The Lack of SkiLLed Labor in The arMM:

a Problem of Supply and demand

This study was commissioned under the Business and Peace Program ofthe Philippine Business for Social Progress - Center for Corporate Citizenship.

Copyright © 2009 by the Philippine Business for Social Progress. All rights reserved. No part of this document may be excerpted, reproduced, or copied without the permission of the publisher.

ISBN No. 978-971-8572-59-7

April 2009

Introduction, Research Objectives, and Methodology 3

Overview of Education and Employment Situation in the ARMM 6

Employment Opportunities Outside the ARMM 12

Conclusions 15

Recommendations 16

Annexes

Annex 1. List of Respondents 17Annex 2. List of Training Courses conducted by TESDA-ARMM, 2006 18

contents

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Education is key to human development in the Autonomous Region in Muslim Mindanao (ARMM). Education can inculcate values that would allow the youth in the region to form their identities as members of an Islamic community and as citizens of the Philippines. It can also enable Filipinos living in the ARMM to pursue economic development within and outside the region.

Sadly, the ARMM, which consists of six provinces and one city, namely, Basilan, Lanao del Sur, Maguindanao, Shariff Kabunsuan, Sulu, Tawi-Tawi, and Marawi City, lags behind the rest of the country with respect to education development (See Sidebar: Laggard Children - and Adults). Many reasons have been given to explain this, among them the lack of schools, the conflict situation which drives people out of their homes, and the general poverty in the area.

The value of universal, quality basic education need not be belabored. The relationship between education and employment can be compared to that of supply and demand, with the products of the education system responding to the demands of the employment market. Supply follows demand. In a perfect world, those who want to be gainfully employed will consider the labor market situation and make decisions accordingly.

However, the question, “Education and training for what?,” begs to be asked. Given the lack of industries in the area, what courses need to be offered and what employable skills need to be developed?

This study focuses on the technical-vocational training and higher education in the ARMM. This study aims to:

Describe the state of technical-vocational and tertiary education in the ARMM Present an overview of the employment landscape in the region Identify employment opportunities outside the ARMM

introduction, research objectives, and Methodology

Laggard chiLdren—and aduLTS

The ARMM lags behind the rest of the country with respect to educational development. Filipinos in the region start falling behind at an early school age.

Consider the following:

At the elementary level, participation rate stood at 83.91% in school year 2004-2005. This measure, as defined by the Department of Education, describes the percentage of enrolled children to the total population of children in the same age range.

Students in the ARMM got the lowest scores nationwide in the National Achievement Test (NAT) for grade 6 and 4th year high school students in school year 2004-2005 (Functional Literacy, Education and Mass Media Survey, NSO 2004-2005).

The NAT passing mean percentage score is 75%. Grade 6 students in the ARMM received mean percentage scores of 46% for Math, 49% for English, and 43% for Science. The 4th year high school students in the region got mean percentage scores of 41% for Math, 40% for English, and 31% for Science.

Only 14% of the population in the ARMM aged 24 years and above had reached or graduated from college, reports FLEMMS. This percentage is the second lowest in the country, after the 13.4% registered in the region of Mindoro-Marinduque-Romblon-Palawan.

Filipinos in the ARMM scored the lowest nationwide in basic and functional literacy. They scored 70.2% in basic literacy. This means only seven out of 10 ARMM residents could read and write a simple message in any language or dialect. They scored 62.9% in functional literacy. This means only six out of 10 ARMM residents could satisfactorily answer the following questions:

1. What is your full name?2. What is your address?3. What is your complete date of birth?4. What is your highest educational attainment? 5. If a kilo of rice costs Php22, how much will two kilos cost?6. If a kilo of sugar costs Php30, how much will half a kilo cost?7. Read the following paragraph:

The depletion of our forest is one of the most serious environmental problems of the Philippines. It causes frequent floods and loss of fertile soil. Crops and property are destroyed and many lives are lost because of frequent floods.

Based on the paragraph you read, what are the effects of forest depletion?

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The study made use of available secondary data provided by government offices. Interviews and focus group discussions with key informants were conducted to support the existing data (See Annex 1 for the list of respondents). Analyses were purely descriptive.

The findings of the study were presented and validated during the Stakeholders’ Dialogue on June 26, 2007 in Cotabato City. Representatives from the academe, government, and business sector attended the event and recommended courses of action as a response to the gaps and challenges in education and business in the ARMM.

