Philippines: Post-Covid-19 Business and Employment Recovery Program - Subprogram 1

OBJECTIVE

The Program objective is to improve access to employment, livelihood, and training opportunities and increase support to existing and emerging business to create employment in order to support the country’s post COVID-19 labor market adjustments.

DESCRIPTION

This Program will provide a policy-based loan under the COVID-19 Crisis Recovery Facility of the Bank and will be co-financed with the Asian Development Bank (ADB).

The pandemic shock to the Philippines’ economy created a longer-lasting negative impact on private sector employment in the country and has persisted even after the economy has started to recover. Working-age population and elders, especially women, have been the most negatively affected.

Against the backdrop of this labor market situation, the government launched the National Employment Recovery Strategy (NERS) in May 2021. NERS is to improve access to employment, livelihood, and training opportunities; and to support existing and emerging businesses to create sustainable employment opportunities in light of the pandemic-induced job losses. The Program is anchored on NERS, combining business, skills development, and employment-related reforms. Through the Program, landmark regulations and reforms will be put in place.

The Program will support three reform areas: (1) active labor market programs expanded to meet post-pandemic employment needs; (2) pandemic-induced skills mismatches addressed and institutional linkages between skills training and employment strengthened; and (3) post-pandemic business and investment framework liberalized for a job-rich recovery. Reform area 1 facilitates matching good quality, more sustainable and greener jobs with jobseekers while providing targeted help to women: a jobs transition program tailor-made for the needs of women will be piloted, including skills training, livelihood grants, and childcare assistance. Reform area 2 enhances the quality of labor by linking skills training with demand. Reform area 3 supports increased job creation in private businesses by introducing structural reforms, making tax policy efficient, removing impediments to foreign investment, and creating ecosystem for innovation.

ENVIRONMENTAL AND SOCIAL INFORMATION

The Program will be co-financed with ADB as the lead co-financier, and the Program’s environmental and social (E&S) risks and impacts were assessed in accordance with the provisions of ADB’s Safeguards Policy Statement (SPS) applicable to policy-based lending (PBL). AIIB’s Environmental and Social Policy (ESP) was designed to apply to investment projects and has no provisions for its application to PBL operations. Therefore, as permitted by a decision of AIIB’s Board of Directors, the provisions of ADB’s SPS applicable to PBL will apply to this operation in lieu of AIIB’s ESP. This will provide for a harmonized approach to addressing the E&S risks and impacts of the Program.

Under its SPS, ADB has categorized the Program as Category C for each of Environment, Involuntary Resettlement, and Indigenous Peoples (equivalent to Category C if AIIB ESP were applicable) on the basis of an assessment of the E&S risks and impacts of the Program, which concluded that the Program is not expected to have any adverse environmental or social impacts. The primary beneficiaries of the Program will be the vulnerable workers including those in the informal sector, young, and female workers. With the help of this Program, more training, reskilling, and upskilling programs can be made available to the informal or vulnerable workers, particularly women.

The Program has been categorized by ADB as “effective gender mainstreaming” and includes the following key actions: (i) setting gender targets in job skilling activities, including higher-level Technical-Vocational Education and Training programs, Job Start Philippines, and SkillsUpNet Philippines; and (ii) integrating gender-responsive and climate smart design features in the regional technical innovation centers.