1) raise agricultural productivity and improve farm-to-market connectivity; (2) boost human development; and (3) address drivers of conflict and fragility and build up institutions in ARMM and conflict-affected areas. The strategy will build on Mindanao’s comparative advantage and tighten its links with the rest of South East Asia. It identifies three priorities for interventions to unlock agricultural potential: (1) raise farm productivity through agrospatial approaches and productive alliances; (2) build up logistics services, improve roads from fields to markets; and (3) develop key ports and modernize customs procedures. Connectivity bottlenecks are compounded by limited human capital, especially skills deficits. Over 80 percent of Mindanao’s farmers and fishermen are poor or near- poor and lack scale and skills to compete. To maximize productivity in Mindanao, a number of interventions are planning to address shortfalls in the inter-locking areas of basic education and skills and job creation. The plan gives special attention to youth in conflict-affected areas. Policy recommendations are made in four separate categories: (1) increasing agricultural productivity by improving extension and irrigation services, along with price reforms to realize Mindanao’s agriculture potential; (2) building up logistics and transport connectivity by improving road networks and the efficiency of shipping services to reduce trade costs; (3) improving the supply of reliable power and the speed, affordability, and quality of information and communications technology (ICT) services by fostering competition; and (4) supporting private investment by addressing the growing skills gap, the high regulatory burden for businesses, and by improving financial inclusion and the governance of land. A separate section considers economic policy measures to support the resolution of Mindanao’s longstanding violent conflicts. 3 National Economic and Development Authority. 2017. Philippine Development Plan 2017-2022. 4 Basic education in the Philippines comprises one year of kindergarten, six years of elementary school, four years of junior high school and two years of senior high school. www.worldbank.org 3 technology (ICT) services by fostering competition; and (4) supporting private investment by addressing the growing skills gap, the high regulatory burden for businesses, and by improving financial inclusion Investing in and the Skills to Promote governance Inclusive of land. A separate section considers economic policy Growth in Mindanao measures to support the resolution of Mindanao‘s longstanding violent conflicts. Figure B.1. Components and planned interventions of the strategy for Mindanao Regional Development Figure B.1. Components and planned interventions of the strategy for Mindanao Regional Development II. Education and Skills Source: World Bank (2017), “Mindanao Jobs Report”. Source: World Bank (2017), ―Mindanao Jobs Report‖. A. Basic Education II. Education 8. and Skills spending on basic education has increased significantly, including in Government 5 Mindanao. Primarily funded by the national government, total real basic education spending has nearly A. Basic doubled from P118 billion in 2009 to P218 billion in 2017, partly due to the introduction Education of K to 12 Program in 2013 (Figure 5Error! Reference source not found.). The major funding 8. Government from nationalspending on basic education government uses thehas increased number students inincluding of significantly, in Mindanao. proportioning Primarily the budget funded by the national across regions. By island-group, Luzon benefitted the most with more than half or 55 percent of billion government, total real basic education spending has nearly doubled from P118 billion in 2009 to P218 the in 2017, partly due to the introduction of K to 12 Program in 2013 (Figure 5). The major funding from total spending in 2017, followed by Visayas and Mindanao with 23 percent and 22 percent national government uses the number of students in proportioning the budget across regions. By island-group, Luzon benefitted the most with more than half or 55 percent shares, respectively (Figure 6Error! Reference source not found.). The other component of the of the total spending in 2017, followed by Visayas and Mindanao with 23 percent and 22 percent shares, respectively (Figure 6). basic education spending came from Local Government Units (LGUs), specifically from the The other component of the basic education spending came from Local Government Units (LGUs), specifically from the Special Special Education Fund comprising 1 percent of the property tax. This drives the differences in Education Fund comprising 1 percent of the property tax. This drives the differences in the total basic education spending across the total regions, basic allowing education urbanized spending areas to push across up theirregions, spending. allowing urbanized Within Mindanao, areas given theto pushtaxes up their higher accumulated from the spending. Within Mindanao, given the higher taxes accumulated from the vibrant economic vibrant economic activity, Region X and Region XI have the highest LGU and total spending on basic education, while ARMM and have Region activity, Caraga X and Region XI have the highest LGU and total spending on basic education, the lowest. while ARMM and Caraga have the lowest. Figure 5. Figure 5. Real Real BasicEducation Education Spending Basic Spending in Figure 6.Figure Share 6. Share of Real of Real Basic Basic Education Spending Education Billions in Billions (PhP), (PhP), Philippines: Philippines: 2009-2017 2009-2017 Spending in Billionsin Billions (PhP), (PhP), Philippines: 2017 Philippines: 250 2017 22.3 or 48.6 200 billion 150 55.2 or 120.3 100 billion 50 22.5 or 49.1 billion 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Luzon Visayas Mindanao Total- LGU National Government Luzon Visayas Mindanao Source: LGU Fiscal Data Statement of Receipts and Expenditures; Department of Education’s Statement of Appropriations, Allotments, Obligations, Disbursements and Source: Balances LGU (SAAODBs). Fiscal Data Statement of Receipts and Expenditures; Department of Education’s Statement of Note: Real Basic Education Appropriations, Spending inObligations, Allotments, Figure 6 accounts for both NG Disbursements and and LGU spending. Balances (SAAODBs). Note: Real Basic Education Spending in Figure 6 accounts for both NG and LGU spending. 4 WORLD BANK SOCIAL PROTECTION POLICY NOTE 9. Despite the huge investment, school enrollment and completion rates in Mindanao 9. Despite the huge investment, school enrollment and completion rates in Mindanao have improved but have remained below the national average especially for secondary school. Similar to other island-groups, more and more students in Mindanao are enrolled in and completing elementary and secondary school. Net enrollment rates in Mindanao have risen over time (to 91 percent for elementary and 67 percent for high school in 2017) but have remained below the national average which in 2017 stood particularly at fast. particularly 94 percent for However, However, fast. and elementary even 76 percent even after this for after progress, this secondary Mindanao progress, education Mindanao (Figure still 7 andlagged still 8). Figure behind lagged behind Luzon Elementary and Luzon rates completion and particularly particularly fast. However, even fast. However, after this even progress, after this progress, Mindanao still Mindanao lagged lagged stillbehind behind Luzon Luzon and have and Visayas, where Visayas, where completioncompletion rates rates exceeded 90 exceeded 90 percent percent and 80 percent and 80 at the percent elementary at the elementary and and grown particularly fast. However, even after this progress, Mindanao still lagged behind Luzon and Visayas, where completion rates where completion Visayas, Visayas, rates exceeded where completion 90 percent rates exceeded 90 and percent 80 percent and 80 at the elementary percent and at the elementary and secondary exceeded level, respectively secondary 90 percent level, and respectively 80 percent (Figure (Figure 9 and Figure at the elementary and10). 9 and Figure 10). secondary level, respectively (Figure 9 and Figure 10). secondary secondary level, respectively level, respectively (Figure 9(Figure and Figure 10). 9 and Figure 10). Figure Figure 7. Elementary Figure 7. Elementary Elementary 7.Net Net Net Enrollment Enrollment Enrollment Figure 8. Rate Figure Secondary Figure 8. 8. Secondary Net Enrollment Net Enrollment Rate Rate Figure Figure 7. 7. Elementary Elementary Net Net Enrollment Enrollment Figure 8. Figure Secondary8.Secondary Secondary Net Enrollment Net Enrollment Net Rate Rate Enrollment Rate Rate by Rate by Island-Region: Island-Region: by Island-Region: 2009-2017 Island-Region: 2009-2017 2009-2017 by by Island-Region: 2009-2017 Island-Region: 2009-2017 Rate by Rate by Island-Region: 2009-2017 2009-2017 by Island-Region: by Island-Region: by Island-Region: 2009-2017 2009-2017 2009-2017 100% 100% 100% 100% 100% 100% 100% 100% 90% 90% 90% 90% 80% 80% 80% 80% 90% 90% 70% 70% 90% 90% 70% 70% 60% 60% 60% 60% 50% 50% 50% 50% 80% 80% 40% 40% 80% 80% 2009 2009 2010 2011 2010 2013 2012 2012 2011 2014 2013 2017 2016 2017 2016 2015 2015 2014 40% 2009 40% 2011 2010 2010 2009 2012 2011 2013 2012 2014 2013 2016 2015 2015 2014 2017 2016 2017 2009 2012 2009 2010 2011 2011 2014 2010 2013 2013 2016 2012 2015 2015 2016 2017 2014 2017 2009 2010 2011 2009 2012 2011 2014 2010 2013 2013 2016 2012 2015 2015 2016 2017 2014 2017 Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Mindanao (No ARMM) (No ARMM) Mindanao Mindanao (No ARMM) (No ARMM) Mindanao Mindanao (No ARMM) Mindanao (No ARMM) Mindanao (No ARMM) Mindanao (No ARMM) Source: Department Source: Department of Education of Education Source: Source: Department Source: Department Department of Education of Education of Education Figure 9. 9. Figure Elementary Figure Elementary 9. Elementary Completion Rate Completion Figure 10. Rate by Rate by Completion Figure Figure 10. 10. Secondary SecondarySecondary Completion Completion Completion Rate byRate Rate by Figure 9. Elementary Figure 9. Elementary Completion Rate by Rate by Completion Figure 10. Figure Secondary Completion 10. Secondary Rate by Rate by Completion by Island-Region: 2009-2017 2009-2017 Island-Region: Island-Region: 2009-2017 by Island-Region: Island-Region: Island-Region: 2009-2017 2009-2017 2009-2017 Island-Region: Island-Region: 2009-2017 2009-2017 Island-Region: Island-Region: 2009-2017 2009-2017 100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 80% 80% 80% 80% 80% 80% 60% 60% 60% 60% 60% 60% 60% 60% 40% 40% 40% 40% 40% 2009 40% 2010 2009 2012 2011 2011 2010 2013 2012 2015 2014 2016 2015 2014 2013 2017 2016 40% 2017 2009 40% 2011 2010 2010 2009 2012 2011 2013 2012 2014 2013 2016 2015 2015 2014 2017 2016 2017 2009 2012 2009 2010 2011 2011 2014 2010 2013 2013 2016 2012 2015 2014 2017 2015 2016 2017 2009 2010 2011 2009 2012 2011 2014 2010 2013 2013 2016 2012 2015 2015 2016 2017 2014 2017 Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Philippines Philippines Luzon Luzon Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Visayas Visayas Mindanao Mindanao Mindanao (No ARMM) (No ARMM) Mindanao Mindanao (No ARMM) (No ARMM) Mindanao Mindanao (No ARMM) Mindanao (No ARMM) Mindanao (No ARMM) Mindanao (No ARMM) Source:Source: Department Source: Department Department of Education of Education of Education Source: Department Source: of Education Department of Education 10. 10. Among all regions Among in Mindanao, all regions in Mindanao, school enrollment school enrollment and completion and completion rates rates were were lowest lowest 10. all 10. Among Among 10. regions Among all in regionsallin Mindanao, regions Mindanao, school in Mindanao, enrollmentschool enrollment school rates and completion enrollment and werecompletion andin lowest completion ratesIn ARMM. wererates 2017, lowest thewere lowest elementary school in ARMM. ARMM. inrate 54 In In 2017, the 2017, elementary the school elementary school completion completion rate was 54 percent rate was 54 in percent ARMM but in ARMM butyear, above above in ARMM. completion in ARMM.2017, Inwas the2017, In elementary percent in the ARMM school elementary school completion but above completion 80 percent rate was in all rate 54 regions other percent was 54 ininpercent ARMM Mindanao. in In but ARMMabove the samebut aboveARMM’s 80 80 percent secondary in all other percent level net in all other regions in30Mindanao. regions In the in Mindanao. same In the year, same ARMyear, ARM M’s secondary M’s secondary level netlevel net 12). 80 percent80 in allenrollment percent other in all regions rate other was in regions percent in Mindanao. Mindanao. while In it was the above same In the 60 year,percent sameARM in year,all M’s other ARM regions secondary M’s (Figure level net secondary 11 and Figure level net enrollment enrollment Even excludingrate ARMM,wasrate was 30 30 percent while it while percent wascompletion above it was60 above percent60 percent regions in all other in all other regions (Figure 11 and (Figure 11 and enrollment rate wasthe enrollment 30 average ratepercent was 30 enrollment while percent and it was while it was above rates 60above percent in Mindanao 60 percent in were all other in allstill regions lower other than in 11 (Figure regions other island-groups. and (Figure 11 and Figure Figure 12). Even12). Even excluding excluding ARMM, ARMM, the average the average enrollment enrollment and completion and completion Mindanao rates in rates in Mindanao Figure Figure 12). Even excluding 12). ARMM, ARMM, Even excluding the average the enrollment and completion average enrollment rates in Mindanao and completion rates in Mindanao were were still still lower than lower in other island-groups. than in other island-groups. lower were stillwere than still in other lower in other island-groups. thanisland-groups. www.worldbank.org 5 7 7 7 7 Investing in Skills to Promote Inclusive Growth in Mindanao Figure 11. Selected Elementary Education Figure 12. Selected Secondary Education Figure 11. Figure 11. Selected Selected Elementary Elementary Education Education Indicators Figure Figure 12. 12. Selected Selected Secondary Secondary Education Education Indicators Indicators by Mindanao Indicators Region: by Mindanao 2017 Region: 2017 Indicators by Mindanao Region: 2017 by Mindanao Region: 2017 Indicators by Mindanao by Mindanao Region: Region: 2017 2017 100% 100% 100% 100% 80% 80% 80% 80% 60% 60% 60% 60% 40% 40% 40% 40% 20% 20% 20% 20% 0% 0% 0% 0% IX X IX XI X XII XI CARAGA ARMM IX X IX XI X XII XI CARAGA XII ARMM CARAGA ARMM XII CARAGA ARMM Completion Rate Enrollment NetRate Completion NetRate Enrollment Rate Completion Rate NetRate Completion Enrollment NetRate Enrollment Rate Source: Source: Department Department of Education of Education Source: Department of Education 11. 11. Secondary Secondary11.education education dropout Secondary ratesdropout were high education rates in Mindanao dropout were rates high and more were in high Mindanao pronounced and among in Mindanao more males and pronounced than more females. The progress pronounced among males made in among than completion females. rates is The accompanied progress by an made overall in decline completion in dropout males than females. The progress made in completion rates is accompanied by rates rates. is Similaraccompanied to other by an island-regions, elementary an dropout rates overall decline in Mindanao in dropout more than halved rates. Similar from 10 percent to otherto in 2010 to island-regions, four percent in elementary 2017 (Figure 13). However, rates in rates dropout dropout the bigger overall decline in dropout rates. Similar other island-regions, elementary concern was in secondary education where the decrease was much slower. In Mindanao, the secondary dropout rate decreased in Mindanao more Mindanao thanmorehalved from than halved 10 percent in 2010 to four percent in 2017 (Figure 13). from 9 percent in 2010 to 8 percent in 2017from (Figure10 percent 14). Notably, in 2010 while to four percent the secondary in 2017 dropout rate declined(Figure 13). for other island- However, the However,bigger the concern bigger was concernin secondary was in education secondary where education the decrease where the was decrease much regions between 2016 to 2017, it increased slightly for Mindanao in the same period. This challenge with secondary students was slower. much slower. In Mindanao, mirrors Mindanao, In lower the the secondary completionthe rates dropout secondary observed rate dropoutdecreased for secondary from 9relative rate decreased education percent from to in 2010 in 9 elementary percent to 8 percent 2010 education.to By in 2017 8 percent sex, in 2017 dropout rates have (Figure 14). Notably, (Figure 14). been consistently while moreNotably, pronounced the secondary while among the dropout secondary boys than girls. rate dropout declined Using the rate for average other declined island-regions forfrom of rates other2010 between island-regions to 2017, males between in secondary school to 2016 2017, recorded 2016 to it2017, increased a dropout rate it of slightly 11 percent, increased for Mindanao whereas slightly females for inthe of Mindanao thesamesame theperiod. inlevel recorded only 8 challenge This same period. percent This (Figurewith 15). Generations challenge with secondary students of under-educated boys mirrors may the translatelower to completion social imbalances rates that observed could be for harmful secondary for women secondary students mirrors the lower completion rates observed for secondary education relative 5 .education relative to elementary education. to elementary By sex, By education. dropout rates have sex, dropout been rates haveconsistently more pronounced been consistently among among more pronounced boys thanboys13. Figure Figuregirls. than 13. Using 13. Using girls. Figure Elementary Elementarythe average the Dropout Elementary Dropout average Rate Dropout Rateof rates from of rates by Rate 2010 to from 2010 by Figure 2017, 14.Figure males to 2017, 14. Secondary in secondary males Dropout Secondary in Rate byschool secondary Dropout school Rate by Figure 14. Secondary Dropout Rate recorded a dropout recorded a dropout by rate of 11 Island-Region: Island-Region: ratepercent, of 112010-2017 2010-2017 2010-2017 Island-Region: females females whereaswhereas percent, of the same of level the Island-Region: same recorded level 2010-2017 Island-Region: only 8 recorded percent only 2010-2017 by Island-Region: 2010-2017 8 percent (Figure 25% 15). Generations (Figure 15). 25% of under-educated Generations of boys may under-educated translatetranslate to socialto boys 25% may 25% imbalances that could social imbalances becould be that 5 for women harmful harmful . for women 5 . 20% 20% 20% 20% 15% 15% 15% 15% 10% 10% 10% 10% 5% 5% 5% 5% 0% 0% 0% 0% 2010 2012 2011 2011 2010 2014 2013 2013 2012 2015 2014 2016 2015 2017 2016 2017 2010 2011 2012 2010 2011 2013 2014 2012 2015 2013 2014 2016 2017 2015 2016 2017 Philippines Luzon Philippines Visayas Luzon Visayas Philippines Luzon Philippines Visayas Luzon Visayas Mindanao ARMM Mindanao ARMM Mindanao ARMM Mindanao ARMM Source: Department of Education Source: Department Source: Department of Education of Education Elementary Figure 15.Figure and Secondary 15. Elementary and Secondary Dropout Rate Dropout by Sex: Rate by Sex: 2010-2017 2010-2017 average average 20% 20% 15% 15% 5 Clarissa,5David; Albert, Clarissa, Jose David; Ramon. Albert, 2015. Jose Underperforming Boys2015. Ramon. in School: in Boys Underperforming What can be School: done? What canRappler. be done? Rappler. 