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a. The State of Technical-Vocational and Tertiary education in the region

The Technical Education and Skills Development Authority in the ARMM (TESDA-ARMM) is mandated “to develop globally competitive middle-level manpower.” In 2006, it trained 3,909 ARMM residents in various trades and skills (See Annex 2: List of Training Courses conducted by TESDA-ARMM, 2006). Training courses conducted include automotive mechanic, building construction, basic information technology, food processing, dressmaking and cellphone repair, among others.

The training programs are categorized into center-based training, community-based training, or community-based training and enterprise development. TESDA-ARMM conducts most of the training sessions in partnership with non-government organizations and foundations, such as the ASCEND program, Tabang Mindanaw, Institute of Bangsa Moro Studies, and the Bangsa Moro Development Agency.

TESDA-ARMM is also mandated to conduct Competency Assessment and Certification. In 2005, out of the 626 individuals tested, 217 (35%) passed. The number of certified workers included 87 data encoders, 77 building wiring electricians, 20 electric arc welders, 8 automotive mechanics, 8 consumer electronic mechanics, and 1 bulldozer operator.

TESDA uses a planning tool called the Policy-oriented, Sector-focused, Area-based, Labor Market-Driven or PSALM to identify priority sectors and critical skills demand. In the National Technical Education and Skills Plan for 2005 -2007, critical needs were identified for the ARMM, namely, skills in construction, automotive, and agriculture and skills (See Table 1: Critical Skills Demand in the ARMM, 2005-2007).

The TESDA Priority Skills listing also identified critical skills needed in other areas in Mindanao, particularly in Regions 10 to 12. These are skills in agriculture and fishery, construction, information

overview of education and employment Situation in the arMM

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& communications technology, food processing and automotive mechanic, among many (See Table 2: Critical Skills Demand in Regions 10 to 12, 2005-2007). Those from the ARMM who are skilled and seeking employment can possibly fill up these needs for critical skills.

Aside from TESDA, 50 accredited training institutions within the ARMM offer technical vocational training. No data were obtained from these schools. This study provides inference on which training courses were popular by assuming that the schools offer those courses as a response to a perceived industry demand.

The most common courses offered by these institutions are two-year courses on variants of computer technology (e.g., computer programming, computer communication and network technology, computer management and information system).

Many schools also offer middle-level skills training in automation, refrigeration, and others. Six-month courses on caregiver programs are also available, along with two-year programs on nursing aide and pharmacy aide. Only two schools offer courses related to agriculture and fisheries. These are both in Tawi-Tawi.

In the field of tertiary education, there are at least 32 higher education institutions composed of both public and private schools within the ARMM. The Mindanao State University system is the

Table 1. critical Skills demand in the arMM, 2005-2007

Sectors DemandAgriculture and fishery (including rubber) 1,392

Automotive 1,760

Construction 3,910

Furniture and furnishings 190

Garments 830

Information and communications technology 940

Land transport 325

Shipbuilding 480

Tourism (including hotel and restaurant management) 44

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biggest in the region with around 68,000 students and more than 3,000 faculty members. It has seven autonomous campuses and an online campus.

According to data processed by the Mindanao Economic Development Council, the top five college courses in school year 1999-2000 were education science and teacher training, business and administration and related fields, agricultural, forestry and fisheries, engineering, and medical

Source: TESDA Priority Skills Requirements 2005-2007

Note: Region 10 consists of Misamis Oriental, Misamis Occidental, Bukidnon, and Camiguin. Region 11 consists of Davao del Norte, Davao del Sur, Davao Oriental, and Compostela Valley. Region 12 consists of Sultan Kudarat, Cotabato City, South Cotabato, General Santos, and Sarangani.

Table 2. critical Skills demand in regions 10 to 12, 2005-2007

Sectors Region 10 Region 11 Region 12Agriculture and fishery (including rubber) 11,689 9,817 47,489

Automotive 2,117 282 931Construction 10,903 692 2,691Decorative crafts 202 120 -Electrical 150 - -Electronics 209 - 111Furniture and furnishings 820 790 475Garments 523 - 267Health and social services 632 - 357Heating, ventilation and air-conditioning/refrigeration 334 - -

Information and communications technology 8,360 17,370 757

Land transport 733 - 7,514Maritime - - 573Metals and engineering 888 360 186Mining - 132 -Processed food and beverages 3,738 1,893 450Shipbuilding - 168 -Tourism (including hotel and restaurant management) 3,957 1,297 3,898

Wholesale and retail trading - - 1,491

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and allied professions (See Table 3: Number of Graduates per Discipline Group in the ARMM for School Year 1999- 2000). These data give an indication of what skills are available in the region.

b. The employment Landscape in the arMM

There is a natural relationship between education and employment, type of employment and income, and, ultimately, income and poverty. In the case of the ARMM, however, while employment rates are high, so are poverty levels.

