Quixotic solutions to poverty, unemployment and ignorance
ENDO is dead. Let me congratulate Labor Secretary Silvestre H. Bello III for signing the death certificate of the employment malpractice fondly called ENDO, by issuing Department Order No. 174, series of 2017. If implemented strictly, these new rules will effectively end ENDO. While this DO gives a reprieve to principals and job contractors alike, it also makes it more difficult today for both principals and contractors to engage in job contracting than in the past.
Both houses of Congress are now busy discussing some 30 new bills on job contracting. At the Lower House, the sentiment of many party list representatives is to totally prohibit job contracting and subcontracting.
Both the new DO and the pending legislations could have unintended consequences if they restrict, constrict or prohibit job contracting and outsourcing in the Philippines, amidst a global scenario where liberalization and non-standard forms of work arrangements are becoming the norm.
More employment woes
The country's problem is not the lack of regular jobs. There just aren't enough jobs. With half a million graduates from college this year and more 15 year olds joining the labor force, the unemployment rate recently rose by 1.2 percentage points.
The youth unemployment rate is more than twice the national rate. More kids can't go to school because they are poor. More people are poor because they are uneducated and unemployed. Many are unemployed because they lack the right education. It's a vicious cycle as poverty, unemployment and lack of education (ignorance) reinforce each other to make many Filipinos unproductive and a burden to society.
Someone said that an idle mind is the devil's workshop. When the youth's energy is not channeled to productive use, the youth can be unproductive, counterproductive or simply reproductive. When the uneducated and unproductive reproduce their kind, society's problems tend to escalate.
PEZA's role in employment
Last time I looked, the formula for employment hasn't changed - Investment equals Employment. Investments, whether foreign or domestic, create jobs.
In the Philippines, the PEZA (Philippine Economic Zone Authority) is the government agency in DTI that helps provide globally competitive and ecologically sustainable business environment that generates investments, exports and employment.
The new PEZA Director General is BGen. Charito "Ching" Plaza, former Congresswoman for three terms in Agusan Del Norte since 1986, a reservist Air Force Brigadier General, taught at National Defense College and Philippine National Police Academy, and Consultant to DILG and other government agencies.
We met with DG Chingin late April and were amazed at her vision of having more economic zones in all the regions. DG Ching said, "We offer incentives and benefits for export-oriented manufacturers, IT-BPO services, agro-industrial, tourism and medical tourism enterprises so that they can earn dollars for the country."
Incentives come in the form of income tax holiday (exemption from corporate income tax) for four to eight years; special 5% tax on gross income, in lieu of national and local taxes; exemption from duties and taxes on imported capital equipment, parts, supplies, and materials; zero VAT; domestic local sales allowance equivalent to 30% of local sales; exemption from local government taxes and fees, export taxes, wharfage dues, imposts and fees; simplified import and export procedures; special visa for foreign investors and immediate family members; long-term lease of 75 years; and employment of foreign nationals for management and technical positions.
If DG Ching can increase the active PEZA zones to 40 all over the country, and locators would hire at least 100,000 new employees per zone, she could help create 4,000,000 new high-value jobs. That will erase the country's unemployment problem.
Education and training
To qualify for jobs in the ecozones, however, workers must have the right training and education. Alex Arnado, a Cebu-based entrepreneur and a friend with schools in some parts of the country, has a solution that has worked for years now. He runs a school system where students are placed on dual training with manufacturing companies, in accordance with law and government regulations. The students get free technical training and college education, and at the same time receive allowances ( close to, if not equal to, minimum wages) for full-time training on real jobs at volunteer companies. This is not like the OJT we know where students, after 200 hours of exposure to companies, become experts in serving coffee and making Xerox copies. Based on his experience, Alex said, "Students get hired for regular jobs even before they graduate. Their studies are tweaked to the actual needs of industry, thereby ensuring them full time employment in high-value jobs."
On one hand, the youth can get free private education, earn while learning, and qualify for regular high-value jobs. Which parents wouldn't like their kids to have free college education and earn while studying? On the other hand, participating enterprises can be assured of potential employees whose training is tailor-fit to address their current and future manpower requirements.
If Arnado and PEZA DG Ching could truly work together in fighting poverty, unemployment and ignorance, these two unassuming, passionate, and hard-working professionals could be likened to Don Quixote de la Mancha and Dulcinea Del Toboso fighting today's giant windmills that stand in the way of Philippine progress.
(Email at erniececilia@ gmail.com)