10% 10% 5% 5% 5 Clarissa, David; Albert, Jose Ramon. 2015. Boys Underperforming8in School: What can be done? Rappler 8 6 0% 0% WORLD BANK SOCIAL PROTECTION POLICY NOTE Male Male Female Female Male Male Female Female Mindanao Mindanao ARMM ARMM 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Philippines Luzon Visayas Philippines Luzon Visayas Mindanao ARMM Mindanao ARMM Source: Department of Education Figure Figure 15. Elementary 15. Elementary and Secondary and Secondary Dropout Dropout Rate Rate by Sex: by Sex:average 2010-2017 2010-2017 average 20% 15% 10% 5% 0% Male Female Male Female Mindanao ARMM Elementary Dropout Rate Secondary Dropout Rate Source: Source: Department Department of Education of Education 12. In terms of 12. the In of environment, learning terms the learning pupil-teacher ratiospupil-teacher environment, have generally decreased, but they ratios have remain high generally in some regions. The decreased, average number of pupils per teacher (the pupil-teacher ratio) has declined for but they remain high in some regions. The average number of pupils per teacher (the both elementary and secondary levels across all island-regions. In Mindanao, it fell impressively from 41 in 2009 to 30 in 2017 (Figure pupil-teacher ratio) has declined for both elementary and secondary levels across all 16 and Figure 17). In 2017, pupil-teacher ratios for elementary and secondary schools remained unequal in Mindanao. The rates island-regions. In Mindanao, it fell impressively from 41 in 2009 to 30 in 2017 (Figure 16 and were elevated in ARMM to 34 and in Region XI to 30, while the rates in CARAGA were low at 27 and Region IX at 28. This may be a sign of significant inefficiencies as Error! Reference source not found.). In 2017, pupil-teacher ratios for elementary and teachers from regions with low pupil-teacher ratios could be redeployed to regions with high ratios. secondary schools remained unequal in Mindanao. The rates were elevated in ARMM to 34 and in Region XI to 30, while Figure the rates in 16. Elementary CARAGA Ratio Pupil-Teacher were low at 27 and Figure Region IX 17. Secondary at 28. This may Pupil-Teacher Ratio Figure Figure be a sign of16 . Elementary 16. Elementary significant Pupil-Teacher Pupil-TeacherRatio Ratio Figure 17.Figure 17. Secondary Secondary Pupil-Teacher Pupil-Teacher Ratio Ratio Island-Region: as byinefficiencies teachers from 2009-2017 regions with by low pupil-teacher Island-Region: ratios 2009-2017 could by Island-Region: by Island-Region: 2009-2017 2009-2017 by Island-Region: 2009-2017 2009-2017 by Island-Region: be redeployed to regions with high ratios. 65 65 65 65 55 55 55 55 45 45 45 45 35 35 35 35 25 25 2009 2010 2011 2012 2013 2014 2015 2016 2017 25 2009 2010 2011 2012 2013 2014 2015 2016 2017 25 2009 2010 2011 2012 2013 2014 2015 2016 2017 Philippines Luzon Visayas 2009 9 2010 2011 2012 2013 2014 2015 2016 2017 Philippines Luzon Visayas Philippines Luzon Visayas Mindanao ARMM Philippines Luzon Visayas Mindanao ARMM Mindanao ARMM Mindanao ARMM Source: Department of Education Source: Department of Education Source: Department of Education 13. Teachers’ competencies in Math and Science appeared lower than in English. The Teachers’ English Proficiency Test and the Process Skills Test in Science and Mathematics (TEPT-PSTM) measures competencies in English, Science and Mathematics. 13. Teachers’ competenc ies in Math and Science appeared lower than in English. The 13. Delivered to teachers of Teachers’ grades nine ies competenc and in ten,Math and mean the overall Science appeared percentage lower than fell in all island-regions in within English. The average range the above (50% Teachers’ to 75%) English English with Mindanao Pro ciency marginally lagging Test and the Process Skills Process Test in Science and Mathematics Teachers’ Pro ciency Test and behind. However, the Process performance Skills Test inin Science Skills, and such as Science and Math, was Mathematics lower including inmeasures (TEPT-PSTM) than English, competencies Mindanao (Figure in English, Science Expenditure and Mathematics. Delivered to (TEPT-PSTM) measures competencies in18). Similarly, English, a Public Education Science and Mathematics. Tracking and Delivered toQuantity Service Delivery Studyteachers of (PETS-QSDS) grades nine and ten, the overall mean percentage in all island-regions fell within the teachers of grades nine found that the and ten, elementary overall and meanhigh school teachers percentage in allhave a higher level fell island-regions of knowledge within the in English than in above average (50%trailed rangeARMM to 75%) with Mindanao marginally lagging behind. However, above average range (50% to 75%) with Mindanao marginally lagging behind. However, Math and Science. 6 Within Mindanao, behind all the other regions in all components and overall (Figure 19). performance in Process Skills, such as Science and Math, was lower than English, including in performance in Process Skills, such as Science and Math, was lower than English, including in Mindanao (Error! Reference source not found.). Similarly, a Public Education Expenditure Mindanao (Error! Reference source not found.). Similarly, a Public Education Expenditure Tracking and Quantity Service Delivery Study (PETS-QSDS) found that elementary and high Tracking and Quantity Service Delivery Study (PETS-QSDS) found that elementary and high school teachers have a higher level of knowledge in English than in Math and Science. Within school teachers have a higher level of knowledge in English than in Math and Science. Within Mindanao, ARMM trailed behind all the other regions in all components and overall (Error! 6 Mindanao, ARMM trailed behind all the other regions in all components and overall (Error! Al-Samarrai, Samer. 2016. source Reference Assessingnot basicfound. ). service delivery in the Philippines : public education expenditure tracking and quantitative education Reference service source delivery study not found. (English). ). D.C. : World Bank Group. Washington, www.worldbank.org 7 Investing in Skills to Promote Inclusive Growth in Mindanao Figure Figure18. TEPT-PST Figure 18. TEPT-PST 18. TEPT-PSTof Gr. ScoresScores 9 of and Scores Gr. of10 Gr. Teachers 9 Gr. and9 and Figure Figure 19. 19. Figure TEPT-PST TEPT-PST 19. Scores TEPT-PSTScoresof of Gr.Gr. Scores and 9 of Gr. 9 Gr. and 10 Teachers 9 and 10 Gr. Gr. 10by Island-Region: Teachers Teachers by Island-Region: 2017 by Island-Region:20172017 Teachers Gr. 10 Gr. by 10 Teachers byMindanao Mindanao Region: by Mindanao 2017 Region: Region: 20172017 100 100 100 100 75 75 75 75 50 50 50 50 25 25 25 25 0 0 0 0 n n ion ion all all ture re ion sio n sio sio st st all all tu re re ion ion s s Te st Te st er er c ctu ress e s hen en Te Te ve r ve r uc ctu ress es s en en Ov Ov r u r u r h i l l s i l l s O O St r ru St Exp x p r reh r eh k ills k ills St St Exp Ex p pr e pr e Sk Sk E mp p s S s S en en C o m om ss ss en en o m es es tt tt C ce ce ritt ritt ng C g Co r oc r oc W r i r i W din g ing Pr o Pr o W W di i n P P a ad a ad Re Re Re Re Philippines LuzonLuzon Philippines Visayas Visayas Mindanao Mindanao Mindanao Mindanao IX XIX XIX XI XII XII CARAGA ARMM CARAGA ARMM Source: Source: Bureau Bureau Source: Bureau of Education of Education of Education Assessment, Assessment, Assessment, Department Department of Department Education of Education of Education 14. 14. 14. In In terms of terms In terms classroom of classroom classroom of practice, practice, practice, Mindanao teachers Mindanao Mindanao have strong teachers teachers ability in have strong have Classroom ability strong ability Culture, but in Classroom exhibit in Classroom weaker ability in Culture, Culture, Instruction but exhibit but exhibit and Socio-emotional weaker weaker ability Skills. ability Recent educationin research Instruction in Instruction andthat found and Socio-emotional Socio-emotional variation in studentSkills. Skills. learning Recent may Recent be better education education explained by research research teachers’ foundfound practices that that in the variation variation classroom 7 in . Thestudent in student World learning Bank learning may developed amay be better be better classroom explained explained observation toolby by teach teach “TEACH” to observe ers’ ers’ the classroom practices of 140 6 teachers6 in Region 10 in Mindanao . Results suggested that teachers do well in terms of classroom practices practices in the the classroom in classroom . The World . The Bank World Bank developed developed 8 a classroom a classroom observation observation tool tool “TEACH” “TEACH” management (supportive learning environment, opportunities to learn etc.) but 7 7 of instruction (providing to observe to observethe the classroom classroom practices practices of 140 of 140 teachers teachers in Region in Region10struggle 10 in inwith Mindanao key aspects Mindanao . Results . Results suggested suggested quality that feedback, that teachers teachers asking do do wellthinking in terms well questions in terms prompt oforclassroom critical of classroom thinking) management management and fostering socio-emotional (supportive (supportive learning learning skills (autonomy, environment, social and environment, collaborative opportunities opportunities skills etc.) to learn (Figure etc.)etc.) to learn 20). Teachers but struggle also but struggle rated withwith themselves key aspects key aspectsmore positively in of instruction of instructionterms of (providingtheir (providingteaching quality practices quality feedback, and skills feedback, compared to the observation results. They tended to think that their top priority should be arriving at school on time (50 percent) asking thinking asking questions thinking questions or prompt or prompt critical critical thinking) thinking)and and fostering fostering socio-emotional socio-emotional skillsskills rather than improving student learning (14 percent) and have limited access to professional development opportunities. (autonomy, (autonomy, social social collaborative and and collaborativeskillsskills (Error! (Error! etc.)etc.) Reference source Reference source not found. not found. ). Teachers ). Teachers rated also also themselves rated themselves more positively more in terms positively in terms of their of their teaching teaching practices practices and and skills skills compared compared to to the observation the observation results. results. They Figure tended They 20. to think tended Distribution to of think thatTEACH Average theirtheir that top top priority Scores priority should by Element, should be10: Region be arriving arriving 2018 at school at school on on (50 percent) timetime rather (50 percent) rather thanthan improving improving student student learning learning (14 percent) and and (14 percent) have have limited limited access access to to professional professional development development opportunities. opportunities. 6 6 Araujo, Araujo, Caridad, Caridad, PedroPedro Carneiro, Yyannu Carneiro, Yyannu Cruz-Aguayo, Cruz-Aguayo, and Norbert Schady. and Norbert 2016. Schady. 2016. Teacher-Quality Teacher-Quality and Learning and Learning Outcomes Outcomes in Kindergarten. Quarterly in Kindergarten. Journal Quarterly Journal of Economics: 1415-53. of Economics: 1415-53. 7 7 World World Bank. 2018. Bank. 2018. Teacher Practices Teacher in Mindanao: Practices in Mindanao: Results Results of the Teach of the Teach Classroom Classroom Observation Study. Observation Study. Source: World Bank. 2018. Teacher Practices in Mindanao: Results of the Teach Classroom Observation Study Note: Results of the TEACH tool are based on a scale of 1 to 5, with 5 being the highest quality score. 7 Araujo, Caridad, Pedro Carneiro, Yyannu Cruz-Aguayo, and Norbert Schady. 2016. Teacher-Quality and Learning Outcomes in Kindergarten. 11 11 Quarterly Journal of Economics: 1415-53. 8 World Bank. 2018. Teacher Practices in Mindanao: Results of the Teach Classroom Observation Study. 8 WORLD BANK SOCIAL PROTECTION POLICY NOTE Source: World Bank. 2018. Teacher Practices in Mindanao: Results of the Teach Classroom Observation Study Note: Results of the TEACH tool are based on a scale of 1 to 5, with 5 being the highest quality score. Source: World Bank. 2018. Teacher Practices in Mindanao: Results of the Teach Classroom Observation Study Note: Results of the TEACH tool are based on a scale of 1 to 5, with 5 being the highest quality score. 15. Learning outcomes as measured by the NAT scores have shown modest improvements 15. Learning over a seven-year outcomes as measuredperiod. The the a by NAT, Philippine-made NAT scores have standardized shown modest test, is a core indicator over improvements used a by the Department seven-year period. Education of The NAT, a toPhilippine-made measure the quality of basic education. standardized test, is a 15. Learning core From SYoutcomes indicator used 2008-2009 measured asby the to SY by the NAT scores Department 2014-2015, Education ofthe have shown modest NAT scores atimprovements to measure the quality the elementary over a seven-year of basic level have period. beenThe education. NAT, rising From a Philippine-made SY standardized test, is a core indicator used by the Department of Education to measure the quality of basic yet at slow pace. to a 2008-2009 SY 2014-2015, Across islands, the the NAT scores differences were the elementary at minimal as they level havestayed been rising all have within yet education. at a slow From SY 2008-2009 pace. Across SY 2014-2015, toislands, the the differences the elementary NAT scores atwere minimal level as have been they rising all yet at have a slow pace. stayed Across within the range islands, the of upper differences average were minimal scores as they (50% all have to stayed 75%) within (Figure the range of 21). upper Within average Mindanao, scores (50% to CARAGA 75%) (Figure 21). the range of garnered theupper highestaverage scores, scores which (50% hovered to 75%) 21). Within (Figure level superior thehovered (76% Mindanao, toto100%), CARAGA while ARMM Within garnered Mindanao, the CARAGA highest garnered scores,(Figure the highest which 22). scores, which the superior level (76% hovered the superior level (76% to 100%), while ARMM 100%), while ARMM recorded recorded the lowest the lowest scores (Figurescores 22). (Figure 22). recorded the lowest scores Figure 21. Gr. 6 NAT Performance by Figure 22. Gr. 6 NAT Performance by Figure 21. Gr. 6 NAT Island-Region: SY Performance 2008-2009 by to SY Figure 22. Gr. Mindanao 6 NAT Region: SYPerformance 2008-2009 by to SY Figure 21. Gr. 6 NATSY Island-Region: Performance 2008-2009 by Island-Region: to SY Figure 22. Region: Mindanao Gr. 6 NAT Performance SY 2008-2009 by Mindanao to SY Region: 2014-2015 SY 2008-2009 to SY 2014-2015 2014-2015 SY 2008-2009 to SY 2014-2015 2014-2015 2014-2015 100 100 100 100 75 75 75 75 2008-2009 2008-2009 2008-2009 2008-2009 2009-2010 2009-2010 2009-2010 2009-2010 2010-2011 2010-2011 50 50 2010-2011 2010-2011 50 50 2011-2012 2011-2012 2011-2012 2011-2012 2012-2013 2012-2013 2012-2013 2012-2013 2013-2014 25 25 2013-2014 2013-2014 2013-2014 25 25 2014-2015 2014-2015 2014-2015 2014-2015 0 0 ao IX X X XI II A an nao I X XI X XIIRAG GA RMM M 0 ind nda CA ARA A ARM 0Philippines M i C Luzon Visayas Mindanao M Philippines Luzon Visayas Mindanao Source: Source: Department of Education Tertiary B. of Education Department Education B. Source: Tertiary Education Department of Education 16. B. Tertiary16. Education Enrollment Enrollment opportunities opportunities and access and to access tertiaryto tertiaryare education education also more are also in limited more limited in Mindanao. Mindanao. For the For school the year school year 2017-2018, 2017-2018, 12 enrollees enrollees in in State and State Universities Universities Colleges (SUCs) and Colleges (SUCs) 16. Enrollment opportunities andwere access less to tertiary 12also more in Mindanao in Mindanao were less than half of education than half of Luzon – are Luzon nearly limitedthe – nearly the same as in theMindanao. same number asFor the of the school year number enrollees in of2017-2018, enrollees in enrollees in State Universities Visayas (Figure and Colleges 23). it (SUCs) While in Mindanao it reasonable may be reasonable were less than half of as Luzon Luzon – nearly comprises the same more as the number than half ofof the Visayas (Figure 23). While may be as Luzon comprises more than half of the enrollees in Visayas (Figure population, 23). the While it low numbermay be reasonable Higher Education ofEducation as Luzon comprises more than half of the population, the low number population, the low number of Higher Institutions Institutions (HEIs) areas (HEIs) in Mindanao in Mindanao plays a areas plays a of Higher Education role Institutions Mindanao (HEIs) in of SUCs areas plays a Forrole in low number itssame SUCs enrollees. of year, For the same school role in its in lowits low number number of SUCs enrollees. enrollees. For the same the school year,school the highest the highest number of HEIs number of HEIs year, the highest number of HEIs from both government and private sector in Mindanao was Davao with 94 HEIs (Figure 24). ThisThis fromfrom both government both government private andsector and private sector in Mindanao in Mindanao was Davao with was 94 Davao HEIswith (Figure HEIs 9424). This(Figure 24). starkly contrasted with the total in NCR, Region IV-A and Region III with 363, 291 and 223 starkly contrasted with the total in NCR, Region IV-A and Region III with 363, 291 and 223 HEIs, respectively. starkly contrasted with the total in NCR, Region IV-A and Region III with 363, 291 and 223 HEIs,HEIs, respectively. respectively. Figure 23. HEIs Enrollment by Island-Region: Figure 24. Distribution of HEIs by Region and Sector: FigureFigure 23. HEIs23. HEIs Enrollment Enrollment by Figure 24. Distribution by Figure 24. Distribution of HEIs of HEIs by Region and by Region and 2013-2017 SY 2017-2018 1,000,000 1,000,000 400 400 350 350 300 300 800,000800,000 250 250 200 200 600,000600,000 150 150 100 100 50 50 400,000400,000 0 0 IVA I Region V XII II Region VIIX NCR ARMM Region III VI CAR Region IX XI Region VII RegionIVB XII Region IVA Region VIII Region I Region V Region II Region X NCR ARMM Region III Region VI CARAGA CAR Region IX XI Region IVB Region VIII Region Region CARAGA Region Region Region Region Region 200,000 Region 200,000 2013 2013 2015 2014 20152017 2014 2016 2016 2017 Luzon Visayas Mindanao Government Private Luzon Visayas Mindanao Government Private Source: Commission on Higher Education Source Source: Commission : Commission on Higher Education on Higher Education Note: Enrollment data in the CHED website are only in absolute numbers. A better alternative would be in terms of rates Note: Enrollment Note: Enrollment data in the CHED website are only alternativenumbers. in absolute ofalternative better Aterms rates but arewould be in terms of rates but are data in The website the CHED unavailable. HEIs inare only Figure in absolute 25 numbers. exclude satellite A better campuses. would be in unavailable. 24 are but The HEIs in Figure unavailable. exclude The HEIs in Figure 25 exclude satellite campuses. satellite campuses. 