The ARMM labor force statistics paint a rosy picture. As of October 2006, the National Statistics Office (NSO) reports that the ARMM has a labor force of 1.6 million of which 57% or 945,630 are considered in the labor force. With an employment rate of 96%, this means that 907,000 are employed.

However, despite the relatively high employment rate, the poverty incidence in the ARMM in 2006 was recorded at a high of 53.1%. Poverty incidence, as defined by NSO, measures the ratio

Table 3. number of graduates per discipline group in the arMM, School Year 1999-2000

Discipline GroupNumber of Graduates

Male Female TotalAgricultural, forestry and fisheries 138 84 222Architectural and town planning 4 - 4Business and administration and related fields 142 168 310

Education science and teacher training 154 277 431Engineering 65 - 65Home economics 4 1 5Humanities 16 17 33Mathematics and computer science 25 13 38Medical and allied 12 34 46Natural science 8 10 18Social and behavioral sciences 46 32 78Trade craft and industry - 5 5Total 614 641 1,256

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of the total number of households whose per capita income is below the poverty threshold compared with the total number of households. The ARMM figure was higher than the national rate of 30.4%.

The inconsistency between the employment rate and poverty incidence may be attributed to some extent to the type or class of employment and degree of underemployment.

l employment by class of Worker

One of the classifications used to describe types of employment is class of worker. This refers to how workers are paid or not paid. The three classes of workers are wage and salary workers, own account workers, and unpaid family workers. “Own account workers” refer to those who own the business and do not receive salary and wages. This is consistent with the common observation that employment in the region is mostly through non-formal work, i.e., trading another non-wage employment.

The latest available data on the ARMM Class of Worker (2003) from the NSO shows that there were 858,000 people employed in the ARMM. The data shows that most of these workers (61%) earned on their own. The second-highest percentage (23%) worked unpaid within the family. Only a few (16%) were wage and salary workers.

l employment in firms registered with the regional board of investments

The Regional Board of Investment (RBOI) has provided a list of registered firms covering 1992 to 2005. There were 18 firms (including three expansion firms, or effectively only 15 firms). The combined employment in these firms was 15,617. However, one firm, Tabung Haji Janoub Philippines Plantation, Inc., has reportedly shut down. Two firms have not yet started operation.

The firms have a combined capitalization of Php906 million. Three firms are engaged in banana plantation. Several others process agricultural products such as cassava starch, coco crude oil, banana chips, virgin coconut oil, and vinegar. One firm is engaged in building and woodwork while several are in transportation.

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l employment in establishments

The latest available data on establishments within the ARMM show a total of only 5,516 establishments employing a total of 25,100.

l employment in government

Data from the Civil Service Commission showed that the ARMM employs 39,240 government personnel.

l employment in agriculture

Analyzing data from the Household Survey conducted in 2002, NSO reports the following agricultural activities of ARMM households:

In 2002, a total of 132,500 household members were engaged in agricultural activities. Of this, about 111,400 (84.1%) were employed in own holding (i.e., they own the land), 10,100 (7.6%) both in their own holding and in the holding of others, and 11,000 (8.3%) in other holdings. About 15.1% of household members aged 10 to 24 years were engaged in an agricultural activity. Four out of five (81.8%) of them were engaged in their

own holding.

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The fact that there is a consistently high employment rate within the ARMM shows that Filipinos in the region manage to find employment despite their limited skills. However, they tend to settle for lower-paying jobs. Few jobs are available within the ARMM, forcing them to accept low-paying jobs, or seek jobs outside the region and even abroad.

a. The Tuna and allied industries in general Santos city, cotabato

Fishing is a Php50-billion industry which contributes 4% to the country’s Gross National Product (GNP). Each year, 2.4 million metric tons of fish are produced. Tuna accounts for 12% of total fish production.