17. Educational reforms will likely increase preference for tertiary level. Recent 17. Educational reforms will likely increase preference for tertiary level. Recent 9 educational www.worldbank.org policy reforms such as the “Uni ed Financial Assistance System for Tertiary educational policy reforms such 8 as the “Uni ed Financial Assistance System for Tertiary Education Act” (or UNIFAST) in 2015 , and the8 “The “Universal Access to Quality Tertiary Education Act” (or 9 UNIFAST) in 2015 , and the “The “Universal Access to Quality Tertiary Investing in Skills to Promote Inclusive Growth in Mindanao 17. Educational reforms will likely increase preference for tertiary level. Recent educational policy reforms such as the “Unified Financial Assistance System for Tertiary Education Act” (or UNIFAST) in 20159, and the “The “Universal Access to Quality Tertiary Education Act” in 201710, are aimed at improving access to tertiary education. The former provides a comprehensive and unified Philippine Institute for Development Studies (PIDS) that suggests that three out of four SHS financial assistance system to tertiary students, while the latter provides free tuition in 112 state universities and 122 local students plan to proceed to higher education. This is the case even for students in the TVL universities and colleges starting in the academic year 2018-2019. These will likely increase the preference for continued schooling track11. This suggests that there will be increased aspirations for quality jobs in the labor market among the first batch of Senior High School (SHS) graduates in 2018 and thus delay their entrance into the labor market. In fact, according tosince more people, Department including of Education the data11 Mindanawons, , 60 percent of SHS are set to become graduates better-educated. were anticipated to enroll in college and 39 percent in Technical-Vocational-Livelihood (TVL). This is consistent with the evidence from the Philippine Institute for Development Studies (PIDS) that suggests that three out of four SHS students plan to proceed to higher education. This is the case even for students Labor III.12. This in the TVL track and suggests Employment that there will be increased aspirations for quality jobs in the labor market since more people, including the Mindanawons, are set to become better-educated. A. Structure of the Labor Market 18. III. Labor and Labor force participation rates have recently dropped as a higher share of students Employment attend Senior High School program. From 2014 to 2017, the labor force participation rate fell across A. Structure of the Labor island-regions (Error! Reference source not found.). This is mostly due to the allMarket expansion of education opportunities. In Mindanao, the rate fell by 5 percentage points which participation 18. Labor force was faster thanratesthe have droppedof recentlyaverage national as 4a higher percentageshare of students points. Fromattend 2016 Senior High School to 2017, both theprogram. From 2014 to 2017, the labor force participation rate fell across all island-regions (Figure Philippines as a whole and Mindanao experienced a particularly pronounced drop of the labor25). This is mostly due to the expansion of education opportunities. In force participation rate. Within one year, it fell from 63.5 percent to 61.2 percent. Thisaverage of 4 Mindanao, the rate fell by 5 percentage points which was faster than the national percentage points. droptowas From 2016 pronounced 2017, both the Philippines primarily due to the a whole and Mindanao asimplementation of theexperienced SHS stage a particularly of the K to pronounced 12 drop force participation of the labor Program rate. Within one year, it fell from 63.5 percent to 61.2 percent. in 2016, which extended secondary schooling by two years. The take-up of the SHS This pronounced drop was primarily due to the implementation program was high, of thewith SHS stage about of 90the K to 12 of percent Program Gradein 102016, which students extended secondary proceeding to Gradeschooling 11 in 2017by 12 two . years. The Particularly for ARMM, the labor force participation rate was significantly lower by 12. Particularly take-up of the SHS program was high, with about 90 percent of Grade 10 students proceeding to Grade 11 in 2017 13 for ARMM, the labor force percentage participation points from the rate was significantly Mindanao average.lower by 12 This maypercentage indicatepoints a lack from the Mindanao of opportunity inaverage. the This may indicate a lack of opportunity in the region as half of the population choose to be economically inactive. region as half of the population choose to be economically inactive. Figure 25. Figure Force Participation Labor Force 25. Labor Rateby ParticipationRate byIsland-Region: Island-Region:2014-2018 2014-2018 70% 65% 60% 55% 50% 45% 2014 2015 2016 2017 2018 Philippines Luzon Visayas Mindanao ARMM Source: Source: Labor Force Survey, Labor Force Philippine Survey, Statistics Philippine Statistics Authority Authority 11 See Ortiz, M., Lagarto, M., Ortiz, D., Orbeta, A., & Potestad, M. (2018). “Senior High School and the Labor Market: Perspectives of Grade 12 Students and Human Resource O cers,” Discussion Papers DP 2018 -49 (Revised), Philippine Institute for Development Studies. 12 Transition Rate Data from Department of Education as of April 30, 2018. 9 See Republic Act No. 10687. 10 See Republic Act No. 10931. 11 Department of Education’s Learner Information System (LIS) Quick Count 14as of August 05, 2017. 12 See Ortiz, M., Lagarto, M., Ortiz, D., Orbeta, A., & Potestad, M. (2018). “Senior High School and the Labor Market: Perspectives of Grade 12 Students and Human Resource Officers,” Discussion Papers DP 2018-49 (Revised), Philippine Institute for Development Studies. 13 Transition Rate Data from Department of Education as of April 30, 2018. 10 WORLD BANK SOCIAL PROTECTION POLICY NOTE 19. Only half of younger women in Mindanao are part of the labor force. While nearly 90 percent 19. Only half of younger womenof men ages 20-29 in Mindanao are economically are part active, of the labor force. this While is the nearly case for 90 percent ofonly 44 percent men ages of economically 20-29 are women active, this is in for the case same theonly 44age group percent of(). Laborin women force participation the same rates age group among (Figure 26).women in their Labor force twenties rates among participation women in their much lower are twenties in Mindanao are much than in Luzon lower in Mindanao and than in Visayas, Luzon where where and Visayas, they stand at 60 at they stand percent and 57 60 percent and 57 percent, percent, respectively. Much more, such rate is significantly lower in ARMM where 23 percent respectively. Much more, such rate is significantly lower in ARMM where 23 percent of women in their twenties participate of in the women in their twenties participate in the labor force. Women in Mindanao may face limited labor force. Women in Mindanao may face limited economic opportunities and are likelier to work in the home especially during economic opportunities and are likelier to work in the home especially during armed conflicts armed conflicts when the husbands are fighting in war or when their children are drawn into battle14 . when the husbands are fighting in war or when their children are drawn into battle13. Figure Figure 26. 26. Labor Labor Force Force Participation Participation Rate Rate byby Sex Sex and and Age Age Group Group byby Island-Region:2018 Island-Region: 2018 100% 80% 60% 40% 20% 20-29 30-39 40-49 50-59 60+ 20-29 30-39 40-49 50-59 60+ 20-29 30-39 40-49 50-59 60+ 20-29 30-39 40-49 50-59 60+ Luzon Visayas Mindanao ARMM Male Female Source: Labor Force Survey, Source:Philippine Statistics Labor Force Survey,Authority Philippine Statistics Authority 20. 20. In the Philippines In the Philippines including including Mindanao, Mindanao, unemployment unemployment and underemployed ratesand haveunderemployed rates declined over time. From 2008 to have declined over time. From 2008 to 2018, unemployment and underemployment 2018, unemployment and underemployment rates have exhibited a downward trend both nationally and in rates have all island-groups (Figure 27). exhibited a downward At 4.0 percent, trend in 2018, the both nationally unemployment rate wasin and all island-groups lower in Mindanao than (Error! Reference in any source (Figure 28). other island-group not found. ). At 4.0 percent, in 2018, the unemployment rate was lower in Mindanao Meanwhile, in 2018, the underemployment rate for Mindanao stood at 17.6 percent. This was higher than than in in anyLuzon and the other island-group (Error! Reference source not found. ). Meanwhile, in national average of 16.1 percent. Within Mindanao, urbanized areas like Region X (4.1 percent) and Region XI (4.32018, the percent) have underemployment rate for Mindanao stood at 17.6 percent. This was higher than in Luzon and the highest unemployment rates (Table 1). This is to be expected since these regions attract many jobseekers from adjacent the national average of 16.1 percent. Within Mindanao, urbanized areas like Region X (4.1 regions. At the same time, CARAGA (25.4 percent) and Region X (20.8 percent) have the highest underemployment rates. Very high percent) and Region XI (4.3 percent) have the highest unemployment rates (Table 1. Key Labor underemployment rates are a first indicator that the key labor market challenge for the Philippines, including Mindanao, is the lack and Employment Indicators by Mindanao Region: 2018). This is to be expected since these of quality jobs. regions attract many jobseekers from adjacent regions. At the same time, CARAGA (25.4 Figure 27. Unemployment and Figure 28. Unemployment and percent) and Region X (20.8 percent) have the highest underemployment rates. Very high Figure 27. Underemployment Figure 27. Unemployment Unemployment and Rate, Philippines: and Underemployment Underemployment Figure Figure 28. 28. Rate Unemployment Unemployment byUnderemployment and Island-Region: andfor the Rate underemployment rates are a first indicator that the key labor market challenge Underemployment Rate, Rate, Philippines: Philippines: 2008-2018 Underemployment by 2014-2018 Rate by Island-Region: Island-Region: 2014-2018 Philippines, including Mindanao, is the lack of quality jobs. 25% 25% 2014-2018 25% 25% Underemployment Rate 20% 20% Underemployment Rate 20% 20% 15% 13 Santiago, 15% International Cooperation Agency. C. 2008. Philippines: Country Gender Profile. Japan15% 10% 15% 10% 10% 15 Underemployment 5% Rate 10% Underemployment 5% 5% Rate 0% 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 5% 0% Philippines Luzon Visayas Mindanao 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Underemployment Rate Unemployment Rate Philippines Luzon Visayas Mindanao Labor Force Survey, Philippine Statistics Authority Source: 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Underemployment Rate Unemployment Rate Source: Labor Force Survey, Philippine Statistics Authority 14 Table Santiago, C. 2008. Philippines: 1. Key Country Gender Profile. Japan International Cooperation Agency. Source: Labor Force Survey, Philippine Statistics Authority R egion Labor Force Unemployment Underemployment 11 www.worldbank.org Table 1. Key Par ticipa tion Rate Rate Rate R egionRegion IX Labor Force56.3 4.1 Unemployment 18.9 Underemployment Philippines Luzon Visayas Mindanao 0% Underemployment Rate Unemployment Rate Investing in Skills 2010 2011Inclusive to Promote 2008 2009 2012 2013 Growth in 2014 2015 Mindanao 2016 2017 2018 Source: Labor Force Survey, Philippine Statistics Authority Table 1. Table 1.Key KeyLabor and Employment Indicators by Mindanao Region: 2018 R egion Labor Force Unemployment Underemployment Participation Rate Rate Rate Region IX 56.3 4.1 18.9 Region X 66.3 4.1 20.8 Region XI 60.3 4.3 15.4 Region XII 61.7 3.9 17.0 CARAGA 64.4 4.0 25.4 ARMM 46.6 3.7 8.4 Source : Labor Source: Labor Force Survey, ForceSurvey, Philippine Philippine Statistics Statistics Authority. Authority. 21. 21. The proportion The proportion of youth and youngof youth adults and who aged 16-24 young adultsin aged are neither 16-24or who employment areis neither education in high in Mindanao. In employment or education is high in Mindanao. In 2018, 22 percent of youth and young 2018, 22 percent of youth and young adults aged 16-24 in Mindanao were NEET (Figure 29). This was a higher share than in any adults otheraged 16-24 in island-regions. should be of were It Mindanao neither as grave concern education inprolonged institutions periods nor in spent neither employed nor This education (). was training may a not only higher increase risk inin share than the poverty any the termisland-regions. other short It should but also damage labor market be of grave prospects concern in the medium asand prolonged periods long run. In fact, compared regionsneither to all spent in education in the Philippines, somenor partstraining not among mayhave of Mindanao only increase the highestthe poverty shares risk in the of out-of-school short youth term (OSY) (Figure 30). but also damage labor market prospects in the medium and long run. In fact, compared to all are OSY. Nationwide, this share is highest in ARMM where 36 percent of all 16-24 years old (or 270,000 youth and young adults) Among other regions in Mindanao, the share is also elevated in Region XII (at 34 percent) and Region X (at 25 percent). The most regions in the Philippines, some parts of Mindanao have among the highest shares of youth and common reasons that youth and young adults give for not attending school or being employed are marriage or family matters, a lack ofyoung personaladults who interest, andare cost in neither the high school nor of education employed or other financial (Figure concerns.”30). Nationwide, this share is highest in ARMM where 36 percent of all 16-24 years old (or 270,000 youth and young adults) Figure 29. are currently Youth neither inUnemployment, Figure 30. school nor gainfully employed. Magnitude Among and other Share of regions in OSYs Mindanao, the Figure 29. Youth Figure 29. Underemployment Unemployment, andYouth NEE Underemployment Unemployment, Rates Figure (Age Figure 30. 16-24) 30. Magnitude by Region: Magnitude and by(at 34 percent) and Region X (at 25 percent). and 2017 ShareShare of (Age of OSYs OSYs 16-24) share is also and elevated in Underemployment Region NEE Rates by Island-region: and NEE XII2018 Rates by (Age 16-24) 2017 by Region: by Region: 2017The most common reasons that youth and young adults give 500,000for not attending school or being employed 40% 500,000 40% are marriage 30% 30% or family matters, a lack of personal interest, and the high cost of education or other financial 25% concerns. 400,000 30% 400,000 25% 30% 20% 300,000 20% 300,000 20% 15% 20% 15% 200,000 16 200,000 10% 10% 10% 100,000 10% 100,000 5% 5% 0% 0 0 0% 0% 0% ARMM Region 1 Region 2 11 Region23 10 NCR 5 CAR7 Region58 Region 12 Region79 Region 6 CARAGA CAR Region4B Region4A ARMM Luzon Visayas ARMM Mindanao Mindanao NCR 1 Region11 3 10 8 Region 12 9 Region 6 CARAGA Region 4B 4A Luzon Visayas ARMM Region Region Region Region Region Region Region Region Region Region Region Region Region Youth unemployment rate Youth unemployment rate Youth underemployment rate Youth underemployment rate OSY (age OSY (age Youth NEE Youth NEE 16-24) 16-24) Source: Labor Force Survey and Annual Poverty Indicators Survey, Philippine Statistics Authority Note: Youth is defined as persons aged 15 to 24. Computation of NEE follows the formula of the International Labor Organization. Source Source: Labor : Labor Force Force Survey Survey and and Annual Annual Poverty Poverty Indicators Indicators Survey, Philippine Survey, Philippine Statistics Authority Statistics Authority Note: Note: Youth Youth is is defined asdefined personsas persons aged aged 15 to 24. 15 to 24. Computation Computation of NEE of NEE follows follows the theof formula formula of the International the International Labor Labor Organization. Organization. 22. Youth unemployment and underemployment rates are also high in Mindanao. Eighteen percent of the 5 million youth and young adults aged 15-24 in Mindanao characterized are underemployed (Figure 29). This is a higher rate than the island-region’s youth 22. unemployment 22. Youth Youth rate unemployment at 11 percent unemployment or around underemployment andyouths. and196,000 underemploymentAt the same time,are rates rates it is worth alsoare also noting high that inhigh while in underemployment Mindanao. Mindanao. is prevalent Eighteen among mostpercent age of groups the in 5 million Mindanao, youth and unemployment young is adults largely a aged problem of Eighteen percent of the 5 million youth and young adults aged 15-24 in Mindanao characterized15-24 the in youth Mindanao and young characterized adults. In the island, the youthare underemployed unemployment rate is more(Figure 29). than twice overallis theThis a higher unemployment rate rate. than Unlike the Mindanao, island- youth unemployment rate are underemployed (Figure 29). This is a higher rate than the island-region’s youth youth region’s is higher than underemployment unemployment rate rate at ARMM. Possible in percent 11 or explanations around 196,000 include youths.theAt jobthe search same behavior time, and it iscareer worthaspirations noting of unemployment youth young andthat adults at 11 ratebut alsopercent a orgap potential around 196,000 between youths. employers’ At the demands and same time, graduates’ it is worth noting skills. while underemployment is prevalent among most age groups in Mindanao, unemployment is that while underemployment is prevalent among most age groups in Mindanao, unemployment is largely a problem of the youth and young adults. In the island, the youth unemployment rate is largely a problem of the youth and young adults. In the island, the youth unemployment rate is more than twice the overall unemployment rate. Unlike Mindanao, youth unemployment rate is more than twice the overall unemployment rate. Unlike Mindanao, youth unemployment rate is higher than underemployment rate in ARMM. Possible explanations include the job search than underemployment higher behavior of youth Possible rate in ARMM. and career aspirations adults but include explanations and young the job search also a potential gap between 12 behavior and career aspirations of youth and employers’ demands and graduates’ skills young . adults but also a potential WORLD gap between BANK SOCIAL PROTECTION POLICY NOTE employers’ demands and graduates’ skills . 23. Almost half of all workers in Mindanao are engaged in vulnerable work but this share has been decreasing. In 2018, 44 percent of workers in Mindanao were vulnerable workers, defined as the self-employed (mainly consisting of low-level producers of goods and services such as ambulant vendors, jeepney drivers and domestic helpers) and the unpaid family workers (common in farming and retail trade) (Figure 31). Both types of workers are not covered by labor laws and standards, making them highly vulnerable. One manifestation of the vulnerability is the lack of adequate social protection from various risks, particularly, health- and unemployment-related risks. The share of these vulnerable workers was higher in Mindanao than in Luzon or Visayas. A comparison of different regions in Mindanao yields that the share of vulnerable work is highest in Region IX and particularly in ARMM, where 73 percent of workers are vulnerable (Figure 32). More encouragingly, over the four-year period from 2014-2018, thereprogress was was was in in progress progress in reducing reducing reducing the the share share the share of vulnerable of vulnerable of work vulnerable work across across workwhich Mindanao across Mindanao had Mindanao beenwhich had which 53 percent as been had53 recently been 53 as 2014. The percent as recently percent largest decrease was as 2014. as recently seen as in the The 2014. share largest of The largest unpaid decrease decrease was seen family workers. was inseen in theof the share unpaid share family family of unpaid workers. workers. Figure Figure 31. 31. Distribution Distribution of Employed of Employed by by Figure 32. Distribution Figure of Employed 32. Distribution by of Employed by Class Figure of 31. Worker Class and of Worker Distribution of by Island-region: and Employed by by Class of Worker ClassFigure of Island-region: Class Worker ofDistribution 32. and by and Worker Island-Region: by Island-Region: of Employed by Class of Worker 2014 and by and2014 2018 Island-region:and 2018 2014 and 2018 2018 and 2018 by Island-Region: 2018 100% 100% Mindanao Mindanao 80% 80% IX IX X X 60% 60% XI XI 40% 40% XII XII CARAGA CARAGA 20% 20% ARMM ARMM 0% 0% 0% 20% 0% 20% 40% 40% 60% 60% 80% 100% 80% 100% 2014 2014 2018 2018 2014 2018 2014 2018 2014 2014 2018 2018 Luzon Luzon Visayas Visayas Mindanao Mindanao Wage and Salary and Salary Self-employed WageWorkers Workers Self-employed WageWorkers Wage and Salary Workers Self-employed and Salary Self-employed Employer Employer Unpaid Unpaid family workers family workers Employer Employer Unpaid Unpaid family workers family workers Source: : Force Labor Source Labor Survey, SourceForce Philippine : Labor ForceStatistics Survey, Survey,Authority PhilippinePhilippine Authority Statistics Statistics Authority 24. Many workers in Mindanao are engaged in elementary occupations. In 2018, three out of 10 workers in Mindanao were engaged in elementary occupations. These occupations are generally associated with unskilled labor and include jobs such as street 24. vendors, Many 24. Many workers construction in cleaners, workers workers, are helpers, in Mindanao Mindanao domestic engaged are engaged andin elementary farm in elementary hands occupations. (Figure occupations. 33). At In 2018, 22 percent In three 2018, of overall three employment, out of agricultural, skilled outworkers 10 in Mindanao of 10 forestry, workers andinfisherywere Mindanao engaged workers in widespread wereengaged were also in elementary elementary occupations. occupations. in Mindanao. These This was occupations These occupations consistent with the are are island-region’s generally associated generally with associated unskilled with labor unskilled labor and and include include jobs jobs such as street such as vendors, street construction vendors, construction relatively large agriculture sector. While Mindanao has a higher share of workers in elementary occupations and skilled agriculture workersworkers, workers, cleaners, than Luzoncleaners, anddomestic domestic Visayas, helpers, the helpers, and prevalence and hands farm of managers farm hands (Figure or professionals 33). (Figure At33). in Mindanao 22isAt percent 22 than lower percentoverall ofLuzon of but overall equal with Visayas.employment, employment, skilled Meanwhile, agricultural, workersagricultural, skilled half of in ARMM forestry, and forestry, are engaged fishery in skilled workers fishery andagricultural, workers were forestry andalso were fisherywidespread also widespread occupations. in in Mindanao. Mindanao. This This was was consistent consistent with the with island- the region’s relatively island-region’s large agriculture relatively sector. sector. large agriculture While While Mindanao has Figure Mindanao a has Figure higher 33. Distribution 33. Distribution a higher share share of ofofworkers of Employed workers Employed by by in Occupation Occupation in elementary elementary and andIsland-Region: Island-Region: occupations occupations 2018 and and skilled 2018 agriculture skilled agriculture workers than Luzon workers and Visayas, than Luzon the prevalence and Visayas, the prevalence of managers of managers or professionals or professionals in Mindanao in Mindanao is is 100% Armed Forces lower lower than than Luzon Luzon but equal butwith equal with Visayas. Visayas. Meanwhile, Meanwhile, half of half workers of workers in ARMM in are ARMM Elementary Occupations engaged are in engaged in agricultural, skilled skilled 80% agricultural, forestry and fishery forestry occupations. and fishery occupations. Plant and Machine Operators and Assemblers Craft and Related Trades workers 60% Skilled Agricultural, Forestry and Fishery Workers Service and Sales Workers 40% Clerical Support Workers Technicians and associate professionals 20% Professionals Managers 0% Luzon Visayas Mindanao ARMM Survey, Force Force Labor Source: Source: Labor Survey, Philippine Philippine Statistics AuthorityStatistics Authority 25. Low wages are more common in Mindanao and Visayas than in Luzon. When www.worldbank.org 13 workers’ wages are classi ed into ve di erent wage groups (very low, low, middle, high, very high), 31 percent of workers in Mindanao and in Visayas have either very low or low wages – Investing in Skills to Promote Inclusive Growth in Mindanao 25. Low wages are more common in Mindanao and Visayas than in Luzon. When workers’ wages are classified into five different wage groups (very low, low, middle, high, very Figure high), Figure 34. Wage31 percent 34. Distribution Wage of workers Distributionin Mindanao and in by Island-Region: Visayas by Island-Region: 2018 2018have either very low or low wages – defined as wages less than 50 percent of the median wage and less than 67 percent of the median wage, respectively (Figure 34). 100% 100% In comparison to Luzon where only 17 percent of workers earn low or very low wages, respectively, this is a considerably higher share of low-wage work. In addition, consistent with the high share of vulnerable work in terms of class of worker and occupation, 80% 80% 44 percent or nearly half of workers in ARMM receive low pay. 60% 60% Figure 34. Wage Figure 34. Wage Distribution Distribution by Island-Region: by Island-Region: 2018 2018 100% 40% 40% 80% 20% 20% 60% 0% 0% Luzon Luzon Visayas Visayas Mindanao Mindanao ARMM ARMM 40% low Very lowVeryLow Low Middle Middle High Very High High Very High 20% Source: Source: Labor Force Force Survey, LaborSurvey, Philippine Statistics Statistics Philippine Authority Authority Note:Low: Note: Very Low: Very less less than 50%thanof 50% of median median wage, less wage, Low: Low:than less 67% 67% thanof of median median wage, Middle: wage, Middle: less than 150% less 150% of than of 0% median median wage,less wage, High: High: than less than 3the 3 times median times the median wage, Very wage, Very3 High: times3or High: times higher or higher than median than median wage. wage. Luzon Visayas Mindanao ARMM 26. 26. Agriculture Agriculture provides provides many many jobs Very jobs low in in Middle Mindanao Low Mindanao but younger High but younger Very High workersworkers are increasingly are increasingly active Source: active Labor in services Force in services Survey, and Philippine industry. and industry. Statistics In Authority 2018, Source: Labor Force Survey, Philippine Statistics Authority In 2018, two-fifths two-fifths (40 percent) (40 percent) of of workers in workers Mindanao in Mindanao were were Note: Very Low: less than 50% of median wage, Low: less than 67% of median wage, Middle: less than 150% of median wage, High: less than 3 times the median in the wage, Very in the agriculture High:Very Note: agriculture 3 times Low: sector less or higher (). sector than than In 50%wage. median (). ARMM, two-thirds two-thirds ARMM, of median wage, Low: less than 67% of median wage, Middle: less than 150% These In of nearly nearly of workers are workers in the are insame the sector. same sector. These of median workers workers wage, High: are considered less are considered than 3 times vulnerable the median vulnerable given wage, the given Very High: sector’s the 3 times sector’s higher than to orsusceptibility susceptibility median towage. external shocks external and and shocks economic 26. Agriculture economic downturns. provides downturns. many jobsHowever, However, in Mindanao over time, time, but over younger aworkersa lower lower share are share of young increasingly of young workers active workers in services andengaged has has engaged industry. Inin 2018, in two- 26. agriculture Agriculture agriculturework work while provides while a higher a many higher share jobs share of in Mindanao young of workers young but workershas younger has taken upworkers taken work fifths (40 percent) of workers in Mindanao were in the agriculture sector (Figure 35). In ARMM, nearly two-thirds of workers are up work in are services inincreasingly and services and inactive industry. industry. the same insector. services The The share These and share of workers workersindustry. ofareworkers agesIn ages considered 2018, 20-29 two-fifths in 20-29 vulnerable the inservices the given (40 the percent) sector services sector’s sector of increased workers increased susceptibility from to in 49 from externalMindanao percent 49 percent shocks and were in in economic in the2014 2014 downturns. agriculture to 51to However,percent 51over sector percent in 2018 time, (). ain In2018 lower ARMM, (Figure (Figure share 36). of nearly young 36). The two-thirds share Thehas workers of share ofofworkers young engaged in workers young are in workers agriculture in the the work in same industry the while sector. industry a higher These sector share sector of young workers workers likewise are increased has taken increased likewise considered up workby infour vulnerable services four and by percentage industry. percentage given points The to the share points 17to ofsector’s 17workers percent in ages percent susceptibility 2017. in20-29Over 2017. theservices the in Over to theexternal same sector time same increased span, time shocks the from span, and the 49 economic percent in shareshare 2014 downturns. of young to 51 of young percent workers However, in workers2018 (Figure in agriculture over 36). in agriculture time, The share declined a lower of declined young by six share workers bypercentage ofin six percentageyoung the points. workers industry sector points. has likewise Nevertheless, Nevertheless, engaged increased at 32at 32 in by four percentage agriculture points percenta to 17while work 2017. Over in higher sharethe same time span, of young the share workers has of taken young workers up workin agriculture services in youth declined by six percent percent of jobsof for jobs youth for youth in 2018, agriculture in 2018, agriculture remainedremainedthe second the second largest largest employer employerof and and of youth and percentage industry. points. The Nevertheless, share of workers ages 20-29 in the services sector increased from 49 percent in of at 32 percent of jobs for youth in 2018, agriculture remained the second largest employer young adults. young youth and young adults. adults. 2014 to 51 percent in 2018 (Figure 36). The share of young workers in the industry sector likewise Figure increased 35. Figure Figure 35. 35. Distribution Distribution four byDistributionpercentage of Employed of Employed Employed of Sector by points by and by percent to 17 Figure Figure Figure 36.in 36. 2017. 36. Distribution Distribution Over Distribution ofEmployed ofthe same of Employed time by Employed by byand the span, Sector share of young Sector andworkers Sector byandIsland-region: by by Island-region: 2018 in agriculture Island-region: 2018 declined 2018 by six percentage Sector Sector and by Age and points. by Age Group: by Age Group: 2018 Nevertheless, Group: 2018 2018 at 32 percent of jobs for youth in 2018, agriculture remained 100% 100% 100% 100% the second largest employer of youth and young adults. 80% 80% 80% 80% Figure 35. Distribution of Employed by Figure 36. Distribution of Employed by 60%Sector 60% and by Island-region: 2018 60% Sector and by Age Group: 2018 60% 100% 100% 40% 40% 40% 40% 80% 80% 20% 20% 20% 20% 60% 60% 0% 0% 0% 0% 2014 2014 2018 2018 2014 2014 2018 2018 2014 2014 2018 2014 20182018 2014 2018 2014 2014 2018 2018 Luzon Luzon Visayas Visayas Mindanao Mindanao ARMM ARMM 40% 20-29 20-29 30-39 30-39 40-49 40-49 50-59 50-5960+ 60+ 40% Agriculture Agriculture Services Services Industry Industry Agriculture Agriculture Services Services Industry Industry 20% 20% Force Survey, Philippine Statistics Authority. Source: Labor : Labor: Force SourceSource LaborSurvey, Philippine Force Survey, Statistics Philippine Authority Statistics Authority 0% 0% 2014 2018 2014 2018 2014 2018 2014 2018 2014 2018 Luzon Visayas Mindanao ARMM 20-29 30-39 40-49 50-59 60+ Agriculture Industry Services Agriculture Industry Services 20 20 Source: Labor Force Survey, Philippine Statistics Authority 14 WORLD BANK SOCIAL PROTECTION POLICY NOTE B. Labor Market Outcomes and Poverty 27. Poor labor market outcomes, particularly underemployment, are closely linked to poverty. In the Philippines, having a job does not always provide a pathway out of poverty. B. Labor Market Outcomes and Poverty Among different groups of labor market participants, the underemployed, defined as those who to work more wantoutcomes, 27. Poor labor market and not the unemployed hours,underemployment, particularly face are closely highest the to linked poverty. risk of poverty. In the Philippines, This is a job does having because the unemployed are often well-educated not always provide a pathway out of poverty. Among different groups young persons from better-off families looking of labor market participants, the underemployed, defined for jobs as those who want meethours, that more to work professional their and aspirations14 not the unemployed . Athe face highestsnapshot regional that juxtaposes risk of poverty. poverty This is because the unemployed incidence and underemployment rates in 2015 clearly confirms this link ( Error! Reference are often well-educated young persons from better-off families looking for jobs that meet their professional aspirations15. A source regional snapshot not that found.). poverty juxtaposes Underemployment incidence andrates are generally highest underemployment rates in in the 2015regions clearlywith the highest confirms this link (Table 2). poverty incidence – including those in Mindanao – such as CARAGA, Region Underemployment rates are generally highest in the regions with the highest poverty incidence – including XII and Region those in Mindanao X. In Region – such as CARAGA, contrast, and Region X. Inrates XII unemployment are highest contrast, in the regions unemployment rates arewith the lowest highest in the poverty incidence. regions with the lowest poverty While ARMM is a noteworthy exception to this pattern, pursuing inclusive incidence. While ARMM is a noteworthy exception to this pattern, pursuing inclusive growth first and foremost growth and first requires reducing foremost requires reducing in-work in-work poverty, particularly by removing both supply-side and demand-side constraints to quality job creation. and poverty, particularly by removing both supply-side demand-side constraints to quality job creation. Table 2. Poverty, Underemployment, and Unemployment by Region: 2015 Country or Poverty Incidence Underemployment Rate Unemployment Rate Region Philippines 3.9 9.97 6.3 Richest Regions NCR 9.1 18.2 8.5 Region IV-A 11.2 13.5 8.0 Region III 13.1 16.9 7.8 Region I 15.8 11.1 8.4 Region II 19.7 20.8 3.2 Poorest Regions ARMM 53.7 11.1 3.5 Caraga 39.1 26.2 5.7 Region VIII 38.7 31.8 5.4 Region XII 37.3 23.2 3.5 Region X 36.6 24.9 5.6 Mindanao Regions from Richest to Poorest Region XI 22.0 19.0 5.8 Region IX 33.9 18.5 3.5 Region X 36.6 24.9 5.6 Region XII 37.3 23.2 3.5 CARAGA 39.1 26.2 5.7 ARMM 53.7 11.1 3.5 Source: 2015 Family Income and Expenditure Survey and 2015 Labor Force Survey, Philippine Statistics Authority. Source: 2015 Family Income and Expenditure Survey and 2015 Labor Force Survey, Philippine Statistics Authority. 28. In-work poverty 14 is higher in Mindanao than in any other island-region. Given the prevalence of underemployment in Mindanao, Chua, Karl Kendrick; Mylenko, Nataliya; Chaudhury, Nazmul; Figueroa-Geron, Carolina; Hayakawa, Motoky; Enerva, Moira. it is no surprise that 2013. the poverty Philippines incidence Development among Report: employed Creating workers More and Better Jobs(in-work poverty) isDC: (English). Washington, higher in World Bank Group. than other island- Mindanao regions. In fact, the incidence is more than twice as high in Mindanao than in Luzon (Figure 37). Though over the last years in-work poverty has declined in parallel with overall poverty incidence, in 2015 nearly 32 percent of workers in Mindanao lived below the poverty line. Within Mindanao, ARMM, Region X and Region XII have the highest incidence of in-work poverty (Figure 38). 21 15 Chua, Karl Kendrick; Mylenko, Nataliya; Chaudhury, Nazmul; Figueroa-Geron, Carolina; Hayakawa, Motoky; Enerva, Moira. 2013. Philippines Development Report: Creating More and Better Jobs (English). Washington, DC: World Bank Group. www.worldbank.org 15 28. In-work poverty is higher in Mindanao than in any other island-region. Given the 28. In-work poverty is higher in Mindanao than in any other island-region. Given the prevalence of underemployment in Mindanao, it is no surprise that the poverty incidence among prevalence of underemployment in Mindanao, it is no surprise that the poverty incidence among employed employed workers workers (in-work (in-work poverty) poverty) isinhigher is higher in Mindanao than other island-regions. In fact, the in Mindanao than other island-regions. In fact, the Investing in Skills to Promote incidence is moreInclusive than Growth twice asMindanao high in Mindanao than in (Figure Luzon 37). Though 37). over incidence is more than twice as high in Mindanao than in Luzon (Figure Though the over the last years in-work poverty has declined last years in-work poverty has declined in parallel with overall poverty incidence, in 2015 nearly nearly in parallel with overall poverty incidence, in 2015 32 percent 32 ofpercent workers workers of in Mindanaoin Mindanao lived belowlived thebelow the line. poverty poverty Within Mindanao, line. Mindanao, Within ARMM,ARMM, Region XRegion and X and Region Region XII have XII the have highesttheincidence highest incidence of in-work in-work (Figure of poverty (Figure 38). poverty38). Figure 37. Poverty Incidence among Population and Figure 38. Poverty Incidence among Population and Figure Figure 37. Poverty37. Poverty Incidence Incidence among among Figure Figure 38. 38.Incidence Poverty Poverty Incidence among among Employed Workers Population Population by Island-region: and and Employed Employed Workers by Population Employed Workers by Population Workers and Employed and Employed by by Mindanao Workers Workers byRegion: 2012 and 2015 Island-region: Island-region: 2012 and 2015 2012 and 2015 Mindanao 2012 Mindanao and Region: 2012 2015 Region: and 2012 2015 and 2015 50% 50% 60% 60% 50% 50% 40% 40% 40% 40% 30% 30% 30% 30% 20% 20% 20% 20% 10% 10% 10% 10% 0% 0% 2012 2015 0% 2012 2015 2012 2015 2012 2015 0%2012 2015 2012 2015 2012 2015 2012 2015 2012 2015 2012 2015 Visayas 2012 2015 2012 2015 IX 2012 X 2012 2015 XII 2015 XI 2012 2015 2012 2015 CARAGA 2012 2015 2012 2015 ARMM Luzon Mindanao IX X XI XII CARAGA ARMM Luzon Visayas Mindanao Poverty incidence among Population Poverty incidence among Population Poverty Poverty Incidence incidence among among Employed Population Workers Poverty Poverty Incidence amongincidence among Employed Population Workers Poverty Incidence among Employed Workers Poverty Incidence among Employed Workers Source: Family Income and Expenditure Survey-Labor Force Survey 2015, Philippine Statistics Authority Source: Family Income and Expenditure Survey-Labor Force Survey 2015, Philippine Statistics Authority. Source: Family Income and Expenditure Survey-Labor Force Survey 2015, Philippine Statistics Authority 29. The working poor in Mindanao are likely to be low-educated, a wage worker and 29. The working poor in Mindanao are likely to be low-educated, a wage worker and self-employed. Across all island-regions, the self-employed. Across all island-regions, the incidence of in-work poverty is associated low with worker incidence of29.in-work The working poverty poor with is associated in Mindanao low levels of are likely educational to be (Figure 39).aIn low-educated, attainment wage Mindanao, and of 64 percent educational attainment levels of self-employed. Across all (). In Mindanao, island-regions, 64 percent the incidence of working in-work ofworkers poor are poverty workers is education associatedwith low withsufficiently working poor are workers with primary education levels of or less.primary educational education Conversely, attainment most or less. Conversely, (). workers In Mindanao, with64 most tertiary percent with education of tertiary workingattainpoorsufficiently are attain workers with productive high-paying and and productive work. The high-paying share work. Theof the working share of thepoor among this working poor group amongis 2 percent. In terms group thiseducation is 2 of class of workers, wage percent. workers and primary the education self-employed eachor less. comprise Conversely, two-fifths of most the workers working poor with in tertiary Mindanao. The share of attain the sufficiently self-employed among of class of and In terms productive workers, wage workers high-paying work. and The the self-employed share of the working each poor comprise among two-fifths this group is of percent. 2 of working allthe poor working is higher poor in in Mindanao than in other island-groups (Figure 40). In ARMM, more than three-fourths the working poor In terms are engaged ofMindanao. class of workers, in self-employment The share and unpaid wage of the self-employed workers family work. and the self-employed Self-employed among all working each 60 poor is higher comprise two-fifths of poor, in Mindanao than in other island-groups (Figure 40). In ARMM,workers more than comprised percent three-fourths ofof the working the followed the by unpaidworking family poor workers in Mindanao. that The covered 28 percent.share of For the self-employed the most among part, self-employment all working reflects lack poor is higher of opportunity rather working poor are engaged in self-employment and unpaid family work. Self-employed workers than in Mindanao entrepreneurial drive. than in other island-groups (Figure 40). In comprised 60 percent of the working poor, followed by unpaid family workers that covered 28 ARMM, more than three-fourths of the percent. working Figure 39. Figure For poor Distribution the 39. Distribution mostare engaged part, in self-employment of Working of Working self-employmentPoor Poor and Figure reflects unpaid 40. Distribution Figure lack family 40. work. of Distributionof Working opportunity Self-employed of Working rather Poor than workers Poor by by comprised 60 by Educational by Educationalpercent of the working poor, followed Class by Class of unpaid of Worker family Worker and and by workers by that Island-Region: covered Island-Region: 28 entrepreneurial Figure 39. drive. Distribution of Attainment Attainment Working Poor and by and by by Educational Figure 40. Distribution of Working Poor by Class of percent. For the Island-Region: Island-Region: Attainment most part, 2015 2015 and by Island-Region: self-employment 2015 reflects lack of 2015 opportunity 2015 Worker and by Island-Region: 2015 rather than entrepreneurial drive. 60% 60% 70% 70% 50% 50% 60% 60% 50% 50% 40% 40% 40% 40% 30% 30% 30% 30% 20% 20% 20% 20% 22 10% 10% 10% 10% 0% 0% 22 0% 0% Wage Workers Wage Workers Self Employed Self Employed Employer Employer Unpaid family Unpaid family Primary Primary Below Below Incomplete Incomplete Secondary Secondary Incomplete Tertiary Tertiary Incomplete Primary Primary Secondary Secondary Tertiary Tertiary workersworkers Visayas Visayas Luzon Luzon Mindanao Mindanao ARMM ARMM Visayas Visayas Luzon Luzon Mindanao Mindanao ARMM ARMM Source: Family Income and Expenditure Survey-Labor Force Survey 2015, Philippine Statistics Authority. : Family Source Source Income : Family and Expenditure Income Survey-Labor and Expenditure Force Force Survey-Labor Survey Philippine 2015, 2015, Survey Philippine Statistics Statistics Authority Authority 30. 30.Close to half Close of the to half the underemployed of underemployed in Mindanao in Mindanao are working are working poor. poor. In Mindanao, In Mindanao, 41 41 percent percent of underemployed of underemployed workers workers are classified are classified as working as working poor. This This poor. is a larger is a larger share than than share in in Luzon Luzon and Visayas and Visayas where 22 percent where 22 percent and 36 andpercent 36 percent of underemployed of the the underemployed are working are working poor, poor, respectively respectively (Figure (Figure 41). 41). Within Within Mindanao, Mindanao, ARMM, ARMM, and Region and Region XIII XIII havehave the largest the largest shares of of shares 16 working working poorpoor among the underemployed, among at 53at the underemployed, percent and 48 53 percent andpercent, respectively 48 percent, (Figure respectively 42). 42). (Figure WORLD BANK SOCIAL PROTECTION POLICY NOTE Figure Figure 41. Distribution 41. Distribution of Working of Working Poor Poor Figure Figure 42. Distribution 42. Distribution of Working of Working Poor Poor Luzon Visayas Luzon Visayas Mindanao Mindanao ARMMARMM Luzon Luzon Visayas Visayas Mindanao Mindanao ARMM ARMM Source Source : Family : Family Income Income andand Expenditure Expenditure Survey-Labor Survey-Labor Force Survey Force Survey Statistics Statistics 2015, Philippine 2015, Philippine Authority Authority 30. 30. Close Close toto half half of of thethe underemployed underemployed in Mindanao in Mindanao are working are working poor. In poor. In Mindanao, Mindanao, 41 41 percent percent of of underemployed underemployed workers workers are are classified classified as as working working poor. poor. This is This a is a larger larger share thanshare in than in 30. Close to half of the underemployed in Mindanao are working poor. In Mindanao, 41 percent of underemployed workers are Luzonand Luzon and Visayas Visayas where 22 where percent and 36 percent of the underemployed are working poor, classified as working poor. This is 22 share and percent a larger 36 than in percent Luzon of the and Visayas underemployed where 22 percent andare working 36 percent poor, of the underemployed respectively respectively (Figure (Figure 41).41). Within Within Mindanao, Mindanao, ARMM, ARMM, and and Region Region XIII XIII have thehave theshares largest largest of shares of are working poor, respectively (Figure 41). Within Mindanao, ARMM, and Region XIII have the largest shares of working poor working working poor poor among among the the underemployed, underemployed, at 53at 53 percent percent 48and and (Figure 48 percent, respectively (Figure 42). percent, among the underemployed, at 53 percent and 48 percent, respectively 42). respectively (Figure 42). Figure 41. Distribution of Working Poor Figure 41. Distribution of Working Poor Figure Figure 42. Distribution 42. Distribution of Working of Working Poor Poor Figure 41. Distribution among of Working Underemployed byPoor among Island-Region: Figure among42. Underemployed Distribution of Working Poor among by Mindanao among Underemployed by Island-Region: among Underemployed by Mindanao Underemployed by Island-Region: 2015 2015 2015 Underemployed Region: Region: 2015 by Mindanao Region: 2015 2015 50% 50% 60% 60% 50% 50% 40% 40% 40% 40% 30% 30% 30% 30% 20% 20% 20% 20% 10% 10% 10% 10% 0% 0% 0% 0% Luzon Luzon Visayas Visayas Mindanao Mindanao IX IX X X XI XI XII XII CARAGA CARAGA ARMM ARMM Source Source: Source Family : Family : Family Income Income Income and andand Expenditure Expenditure Expenditure Survey-Labor Survey-Labor Survey-Labor Force Force Survey 2015, Force Survey Survey Philippine 2015, 2015, Philippine Statistics Statistics Statistics Philippine Authority. Authority Authority 31. 31. The The level level ofof education education ofof workers workers inin Mindanao Mindanao lagsbehind lags behind Luzon Luzon and and Visayas, Visayas, and and hasbarely has improvedin barelyimproved inrecent recentyears. years.In 2018,more In2018, morethan thanone third(35 onethird percent)of (35percent) workersin ofworkers in Education C. Mindanao Mindanao C.C. andhadLabor hadcompleted Education Education Market Outcomes completed andandLabor elementary elementary Labor Market Market education,and education, Outcomes Outcomes andanother anotherthirdthird(38(38percent) percent)reached reachedhigh high (Error! Reference school (Error! school Reference sourcesource not found. not found. ).). InIn contrast, contrast, just one fifth just one of workers fifth of workers were were 31. The level of education of workers in Mindanao lags behind Luzon and Visayas, and has barely improved in recent years. In college-educated.In college-educated. comparison,in Incomparison, Luzonand inLuzon andVisayas Visayasthe majorityof themajority workerswere ofworkers wereat least atleast 2018, more than one third (35 percent) of workers in Mindanao had completed elementary education, and another third (38 high-school-educated high-school-educated and and more more than than aa fifth fifth ofofworkers workers have have a a college college education. education. This This lackluster lackluster 23 of workers were college-educated. In comparison, in Luzon and percent) reached high school (Figure 43). In contrast, just23one fifth trend trend remains even remains when ARMM, even when ARMM, where where educational educational outcomes outcomes are worse than are worse average, is than average, Visayas the majority of workers were at least high-school-educated and more than a fifth of workers have a college education. This is excluded. excluded. The The workforce workforce ofof most most regions regions inin Mindanao Mindanao are are dominated dominated byby high-school-educated high-school-educated lackluster trend remains even when ARMM, where educational outcomes are worse than average, is excluded. The workforce of workers, workers, most regions except except forare for in Mindanao Region Region IX IX dominated byand and ARMMwhere ARMM high-school-educated where there there workers, are are except more moreworkers for Region workers IX and ARMM with with where elementary elementary there are more education education workers with than than with with elementary highschool high school education education. education. than with high schoolMeanwhile, Meanwhile, education. Region Region Meanwhile, XIXI Region and XIand andCARAGA CARAGA CARAGA Region Region Region have thehave have highest the the highest highest percentage percentage of percentage of college-educatedof college-educated college-educated workers workers (Figure 44). workers (Error! (Error! Reference Reference source source not not found. found. ).). Figure Figure 43. 43. Distribution Distribution of of Employed Employed byby Figure Figure 44. 44. Distribution Distribution of of Employed Employed by by 43. Figure Highest Distribution Highest Grade GradeofCompleted Employed Completed Highest by and and by byGrade Figure 44. Distribution Highest Highest Grade Grade of Employed Completed Completed by Highest and and byby Grade Completed and by Island-Region: Island-Region: Island-Region: 2018 2018 2018 Completed Mindanao Mindanao and by Mindanao Region: Region: 2018 Region: 2018 2018 100% 100% Mindanao Mindanao 80% 80% IX IX XX 60% 60% XI XI 40% 40% XII XII 20% 20% CARAGA CARAGA 0% 0% ARMM ARMM Luzon Luzon Visayas Visayas Mindanao Mindanao Mindanao Mindanao (no (no ARMM) ARMM) 0% 0% 20% 20% 40% 40% 60% 60% 80% 80% 100% 100% No No grade grade completed completed Elementary Elementary High High School School No No grade grade completed completed Elementary Elementary High High School School Post Post Secondary Secondary College College Post Post Secondary Secondary College College Source: Labor Source Source: Force Labor Survey, : Labor ForcePhilippine Force Survey, Statistics Survey, Authority Philippine Philippine Statistics Statistics Authority Authority Note: Elementary Note: Note: includes includes Elementary Elementary SPED undergraduates includes SPED SPED and graduates. College undergraduates undergraduates andand includes graduates. graduates.post baccalaureate College College undergraduates includes includes post post and graduates. baccalaureate baccalaureate undergraduates undergraduates and and graduates. graduates. www.worldbank.org 17 32. 32. Educationprovides Education providesan avenuefor anavenue forbuilding buildingskills thatimproves skillsthat outcomesfor improvesoutcomes both forboth theindividual the andsociety. individualand society.On Ona asocietal societallevel, level,higher highereducational levelscreate educationallevels anenabling createan enabling Investing in Skills to Promote Inclusive Growth in Mindanao 32. Education provides an avenue for building skills that improves outcomes for both the individual and society. On a societal level, higher educational levels create an enabling environment for investments and innovation that relies on skilled human resource as a key ingredient of employable labor force. On an individual level, education is closely associated with labor market outcomes. On average, workers with higher educational attainment have significantly higher wages than those with little or no education. “In Mindanao, the wage gap between workers with tertiary education and those with primary education amounts to 203 percent, compared to 174 percent nationally” (Figure 45). In fact, significant educational wage premia are not a recent phenomenon but have existed both in Mindanao and the rest of the Philippines throughout the last 15 years. This implies that access to education provides an important pathway to benefit from growth and escaping poverty (Figure 46). Figure 45. Wage Figure 45. Wage Premium over Primary Premium over Primary FigureFigure 46. Rate Rate 46. of of Private Private Returns by Returns by Figure 45. Education Education Wage Premium over Attainment by Educational by Educational Primary Education and and Attainment Figure Educational46. of Private RateLevel Level Educational and byand Returns by Educational Level by Island-Region: Island-Region: Educational byby Attainment by Island-Region: January Island-Region: and 2018 Januaryby Island- 2018 and by Island-Region: 2003-2018 2003-2018 2003-2018 Region: January 2018 30% 30% College Graduate College Graduate 25% 25% 20% 20% Incomplete Incomplete College College 15% 15% High High School School Graduate Graduate 10% 10% 5% 5% Incomplete Incomplete High School High School 0% 0% 2003 2008 2013 2003 2018 2008 2013 2003 2008 2018 2013 2003 2008 2018 2003 2013 2008 2018 2003 2013 2018 2008 2013 2018 0% 0% 100% 50% 100% 50% 150% 150% 200% 250% 200% 250% 300% 300% Elementary High school Elementary High school Tertiary Tertiary Philippines Philippines Luzon Luzon Visayas Visayas Mindanao Mindanao ARMM ARMM Luzon Visayas Visayas Luzon Mindanao Mindanao (without (without ARMM) ARMM) ARMM ARMM Source: Labor Force Survey, Philippine Statistics Authority; 2019 Basic Education Public Expenditure Review Source: Labor: Force Source LaborSurvey, Philippine Force Survey, Statistics Philippine Authority; Statistics 2019 Basic 2019Education Authority; Public Expenditure Basic Education Review Public Expenditure Review Note: Only January 2018 round is used because succeeding rounds adopt exclusively the K to 12 levels, leaving out the HS graduate category. NoteJanuary Note: Only 2018 round : Only January 2018 is round used is used because because succeeding succeeding rounds rounds adopt exclusively the K to adopt exclusively 12 the K to 12 leaving levels, out the out the levels, leaving HS graduate HS graduate category. category. 33. Recent surveys suggest a large skills gap in Mindanao, including ARMM. Covering Mindanao except ARMM, the Skills Toward 33.Employability 33.Recent and Productivity Recent surveys surveys(STEP) suggest survey suggest a large conducted a large to examine skillsskills gap gap in the inrole Mindanao, of various Mindanao, skills including in the includingARMM.labor market ARMM. indicated CoveringCovering large skills constraints in Mindanao. Controlling for other factors, an additional year of education increased earnings by 5 percent Mindanao except Mindanao except ARMM, ARMM, the Skills the Skills Toward Toward Employability Employability and Productivity and Productivity (STEP) survey (STEP) survey in Mindanao in comparison to non-Mindanao areas where it only increases by 3 percent. In addition, compared to the rest of conducted to conducted to examine the examine role the role of of various skills various skills in thein the labor market labor market indicatedindicated the Philippines, neither higher cognitive nor socio-emotional skills seem generally relevant to earnings in Mindanao (Figure large skills large skills 47). constraints constraints This may be in in Mindanao. Mindanao. attributed to the Controlling economy beingfor Controlling more for other factors, other factors, an additional agriculture-oriented an less and additional year of year service-oriented ofas education education in theincreased rest ofincreased the country. earnings by 5 earnings Nonetheless, by the 5 aspercent percent economy in Mindanao in Mindanao gradually in comparison in comparison shifts towards toand services non-Mindanao to non-Mindanao industry, areas cognitive where areas skills it only where and socio-emotionalit increases only increases skills would be by percent. 3 by 3 percent. increasingly Foraddition, In addition, important. In ARMM,compared compared results to Alternative of the to theof rest the rest theof Learning Philippines, the Philippines, System neither (ALS)-ARMM higher neither Survey higher in 2018 cognitivecognitive suggested anor nor similar skills socio-emotional socio-emotional gap. Compared to skillsskills the nationwide generally seem seem average,generally ALS relevantrelevant learners to earnings aged to earnings 16-30 yearsin Mindanao in Mindanao old in ARMM (). This have (). may lower This be scores may in attributed bothbe attributedof assessments cognitive to the (Figure the economy toeconomy 48) and socio-emotional beingbeingmore more skills (Figure agriculture-oriented 49). agriculture-oriented and less and service-oriented less service-oriented as in as the the of inrest the rest of the country. Figure country. 47. Wage Nonetheless, Nonetheless, asDifferences the as economy Associated the economy gradually with gradually shifts Socio-emotional towards shifts towards Skills, services services Cognitive and industry, Skills, and industry, andcognitive cognitive skillsskills socio-emotional and Figure and 47.socio-emotional skillsAssociated Wage Differences skills would Education: would be with be increasingly increasingly2015important. Socio-emotional Skills,important. For Cognitive For ARMM, Skills, and ARMM, results Education: results of the 2015 of the Alternative Alternative Learning Learning System (ALS)-ARMM System (ALS)-ARMM Extraversion Survey in 2018 Survey in 2018 suggested suggested a similar skillsskills a similar gap. gap. tion skills Socioemotional skills Compared Compared nationwide to theto nationwide the Openness average, average, to experienceALS ALS learners learners 16-30 aged aged 16-30 old in years years ARMM old have have in ARMM lowerlower scores in both scores in both assessments assessments of cognitive Decision-making (Error! of cognitive (Error! Reference Reference source not not source found.found. ) and ) and Conscientiousness socio-emotional socio-emotional (Error! (Error! skillsskills Reference Reference Grit source not source found. not found. ). ). Non-Mindanao Agreeableness Mindanao Emotional stability Numeracy Cogni Educa tive Reading Years of education (with SE skills) Years of education (alone) 0 2 4 6 8 10 12 Source: World Bank STEP Household Survey 2015 Note: The STEP survey Source: Worldwas conducted Bank STEPto Household nationally-representative Survey 2015 urban households in the Philippines between August and December 2015. ARMM is not included sample. in theThe Note: STEPSE= socio-emotional. survey was conducted to nationally-representative urban households in the Philippines between August and December 2015. ARMM is not included in the sample. SE= socio-emotional. 18 WORLD BANK SOCIAL PROTECTION POLICY NOTE xasxa Figure 48. Correct Responses (%) of Figure 49. Average ARMM Scores in 0 0 2 2 4 4 6 6 8 8 10 10 12 12 World Source: Source: World Bank STEP Bank Household STEP HouseholdSurvey Survey 20152015 TheThe Note: Note: STEP survey STEP survey waswas conducted conducted to nationally-representative to nationally-representative urban urban in the households households in the Philippines Philippines between between August August December andand 2015. December ARMM 2015. ARMM is not is not included included in the in the sample. sample. SE= socio-emotional. SE= socio-emotional. xasxa xasxa Figure FigureFigure 48. Correct Correct Correct 48.48. Responses Responses Responses (%) of ARMM(%)(%) ALS of of learners Figure Figure Figure 49. 49. 49. Average Average Average ARMMARMM ARMM Scores ScoresScores in in in Socio-emotional ARMM ARMM ALSALS learners learners versus versus Total OSYA: versus OSYA: Total Total OSYA: Socio-emotional Socio-emotional skills versus skills versus Total Total OSYA: skills versus Total OSYA: 2018 OSYA: 0% 0% 50% 50% 100% 100% 0.00 0.00 1.00 1.00 2.00 2.00 3.00 3.00 Numeracy Numeracy skill (1) skill (1) Extraversion Extraversion Numeracy Numeracy skill (2) skill (2) Conscien Conscien tiousness tiousness Reading Reading comprehension comprehension Openness Openness to experience to experience Feel proud Feel proud as Filipino as Filipino Independence Independence Day Day tional EmoEmo stability tional stability NatiAnthem National onal Anthem Agreeableness Agreeableness Competency Competency in in use of use of resources resources (1) (1) Grit Grit Competency Competency in in use of use of resources resources (2) (2) Cri Critical thinking tical thinking test test Decision Decision making making BARMM BARMM 16-30) (age (age 16-30) Nationwide Nationwide 16-30)* (age (age 16-30)* BARMM BARMM 16-30) (age (age 16-30) Nationwide Nationwide 16-30)* (age (age 16-30)* Source Source: : World : World Source World Bank BankBank ALS-ARMM ALS-ARMM ALS-ARMM Survey 2018 Survey Survey20182018 Note: Note IV. provinces All Note : All except : All Employment and Training Programs for Tawi-Tawi provinces provinces except were except for for covered Tawi-Tawi Tawi-Tawiand the fieldwork werewere was undertaken covered covered andand between fieldwork the the November fieldwork waswas undertaken and December undertaken 2018. between between OSYA are Out-of-school November November andand Youths and Adults 2018. December December of age 16-30. 2018. OSYA ARMM OSYA are has are been identified Youths Out-of-school Out-of-school as BARMM Youths with and theAdults and signing Adults of of ofBangsamoro age age 16-30. Organic ARMM 16-30. ARMM Law hasin 2018; July been has been ARMM identified and as BARMM identified BARMM as BARMMwill be used interchangeably in this study. with A. the with the Overview signing signing of Bangsamoro Organic of Bangsamoro Law Organic Law in July in July 2018; ARMM 2018; andand ARMM BARMM BARMM willwill be used interchangeably be used in this interchangeably in this study. study. IV. Employment and Training Programs 34. Labor market policies and programs can generally be divided into two categories: A. Overview labor regulations and employment programs 15 . Labor regulations are meant to protect workers against risks arising from imperfections in the labor market while employment programs are policies 34. Labor market meantand toprograms address can labor into generally be divided immediate two categories: demand labor regulations and supply problems employment andalso arisingprograms from . 16 Labor regulations are meant to protect workers against risks arising from imperfections in the labor market while employment imperfections in the labor market (Figure 50). This section focuses on the second category of programs are meant to address immediate labor demand and supply problems also arising from imperfections in the labor market This market labor (Figure 50). policies section focuses and on the programs second categoryand assesses of labor marketthe coverage policies and performance and programs of coverage and assesses the variousand employment programs in Mindanao. performance of various employment programs in Mindanao. Figure 50. Hierarchy of Selected Labor Market Policies and Programs Figure 50. Hierarchy of Selected Labor Market Policies and Programs Labor market policies and programs 26 26 Labor Employment regulations programs Direct Job Employment Training Creation facilitation programs programs services Public Technical - Vocational infrastructure Education and programs Training Youth bridging Alternative Learning programs System Livelihood assistance programs 16 Olfindo, R. 2016. Labor Regulations and Employment Programs in Mindanao.World Bank Report. 35. Employment programs can be further categorized into direct job creation www.worldbank.orgprograms, training programs, and employment facilitation services. Direct job creation 19 programs aim to provide either subsidized short-term wage employment such as public 36. In Mindanao, training programs are the employment program with the largest number Investing in Skills to Promote Inclusive Growth in Mindanao of beneficiaries, while direct job creation programs and employment facilitation services are less developed. Training programs in Mindanao primarily include TVET programs and served about 36. In Mindanao, 513,000 training enrollees programs inthe are 2017, equivalent employment to 5.2 percent program with theof the labor largest numberforce. of In the same year, beneficiaries, while direct job other programs such as the livelihood assistance, youth bridging, and public creation programs and employment facilitation services are less developed. Training programs in Mindanao infrastructure primarily include programs TVET programs only had and served relatively about small numbers 513,000 enrollees of beneficiaries, in 2017, equivalent equivalent to 5.2 percent to 1.0 of the labor percent, force. 1.7 year, other In the same programspercent and such as the 0.2 percent livelihood of the youth assistance, labor bridging, force, respectively (Table ). and public infrastructure programs only had relatively small numbers of beneficiaries, equivalent to 1.0 percent, 1.7 percent and 0.2 percent of the labor force, respectively (Table 3). Table 3. Number of Beneficiaries of Employment Programs in Mindanao, 2017 Table 3. Number of Beneficiaries of Employment Programs in Mindanao, 2017. Beneficiaries Employment Programs Objective No. % of target group* Public infrastructure programs Short-term income support 17,000 0.2 Training programs Enhancement of 513,000 5.2 technical-vocational skills Livelihood assistance programs Support for self-employment 99,000 1.0 Youth bridging programs Short-term income support and 69,000 1.7 on-the-job training Source: Community-Based Employment Program, DOLE; TESDA; Labor Force Survey 2017; World Bank staff calculations. Source: Community-Based *Target Employment groups are the economically Program, active DOLE;for population; TESDA; youthLabor Force bridging Survey the programs, 2017; World target Bank group staff is the calculations. same except the age is 15-30. *Target groups are the economically active population; for youth bridging programs, the target group is the same except the age is 15-30. B. Direct Job Creation B. public 37. In Mindanao, Direct Job Creation infrastructure programs attract a relatively large share of poor workers. It is worth highlighting that different types of programs serve different groups of workers. In the Philippines, public infrastructure programs usually pay beneficiaries 37. minimum. the statutory Therefore, In Mindanao, participation public in the programs infrastructure mightattract programs be attractive for all workers a relatively large earning below share of poorthe minimum. While not all workers earning below the minimum wage are poor, a larger proportion of these workers. It is worth highlighting that different types of programs serve different groups ofworkers are poor in Mindanao than in Luzon17. However, it is small in scale and targets only 2% of the target group as previously mentioned. workers. In the Philippines, public infrastructure programs usually pay beneficiaries the statutory 38. Livelihood programs minimum. Therefore, have increased participation coverage in 2015 from 2011 to the programs might but declined be attractive substantially for after. all The workers Livelihood Sustainable earning below the minimum. While not all workers earning below the minimum wage Program (SLP) focused on Pantawid conditional cash transfer (CCT) beneficiaries has grown from serving 46,000 are poor, families in 16 2011 to 340,000 a largerin 2015, and 166,000 proportion families of these workersin 2017. The 166,000 are poor families in Mindanao in 2017 than are only in Luzon 4 percent of . However, itthe roughly 4 million is small householdinbeneficiaries of the CCT scale and targets onlyProgram. 2% of theThe decreasing target group number of beneficiaries as previously coupled with increasing obligation has led mentioned. to a considerable increase in program cost per beneficiary family (Figure 51). The number of participants served through the Employment Facilitation (EF) track in 2017 also declined after the spike from 2014 to 2015 and 2016. A possible explanation 38. Livelihood programs have increased coverage from 2011 to 2015 but declined for this overall decline could be the saturation of the Listahanan registry (the registry used to target Pantawid), considering substantially beneficiaries cannot repeatafter. The Sustainable participation Livelihood in SLP. In Program (SLP) addition, participant focused qualities (such on Pantawid conditional as educational qualifications, age, and cash confidence) andtransfer effective(CCT) beneficiaries support has grown from from job intermediation serving service 46,000 providers such asfamilies in 2011 PESO) are tokey seen as factors in 340,000 to EF success. 2015, and 166,000 families in 2017. The 166,000 families in 2017 are only On the other hand, effective utilization of funds by Microenterprise Development (MD) Track participants 4 percent of depends the on the roughly 4 of level of vulnerability million household the households. beneficiaries This of the poses challenges CCT on the Program. The sustainability decreasing of the number MD track, given of repayment that the performance is farhouseholds. beneficiaries the from coupled ideal18. This with increasing poses on the has obligation challenges led to a considerable sustainability increase of the MD track, in program given that the 17 cost repayment familyis performance per beneficiary far from (Error! ideal . source not found.). The number of participants Reference Figure Figure 51. Number 51. Number of of SLP SLP served through the Employment Facilitation Beneficiaries Beneficiaries and (EF) trackProgram and Program Unit Unit Cost: in 2017 Cost: 2012-2017 2012-2017 also declined after the spike from 2014 to 2015 and 2016. A possible explanation for this overall decline could be the saturation of the Listahanan registry (the registry used to target Pantawid), considering 16 Olfindo, R. 2016. Labor Regulations and Employment Programs in Mindanao. World Bank Report. 30 Source: SLP Budget Reports Source: SLPand Information Budget ReportsSystems. and Information Systems. 39. Youth bridging programs generally target relatively well-educated young workers. 17 Olfindo, R. 2016. Labor Regulations and Employment Programs in Mindanao. World Bank Report. One selection criteria for participation in youth bridging programs, such as the Special Program 18 Acosta, Pablo Ariel; Avalos, Jorge. 2018. The Philippines Sustainable Livelihood Program: Providing and Expanding Access to Employment and for the Livelihood Opportunities. Employment Social of Students Protection Policy Note; May (SPES) 2018, No.and the Government 13. Washington, Internship DC: World Program (GIP), is the Bank Group. completion of secondary education. Given these selection criteria, it should not be surprising that 20 out of the total youth in Mindanao 51 percent are ineligible to benefit from WORLD BANK and SPES 84 SOCIAL percent POLICY NOTE PROTECTION are ineligible to participate in GIP (Table ). In addition to these formal criteria, most employers who participate in GIP have a strong preference for students who have already completed tertiary 39. Youth bridging programs generally target relatively well-educated young workers. One selection criteria for participation in youth bridging programs, such as the Special Program for the Employment of Students (SPES) and the Government Internship Program (GIP), is the completion of secondary education. Given these selection criteria, it should not be surprising that out of the total youth in Mindanao 51 percent are ineligible to benefit from SPES and 84 percent are ineligible to participate in GIP (Table 4). In addition to these formal criteria, most employers who participate in GIP have a strong preference for students who have already completed tertiary education. As in Mindanao, poverty incidence is highest among youth who did not complete secondary and tertiary education. Thus, this calls for more youth bridging programs in Mindanao that target less-educated youth. In ARMM, 1,411 summer jobs were made available to students and out-of-school youth in 2018 as part of the SPES program19. However, this only covers a small percentage of OSYs which are estimated to be around 270,000 in the region. A recent impact evaluation study puts forward adjustment of SPES targeting to those who benefit from it the most. The study finds that SPES increases enrollment for males, who are at a higher risk of dropping out of school, and low-income students, whose main concern is financial constraints20. Table 4. Percentage of Youth Who Are Not Eligible for Youth Bridging Programs (%) Table 4. Percentage of Youth Who Are Not Eligible for Youth Bridging Program Youth Group Luzon Visayas Mindanao Special Program Government Employment of Students for the Program Internship Youth (15-25) without Youth (18-35) without secondary education tertiary education 36% 76% 46% 80% 51% 84% Those who belong to poor households Those who belong to poor households 19% 12% 37% 27% 46% 35% Source: Family Income and Expenditure Survey-Labor Force Survey 2015; DOLE; World Bank Staff Calculations. Government Internship Program C. Youth (18-35) Training without tertiary education Programs 76% 80% 84% Those who belong to poor households 12% 27% 35% 40. Source :Those Source: Income and levels Family whose Family Income Expenditure of education Survey-Labor and Expenditure Survey-Labor are Force Survey Force Survey 2015; below 2015; DOLE; high DOLE; World World Bank Bankschool completion rarely benefit Staff Calculations. Staff Calculations. from skills training. About 88 percent of formal TVET trainees in Mindanao have completed Programs education or higher while only 12 percent have not (Figure 52). In ARMM, the share secondary C. Training C. Training Programs is roughly the same at 87 percent. This is mainly because TVET in the Philippines is mainly 40. Those whose levels regarded as education of a are belowto complement high schooleducation; basic completion rarelythus, benefit from skills provided training. after About 88 trainees percent have of formal completed Those 40. in Mindanao TVET secondary trainees whose education. levels of secondary have completed Oftentimes, education to be are below education eligible or high higher for school participationcompletion while only 12 in percent rarely have not training benefit (Figure programs from 52). In ARMM, prospective the share skills is roughly trainees training. arethe same requiredAbout at 87 to percent 88 first percent. This of formal is mainly complete becauseTVET TVETtrainees secondary in the educationin Mindanao Philippines is mainly first, have regarded through completed as a complement either formal to or education; basic informal secondary thus, provided education channels after (that trainees or is higher have completed while the ALS). only In 12 secondary percent contrast, have thereeducation. not Oftentimes, are (Figure only 52). In very to few beprograms eligible ARMM, thefor that caterin participation share to training programs trainees prospective with less trainees than are required secondary to first complete education; ansecondary example is roughly the same at 87 percent. This is mainly because TVET in the Philippines is mainly education is first, TESDA’s through either Special formal or informal Training for channels (that is the ALS). Employment In contrast, there areSTEPonly very isfew programs that cater to trainees less than secondary withtraining education; regarded asProgram a complement (STEP). to basic education; a community-based thus, provided after specialty trainees program have completed catering an example to OSYs is TESDA’s as itSpecial is openTraining to for Employment those at least Program 15 years (STEP). old, STEP is a community-based regardless of whether specialty they training program completed high catering secondary to OSYs as it iseducation. open to those Oftentimes, at least to old, 15 years eligible of be regardless for participation in training programs school or not. However, this program is not regular whether like other completed theyTVET high school programs theHowever, or not. and training prospective this program is not trainees regular areTVETrequired to first complete secondary education first, through eithertend to be courses that lead like other to certificates programs and the of competency training tend to be that courses lead to by honored certificates of competency few employers. formal honored by or informal channels (that is the ALS). In contrast, there are only very few programs that few employers. cater Figure trainees to52. with less Distribution than of secondary Trainees education; by Highest an example Educational is TESDA’sand Attainment Special Training for by Island-Region: Employment Program of Figure 52. Distribution (STEP). STEP Trainees is a community-based by Highest specialty Educational Attainment training and by program Island-Region: catering January 2018to OSYs as it is open to those at least 15 years old, regardless of whether they completed high 100% school or not. However, this program is not regular like other TVET programs and the training courses that lead to certificates of competency tend to be honored by few employers. 80% 60% Figure 52. Distribution of Trainees by Highest Educational Attainment and by Island-Region: January 2018 40% 100% 20% 80% 0% Luzon Visayas Mindanao ARMM 60% Primary Incomplete Highschool Highschool Graduate Incomplete College College Graduate Source: 40% Survey, Philippine Statistics Authority. Labor Force Source : Labor Force Survey, Philippine Statistics Authority Note: Only January Note: Only 2018 is used round2018 January because round is succeeding rounds used because adopt exclusively succeeding rounds theadopt levels, leavingthe K to 12exclusively out K the toHS 12graduate levels,category. leaving out the HS graduate20% category. 19 https://news.mb.com.ph/2018/03/18/dole-armm-opens-1411-summer-jobs-for-students-osys/ 20 Only 41. et al. 2015. Beam, Emily a small Evaluation percentage of the of trainees DOLE Special Program in Mindanao for the Employment are of Students from (SPES). AEA poor households RCT Registry. but this November 16. 0% https://www.socialscienceregistry.org/trials/949/history/28932. share is even smaller Luzon in Luzon. Visayas of the graduates from About 10 percent Mindanao ARMM training programs in Mindanao www.worldbank.org are from Primaryhouseholds per capita whose Highschool Incomplete Highschool Graduate income is Incomplete belowCollege the Graduate College poverty line. For ARMM, 21 34 percent of the trainees are poor. At five percent, graduates from poor households represented even an Source smaller : Labor share Force Survey, of total Philippine graduates Statistics Authority in Luzon (Figure 53). This might be because poor Investing in Skills to Promote Inclusive Growth in Mindanao 41. Only a small percentage of trainees in Mindanao are from poor households but this share is even smaller in Luzon. About 10 percent of the graduates from training programs in Mindanao are from households whose per capita income is below the poverty line. For ARMM, 34 percent of the trainees are poor. At five percent, graduates from poor households represented an even smaller share of total graduates in Luzon (Figure 53). This might be because poor workers in Mindanao have relatively better access to training courses than in Luzon. This could also simply be a reflection of the generally higher poverty rates in Mindanao, particularly in ARMM. Inalso simply any case, be agenerally the poor reflection of the struggle generally to access higher training poverty programs rates in the in Mindanao, particularly in Philippines. ARMM. In any case, the poor generally struggle to access training programs in the Philippines. Figure 53.53. Figure Distribution TVET ofof Distribution TVET Graduates byIncome Graduates by Income Status Status and and byby Island-Region: Island-Region: 2015 2015 100% 5% 10% 10% 34% 80% 60% 95% 90% 90% 40% 66% 20% 0% Luzon Visayas Mindanao ARMM Non-Poor Poor Source:and Source: Family Income Income Survey- Expenditure Family Labor Force and Expenditure Survey 2015, Survey- LaborPhilippine Statistics Force Survey 2015,Authority. Philippine Statistics Authority 42.wages 42. Training raises Training raises wages of low-educated workers. low-educated ofTraining does notworkers . Training necessarily improve does not necessarily rates improve the employment among workers the employment rates among workers with less than secondary education as these with less than secondary education as these are very high for both workers with and without training. In Mindanao, are very high 97 percent of workers whoforhaveboth workers with not completed and without secondary education training. In Mindanao, but undergone 97 training are percent This employed. of workers who is almost the have same not employment completed rate as low-educated secondary workers withouteducation but undergone training. However, training low-educated arethat workers employed. This is have completed almost training the same programs often get access to better and higher-paying employment rate asjobs. In Mindanao, low-educated for low-educated workers workers that without training. have received However, training, the low-educated averagethat basic daily workers wage amounts to P334 have which is much completed higher training than the average programs often basic get daily wageto access of P235 better low-educated for and workers without higher-paying jobs. Intraining. These results imply that most low-educated workers will be able to find some kind of job even Mindanao, for low-educated workers that have received training, the average basic daily wagewithout training, but low-educated workers who have undergone training can find jobs that pay considerably higher wages (Table 5 ). amounts to P334 which is much higher than the average basic daily wage of P235 for low-educated workers without training. These results imply that most low-educated workers will Table 5. Average Basic Daily Wages of Low-educated Workers (PhP): January 2018 be able to find some kind of job even without training, but low-educated workers who have undergone training Training can find jobs that pay considerably access higher Luzon Visayas wages (Table Mindanao ARMM). Employment rates (%) Table training Basic Daily Wages of Low-educated 5. Average With 94.6 92.1 Workers 97.4(PhP): January 100 2018 Without training 95.6 96.4 97.5 97.3 Training access Luzon Visayas Mindanao ARMM Average daily basic pay per day Employment rates (%) With training 346 296 334 - With training 94.6 92.1 97.4 100 Without training 293 245 235 207 Without training 95.6 96.4 97.5 97.3 Training wage premium 16 25 25 - Average daily basic pay per day Source: Source: Labor Force Survey, Philippine Statistics Authority. With Source: Labor Note: training Force Only Survey, JanuaryPhilippine 2018 round Statistics Authority. is used because 346 rounds succeeding 296 334 the K to 12 levels, adopt exclusively - leaving out the Note: Only Without training HS graduate January 2018category. round No is pay used data is because provided for succeeding 293 low-educated rounds 245 trainees adopt in ARMM. exclusively 235 the K to 12 207 levels, leaving out the HS graduate category. No pay data is provided for low-educated trainees in ARMM. Training wage premium 16 25 25 - Source: Labor Force Survey, Philippine Statistics Authority. 43.Only January Note: Trainees2018in Mindanao round are less is used because likelyrounds to find succeeding jobs adopt immediately exclusively after the K to 12 training levels, leaving out the those than HS graduate category. No pay data is provided for low-educated trainees in ARMM. in Luzon. In 2016, 69 percent of TVET graduates in Mindanao found jobs within six months of their graduation. This rate was slightly higher than the rate of 67 percent in Visayas but lower than Luzon’s rate of 76 percent and the national average of 72 percent (Error! Reference 22 source not found.). Within Mindanao, job placement rates are particularly WORLD BANK high SOCIALin Davao and PROTECTION POLICY NOTE CARAGA where rates exceed the national average.31 These rates are the lowest in ARMM at 53 43. Trainees in Mindanao are less likely to find jobs immediately after training than those in Luzon. In 2016, 69 percent of TVET graduates in Mindanao found jobs within six 43. Trainees months in Mindanaoof their graduation. are less This likely to find rate jobs was slightly immediately higher after than training thanthe rate in those ofLuzon. 67 percent in 69 Visayas In 2016, percent of TVET graduatesbut lower than in Mindanao foundLuzon ‘s rate jobs within sixof 76 percent months This rate average and the national of their graduation. ofhigher was slightly 72 percent Error! than the(rate of 67 percent Reference in Visayas source but lower than found. notrate Luzon’s of 76 ).percent Within Mindanao, and the nationaljob placement average of 72 rates are percent particularly (Figure high 54). Within in Mindanao, job placementDavao and rates are CARAGA particularly highwhere in Davaorates andexceed CARAGAthe national where average. rates exceed These rates the national areThese average. the lowest in rates are the lowest in ARMMARMM at 53 percent. at 53 percent. 54.54. Figure Figure JobJob Placement Placement Rate Rate ofof Traineesby Trainees by Island-Region: Island-Region: 2016 2016 100% 80% 76% 69% 67% 60% 53% 40% 20% 0% Luzon Visayas Mindanao ARMM Source Source: TESDA : TESDA Impact Impact Evaluation Evaluation Study Study 2016 (latest) 2016 (latest) Note: Note: Number Number of TVET of TVET trainees trainees who secured who secured employment employment 6 months 6 months after graduation. after graduation. 44. The dual 44. education The dual track education is shown track to have is shownhigher a significantly to have a significantly impact higher on earnings, but impact comprises onaearnings, only small percentage of but comprises only a small percentage of graduates and enrollees. The Dual Training graduates and enrollees. The Dual Training System (DTS) is a form of enterprise-based TVET that combines classroom System instruction (DTS) and practical skill is a form training of enterprise-based implemented TVET that by TVET institutions combines Evidence classroom and companies. 21 instruction suggests and that the DTSpractical has a significantly 20 skill higher rate training of return implemented on labor by TVET market earnings institutions compared companies. Evidence and classroom-only with regular, suggests vocational training that the programs, particularly DTS among high hasgraduates school a significantly higher who struggled rate of return academically duringonbasic labor market The education. earnings compared magnitude with regular, of the impact of DTS is also likely to increase in correlation with classroom-only the intensity vocational of the on-the-job training programs, component. However, particularly amongenterprise-based high school programs graduates account who for only a struggled academically during basic education. The magnitude of the impact of DTS is also from the very small proportion for both enrollment and graduation. In 2014, only three percent of enrollees and graduates come enterprise-based likely to delivery mode. increase in correlation with the intensity of the on-the-job component. However, enterprise-based programs account for only a very small proportion for both enrollment and 45. In terms of high-school completion, Mindanao has the lowest passing rates in the Accreditation and Equivalency (A&E) exam of the ALSgraduation. In 2014, which is correlated with only three increased percent future earningsofandenrollees employment and graduates probability come from of dropouts. the The Department of enterprise-based delivery mode. Education leads the delivery of a “second-chance” program to build human capital of out-of-school youth and adults through the implementation of the ALS. ALS is comprised of the Basic Literacy Program (BLP) and A&E program offered for both elementary 45. levels. and secondary In terms Learnersof high-school can completion, earn an official Mindanao certificate which hastothe is equivalent lowest junior passing high school rates diploma in the if they pass the A&E exam. ThisAccreditation and certificate can be used in application (A&E) Equivalency exam for the formal of the sector ALS which employment is correlated which with requires junior highincreased school graduation or future scholarships earnings or grants and to pursue employment post-secondary probability education of dropouts or training or tertiary education. . The Evidence Department suggests that of22Education ALS enrollees leads who passthe A&E examof the delivery have positive long-term a ―second -chance‖educational program to outcomes and employment build human capital of prospects relative youth out-of-school to just being and enrolled in the program per se. However, given the low pass rates, only a small portion is seeing benefits especially in Mindanao. In 2014, all regions in Mindanao observe below-average pass rates, with the lowest seen in ARMM at one percent23 (Figure 55). 20 Igarashi, Takiko; Acosta, Pablo Ariel. 2018. Who Benefits from Dual Training Systems? Evidence from the Philippines. Policy Research Working Paper; No. WPS 8429. Washington, DC: World Bank Group. 32 21 Igarashi, Takiko; Acosta, Pablo Ariel. 2018. Who Benefits from Dual Training Systems? Evidence from the Philippines. Policy Research Working Paper; No. WPS 8429. Washington, DC: World Bank Group. 22 Yamauchi et. al (2016); Igarashi (2017) 23 Igarashi, Takiko. 2018. A Second Chance to Develop the Human Capital of Out-of-School Youth and Adult:The Philippines Alternative Learning System (English). Washington, DC: World Bank Group. www.worldbank.org 23 Investing in Skills to Promote Inclusive Growth in Mindanao Figure 55. Accreditation and Equivalency Exam Pass Rates by Region: 2014 Source: Administrative Data 2014; Department of Education. 46. Wide disparities exist in ALS participation rates, suggesting inconsistent service quality. Learner-teacher ratio (LTR) concentrates around 65-75 across regions while Potential Learner-teacher ratio (PLTR) varies significantly. ALS facilitators need to have minimum of 75 learners annually. Within Mindanao, Caraga, Region XI and Region IX the PLTRs are below the national ratio with an average of 601 students per teacher. This contrasts with Region XII, Region X and ARMM, which recorded above-average ratios and have a combined average of 1,468. As in the past, ARMM posted a significantly higher PLTR than other regions at 2,461 students per teacher (Figure 56). All these imply that the distribution of teachers is not proportional to the size of ALS prospective learners. High PLTRs mean that the participation rate or catchment rate remains low. Figure 56. ALS Learner-Teacher Ratio, Potential-Learner Teacher Ratio and Participation Rate by Figure 56. ALS Learner-Teacher Ratio, Potential-Learner Teacher Ratio and Participation Rate by Region: 2018 3000 25% 2500 20% 2000 15% 1500 10% 9% 1000 743 5% 500 69 0 0% A R ge nV R I I I X III II VI B -A III nX II M nX nI ion nX nV nI CA NC V- G nV M IV a ion ion RA gio gio gio nI er gio gio AR g gio gio ion gio Re g Av g CA gio Re Re Re Re Re Re Re Re Re g Re l Re Re na tio Na LTR PLTR Participation rate Source: Labor Force Survey, Philippine Statistics Authority; LIS/EBIES 2018, Department of Education; WB Staff Calculations Note: Participation rate is actual learners (under age 30) divided by estimated ALS potential learner size. 24 WORLD BANK SOCIAL PROTECTION POLICY NOTE Luzon and Visayas (Figure ). D. Employment Facilitation Services 47. In Mindanao, only a small share of the unemployed access public employment service offices. At 37 percent and 34 percent of all job search methods, respectively, the two most common job search methods among the unemployed in Mindanao are seeking referrals from relatives and friends or approaching employers directly (‘walk-ins’). In contrast, only nine percent of the unemployedLuzon and Visayas in Mindanao (Figure rely on PESOs.).Patterns are qualitatively similar in Luzon and Visayas (Figure 57). Figure 57. Distribution of Job Search Method among Unemployed by Island-Region: 2018 Figure 57. Distribution of Job Search Method among Unemployed by Island-Region: 2018 100% 80% 60% 40% 20% 0% L uz on V i say as M i ndanao A R MM Registered in public employment agency Registered in private employment agency Walk-in Relatives Ads & others Source: Labor Force Survey, Philippine Statistics Authority 34 48. There are only relatively few PESOs and even fewer institutionalized PESOs in Mindanao. There are only about 300 PESOs in Mindanao, compared to about 800 in Luzon and about 400 in Visayas. In Mindanao, 32 percent of PESOs are institutionalized (a low rate that is nevertheless similar to the rates in Luzon and Visayas). An institutionalized PESO is a PESO that is able to perform its core functions as it has its own budget for personnel, office space, and employment facilitation services. Among all the regions in the Philippines, ARMM is the only one without a single institutionalized PESO. 49. While PESOs are not widely used and cannot be found everywhere, their job placement rates are in fact high. About 83 percent of jobseekers who register with PESOs in Mindanao are successfully placed into jobs. PESOs in Luzon achieve almost the same job placement rate (84 percent) and the rate in Visayas is only slightly lower (78 percent). However, PESOs apparently struggle to solicit vacancies in sufficient numbers. In Mindanao, PESOs have managed to solicit 95,000 vacancies while in parallel 633,000 job seekers registered with PESOs. This implies that there is great need for PESOs to recognize employers as part of their core client base and to develop in-depth industry partnerships (Table 6). www.worldbank.org 25 Investing in Skills to Promote Inclusive Growth in Mindanao Table 6. PESO Statistics by Island-Region: 2017 Table 6. PESO Statistics by Island-Region: 2017 Items Luzon Visayas Mindanao No. of PESOs 809 424 359 Operational (%) 81 64 83 Institutional (%) 31 30 32 No. of job vacancies solicited (’000) 348 76 95 % of est. no of unemployed* (%) 22 18 21 No. of jobseekers who registered with PESOs (’000) 1,324 553 633 % of est. no. of unemployed (%) 26 14 15 No. of jobseekers who registered and referred for placement 1,260 495 575 (’000) Of which: placed for jobs (%) 84 78 83 Source: SourceLabor Force : Labor Survey, Force Philippine Survey, Statistics Philippine Authority; Statistics Department Authority; of Labor and Department ofEmployment; World Bank Staff Labor and Employment; Calculations. World Bank Staff *Estimated from Labor Force Survey. Latest full-year PESO data available is 2017. Calculations. *Estimated from Labor Force Survey. Latest full-year PESO data available is 2017. V. Summary and Policy Recommendations V. Summary and Policy Recommendations 50. Attaining inclusive growth and poverty reduction require the creation of quality jobs. This study aims to analyze the latest educational and labor market outcomes in Mindanao and assesses the performance of key employment government programs Attaining 50.implemented inclusive in the growth island-region. findspoverty It and reduction that a lack of qualityrequire the creation jobs, rather of quality is than unemployment, jobs. the main This study aims to analyze the latest educational and labor market outcomes in Mindanao and high. labor market challenge in Mindanao. Though it has declined over time, the underemployment rate has remained This is consistent with the pervasive informality manifested in the high incidence of low-paid and vulnerable jobs. Like assesses the performance of key employment government programs implemented in the underemployment, the share of vulnerable work comprising of the self-employed and unpaid family workers has declined pointsIt island-region. by 10 percentage finds over that a lack a four-year of but period quality jobs, rather has remained than unemployment, the highest in Mindanao across is island-regions. the main labor In 2018, marketwork this vulnerable challenge comprised 44 percent ofThough in Mindanao. Mindanawon it has declined workers who over time, are not theby covered underemployment rate 3 out labor laws and standards. of 10 Mindanawon has remained workershigh. engaged are This in elementary is consistent withoccupations which are the pervasive associated with informality unskilled in manifested and low-paid high jobs. the the slow shift Despiteincidence to industry and services, the Agriculture sector, where workers of low-paid and vulnerable jobs. Like underemployment, the share of vulnerable work are considered vulnerable given the susceptibility to shocks, continued to employ a large portion or 40 percent of the workers. It is unsurprising that in-work povertycomprising has remained ofthethe self-employed largest and unpaid as well in Mindanao acrossfamily workers island-regions, has declining albeit declined byby 10 percentage 4 percentage points over points a three-year a four-year over Despite period. having period but jobs, 32 has remained percent of workersthe highest remained in Mindanao poor across of in 2015. Two-fifths island-regions. the underemployed poor, this In 2018, are working vulnerable potentially work indicating thecomprised inadequate pay 44 as a majorof percent Mindanawon source workers of dissatisfaction. Thesewho are not working poor are covered by labor laws and standards. 3 out of 10 Mindanawon workers are engaged in and likely to be low-educated, a wage-worker and self-employed in Mindanao. Apart from the high underemployment large informality, other factors contribute to the rising demand for good jobs. First, more students favor continuing school elementary occupations which are associated with unskilled and low-paid jobs. Despite the through the SHS of the K to 12 Program, which may explain the temporary drop in labor force participation rate in recent slow shift years. Second, theretois aindustry and gradual shift services, the in employment Agriculture structure sector, where from agriculture workers to industry are considered and services, especially among younger vulnerable age groups. given the susceptibility As graduates and younger to shocks, continued cohorts become to employ better educatedaand large portion inclined or 40non-agriculture percent toward sectors, the greater is the demand for better jobs that meet their aspirations. of the workers. It is unsurprising that in-work poverty has remained the largest as well in Mindanao across island-regions, albeit declining by 4 percentage points over a three-year period. Despite having jobs, 32 percent of workers remained poor in 2015. Two-fifths of the underemployed are working poor, potentially indicating the inadequate pay as a major source of dissatisfaction. These working poor are likely to be low-educated, a wage-worker and self-employed in Mindanao. Apart from the high underemployment and large informality, other factors contribute to the rising demand for good jobs. First, more students favor continuing school through the SHS of the K to 12 Program, which may explain the temporary drop in labor force participation rate in recent years. Second, there is a gradual shift in employment structure from agriculture to industry and services, especially among younger age groups. As graduates 39 26 WORLD BANK SOCIAL PROTECTION POLICY NOTE 51. Particularly for ARMM, this challenge is complemented by the lack of opportunities. Both underemployment rate and unemployment rate of ARMM are the lowest in Mindanao and the second-lowest in the country, though the former remained higher than the latter. This may be more reflective of a labor market with a lack of opportunities, rather than a vibrant one. Whereas the national average is at 61 percent, the labor force participation rate in ARMM is nearly a half only at 47 percent in 2018; the other half of the working age population in the region are economically inactive. The long history of civil conflict in ARMM may have hampered the confidence of businesses and individuals to operate and work, respectively. When they choose to work, it is more than likely to be vulnerable. In 2018, nearly three-fifths or 73 percent of the workers are in vulnerable work in Mindanao—62 percent are self-employed and 11 percent are unpaid family workers. Self-employment is, again, an indication of a lack of opportunity, rather than entrepreneurial drive. In addition, 61 percent of the employed rely on agriculture, which is significantly higher than the 20 percent average share in Mindanao. Hence, the effect on vulnerability as a result of the sector’s low-productivity and weakness to shocks are tripled in ARMM. 52. The youth deserve particular attention in Mindanao, given their three-fold challenge of out-of-school youth, underemployment and unemployment. In 2018, one out of five young adults aged 16-24 years old in Mindanao were neither attending school nor employed. Among all regions, ARMM observed the highest NEE Rate at 30 percent or one out of three young adults. Prolonged periods of idleness have serious implications to confidence and employment prospects in the medium and long run. The most common reasons for not attending school or being employed are marriage or family matters, a lack of personal interest, and the high cost of education or other financial concerns. Secondly, while prevalent among most age groups, the youth underemployment rate comprising of 18 percent or 5 million youth in Mindanao is the highest across island-regions. Thirdly, unemployment is largely a problem of the youth and young adults. In Mindanao, the youth unemployment rate of 11 percent is more than twice the island’s unemployment rate of 4 percent. 53. The labor force participation rate of women is low in Mindanao, particularly in ARMM. Labor force participation rates among women in their twenties are much lower in Mindanao than in Luzon and Visayas, where they stand at 60 percent and 57 percent, respectively. Such rate is significantly lower in ARMM where 23 percent of women in their twenties participate in the labor force. Women in Mindanao and ARMM may face limited economic opportunities and are likelier to work in the home especially during armed conflicts. 54. At the root of the quality jobs challenge on the supply side is a skills gap. Though there are notable improvements, the quality of teaching and learning as well as access to education still face constraints. Despite the minimal differences in preschool attendance rates across regions, Mindanao observed the highest preschool participation rate for older-years indicating a likely delay in child development. For basic education, key school performance indicators such as net enrollment and completion rates have improved over a 7-year period but has remained to be a greater challenge for secondary level than elementary level in Mindanao. Though improving as well, dropout rates remained high for secondary level and among boys. Across island-groups learning outcomes using the NAT have shown only modest gains over a seven-year period and are reflective of poor teacher preparation or competency mainly for science and mathematics as well as the lower ability in instruction and socio-emotional skills. These gaps in education reflect in labor market outcomes as well. The forty percent share of secondary-educated workers and twenty percent share of college-educated workers have remained unchanged over the last four years. Workforce of most regions are dominated by secondary-educated workers, except for Region IX and ARMM where there are more workers with elementary education. While overall unemployment rates are not alarming, elevated rates of youth unemployment and of OSYs and young adults are cause for serious concern. The high youth unemployment and youth underemployment rates may indicate a potential gap between employers’ demands and graduates’ skills. www.worldbank.org 27 Investing in Skills to Promote Inclusive Growth in Mindanao 55. In addition, this study finds that workers with a higher education level earn considerably higher wages and that education and labor market programs have the potential to significantly improve employability of disadvantaged groups. The report has plentiful of evidence showing how higher educational levels are associated with higher returns. The wage gap between workers with tertiary education and those with primary education is highest in Mindanao, amounting to 203 percent in 2018. Such large premium could partly explain the nearly zero share of working poor among tertiary graduates and the 64 percent share of working poor among those who completed primary education or below in the island. Put in another 12 STEP way, the only survey percent indicates of that, trainees the total forMindanao. controllingin other factors, The an additional year of education ALS, which serves asincreased earnings by 5 a second-chance percent in Mindanao in comparison to non-Mindanao areas where it only increases 3 percent. However, compared to the program to enhance skills of OSYs, only benefits a small portion of participants in Mindanao, as Philippines, socio-emotional skills appear to be less relevant to earnings in Mindanao, partly attributed to the agricultural all regions oriented in Mindanao economy. Labor market observe programsbelow-average pass are shown to improve rates, with employability the lowest groups of disadvantaged seen inbutARMM. are small Meanwhile, while in scale and weakly their Public targeted. infrastructurerates job placement high, areattract programs onlyshare a large a small of poorshare workersofinthe unemployed Mindanao but only benefit 2 percent of the target group. The SLP focused on CCT beneficiaries access PESOs, relying more on referrals and walk-in methods. Much more, ARMM does who comprise the poorest households the in not country have declined its coverage to 166,000 families in 2017. Youth bridging programs such as SPES and GIP tend to targetawell-educated have single institutionalized workers. TVET is PESO. shown to raise wages of low-educated workers, but those whose levels are below high school completion rarely benefit from skills training and comprise only 12 percent of the total trainees in Mindanao. The ALS,This 56. which study serves as recommends a second-chancea systematic program and to enhance sequential skills approach of OSYs, only to skills benefits a small development portion of participants in Mindanao, as all regions in Mindanao observe below-average pass rates, that begins in early childhood and ends in lifelong learning and career mobility . This with the lowest seen in ARMM. Meanwhile, paper while their job placement rates are high, only a small share of the unemployed access PESOs, relying more on referrals and slightly modifies the World Bank‘s Skills Toward walk-in methods. Much more, ARMM does not have a single institutionalized PESO.Employment and Productivity (STEP) framework that shows a sequenced combination of educational, training, and labor market 56. This study recommends interventions a systematic to achieve and approach and sequential productivity economic to skills growth (Figurethat development begins in ). With a early strongchildhood focus and on ends in lifelong learning and career mobility. This paper slightly modifies the World Bank’s Skills Toward Employment and vulnerable groups, Productivity (STEP) the proposed framework that shows a approach includes the sequenced combination following of educational, elements: training, (i) market and labor getting children interventions off to theproductivity to achieve right start,and(ii) ensuring economic that growth all students (Figure 58). With alearn, focus building strong (iii) on vulnerablejob-relevant skills, and groups, the proposed (iv) approach facilitating employment includes the following transitions. elements: This study (i) getting children also off to the recommends right thatthat start, (ii) ensuring all forall relevant students policies learn, and (iii) building job-relevant skills, and (iv) facilitating employment transitions. This study also recommends that for all relevant policies programs, rigorous monitoring and evaluation needs to be regularly conducted. This will and programs, rigorous monitoring and evaluation needs to be regularly conducted. This will improve design and delivery, strengthendesign improve impact on and thedelivery, ground, and strengthen impact make it possible on the to prioritize ground, funding and make for effective it possible to prioritize programs. funding for effective programs. Figure 58. Proposed Framework for Skills Development in Mindanao Figure 58. Proposed Framework for Skills Development in Mindanao 57. Getting children off to the right start will entail increasing awareness of its importance as well as access to early childhood care. Foundational skills acquired early in childhood – from before birth until the transition to primary school – make possible a lifetime of 28 learning that puts them on the path to greater prosperity. Integrating actions of different agencies in WORLD BANK SOCIAL PROTECTION POLICY NOTE early childhood education and development (ECED) could help facilitate a common approach that can maximize gains as interventions can start earlier than or simultaneously with preschool 57. Getting children off to the right start will entail increasing awareness of its importance as well as access to early childhood care. Foundational skills acquired early in childhood – from before birth until the transition to primary school – make possible a lifetime of learning that puts them on the path to greater prosperity. Integrating actions of different agencies in early childhood education and development (ECED) could help facilitate a common approach that can maximize gains as interventions can start earlier than or simultaneously with preschool education. For example, standards for curricular and service providers can be set to effectively foster foundational development, especially the socio-emotional skills, which has become an increasingly important measure of workforce skills24. Complimenting these efforts would be a ECED delivery focused on ARMM which has observed low preschool attendance rates. 58. Ensuring that all students learn will require continuously raising the quality of and access to basic education, especially to disadvantaged groups. Improving the quality of teaching and learning will entail reviewing and refining teacher professional programs, both pre-service and in-services trainings. Better access to education will stem from building conducive learning infrastructures with manageable classroom sizes, in improving teacher learning materials to make staying in school attractive as well as in driving dropout prevention and response activities. Efforts are particularly needed to understand underperformance among boys and experiment with learnings methods that may appeal more to them. To help those who have dropped out complete basic education, raising the quality of the ALS program as well as the reach and support to OSY to not just enter the program but to pass it will be needed. For ARMM, where the rate of OSY are the highest in the country, the approach needs to be complemented by the regional Department of Education by leveling up the program delivery and boosting the capacity building of ALS facilitators 25. In addition, as take-up of tertiary education following SHS is expected to rise, ensuring the quality of HEIs would entail strengthening and reviewing regularly the implementation of the free provision of college tuition in SUCs and LUCs. A PIDS study suggested that giving free tuition to enrolled students in SUCs will likely benefit mostly richer students 26. This suggests the need to complement costs of education, such as transportation, living allowance and project expenses, that may hinder college take-up and would need a shift of intervention towards scholarships and grants for poor but deserving students. Extending the reach and ensuring appropriate implementation of the Pantawid CCT program, especially in ARMM, is a key additional intervention.” 59. Developing job-relevant skills through on-the-job training (OJT), apprenticeships, and other vocational programs will entail improving its design, coverage and targeting. Efforts are needed to improve DOLE’s work programs of SPES and GIP, so that beneficiaries can be given meaningful jobs that could enhance their skills and employability. For SPES, refining the screening criteria will help SPES reach those who benefit it the most, such as males who are at a risk of dropping out and low-income students. For GIP, given the strong preference for college graduates, appropriate support can be given for employers to accommodate and design programs fit for other eligible graduates such as those from high school and technical-vocational, who may benefit from it more. To benefit more the poor, provision of financial support to TVET beneficiaries, encouraging transparency in beneficiary selection, especially for free TVET programs, as well as expansion of TESDA initiatives for agricultural training and other activities with high-potential in ARMM are needed, through its regional office. Further, given the promise of the Special Training for Employment Program and DTS in reaching the poor and improving employment prospects respectively, initiatives can focus on scaling up and enhancing the incentives for the delivery and take-up.” 60. Facilitating employment transitions will require improving the monitoring of SLP as well as expanding PESO institutionalization. Employment facilitation services seek to provide work for or increase the employability of people with certain disadvantages in the labor market through interventions like direct employment, livelihood or self-employment, and employment services. Priority should be given to streamlining the various livelihood programs of the government, including the SLP from the CCT, for a united approach as well as incorporating standards for beneficiary targeting to prevent patronage. Given the success in job placements of PESOs, institutionalized PESOs should be expanded in Mindanao, particularly in ARMM, to service more beneficiaries who need it the most. Strengthening its client-driven approach based on international best practices would also help improve its delivery as well as attract more jobseekers to avail of its services. This includes enhancing its collaboration with other government agencies who may have related programs on training and employment and private partners who will help in designing proper incentives to increase take-up of employers. 24 Acosta, Pablo Ariel; Igarashi, Takiko; Olfindo, Rosechin; Rutkowski, Jan Jerzy. 2017. Developing Socioemotinal Skills for the Philippines’ Labor Market. Directions in Development, Human Development. Washington, DC: World Bank Group. 25 World Bank. 2019. Unlocking the Potential of the Bangsamoro People through the Alternative Learning System. Forthcoming. 26 Orbeta, Aniceto and Paqueo, Vicente. 2017. Who benefits and loses from an untargeted tuition subsidy for students in SUCs? Policy Note 2017-03. Philippine Institute for Development Studies. www.worldbank.org 29 Investing in Skills to Promote Inclusive Growth in Mindanao 61. Ultimately, quality job creation depends not only on the human capital of the workforce but also on the availability of productive opportunities which is most crucial for ARMM. Therefore, future research could be conducted on the demand- side labor market constraints to complement this paper’s largely supply-side focus. In addition, further analyses could explore the adaptation of elements in the STEP framework to the Mindanao context, on promoting entrepreneurship and innovation, and supporting labor mobility (domestic and abroad). 30 WORLD BANK SOCIAL PROTECTION POLICY NOTE www.worldbank.org 31