In General Santos, tuna is hailed as an “economic superstar.” There are seven tuna processing and canning factories within the city. Fishing employs 60% of the city’s labor force. One respondent noted that almost 40% of the industry’s labor force comes from outside General Santos City.

There are many job opportunities in the fishing industry. A purse seine, which employs around 25 crewmembers per vessel, would typically require employees for the following positions:

Assistant engineer Assistant refreman Captain (licensed) Chief engineer (licensed) Chief mate (licensed) Chief refreman Cook Deck boss Deck hand Diver

employment opportunities outside the arMM

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Electricians Master fisherman Oiler Radio operator (licensed) Skiffman Wing man

A fish processing plant would typically require employees for the following positions:

Factory workers Product division heads (per type of fish) Production line leaders

During the peak season from April to November each year, a fish processing company will employ an average of 360 workers.

A canning company would typically require employees for the following:

Engineering Finance Fish procurement Planning department and inventory control Production workers (approximately 4,000 workers) Quality control Quality assurance Research

An aquaculture company would typically require pond assistants and production workers.

In general, hiring of factory and production workers is through contract agencies. The duration of employment is six months. In an interview, a canning company expressed that it uses the services of manning agencies, one of which employs Muslims exclusively. For regular positions in the company, a review of qualifications, a verbal exam, and a skills test precede hiring.

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b. The Mining industry in Mindanao

The Philippine mining industry employs about 104,000 workers and pays a total of Php5 billion in wages and benefits. Of the 23 major metallic projects operating in the country, nine are in Mindanao. In Tampakan, South Cotabato, Sagittarius Mines, Inc. (SMI) is exploring for copper and gold in a 300-square kilometer area, which reportedly contains 6.8 million tons of copper and 8.7 million ounces of gold. Skilled manpower from the ARMM can share in this bounty if they possess the skills needed by the industry.

The Philippines-Australia Human Resource Development Facility (PAHRDF) Scoping Study on Technical and Vocational Capacity in Mindanao quotes the Human Resource Manager of SMI as saying that the company would need at least 1,444 skilled workers beginning in 2008. Once the mining operation is established, more workers will be needed.

c. overseas employment

In 2000, there were 42,857 overseas contract workers or about 2% of total households in the region, according to NSO. This figure represents almost 10% of the ARMM’s employed.

NSO also noted that females comprise 56% of the overseas workers, and that the median age of overseas workers was 25 years. This meant that half of the overseas workers were below 25 years old. Males had a median age of 27 years while their female counterparts were 24 years old.

Members of the ARMM’s skilled labor force are making an economics-driven decision when they opt to go where the jobs are—in Arab countries or in Malaysia, whether documented or undocumented, as skilled laborers or as caregivers. Overseas jobs bring in precious remittances. This phenomenon, while not unique to the ARMM, seems to be a short-term solution to a pervasive lack of employment opportunities.

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a. The arMM education sector produces limited number and quality of graduates.

This is manifested by low school enrolment, survival rates, and achievement test scores. Basic and functional literacy rates in the region are the lowest in the country. School management and teacher training have also been identified as key concerns. The pool of students eligible for higher learning and advanced skills is small, owing to the low participation rate, low achievement scores, and high dropout rates.

However, valiant strides are being taken to address these. There are several ongoing programs addressing access to and quality of education. TESDA, private training institutions, and NGOs undertake technical skills training on urgent job requirements.

b. There are limited employment opportunities within the arMM.

The more pressing concern seems to be the lack of investments and employment opportunities within the ARMM. With no job opportunities clearly in sight, there is low motivation to pursue further education.

On the other hand, the presence of thousands of small businesses points to a keen entrepreneurial spirit. The business acumen clearly exhibited in trading goods can be tapped and stretched to more value-adding activities utilizing the region’s vast agricultural and fishery resources. This calls for more training on entrepreneurial skills, research and development on value-adding processes, and technical training.

c. There are employment opportunities outside of the arMM.

In the medium-term, or until employment opportunities within the ARMM flourish, able workers in the region can look for employment elsewhere. While the Middle East and Malaysia seem to be the default employment locale for the ARMM, there are opportunities within Mindanao, namely in the tuna and mining industries.

conclusions

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In order to improve education in the ARMM, boost the employability of graduates, improve the investment climate in the ARMM, and increase employment opportunities, following were the recommendations from the education and the investment sectors:

recommendations

On June 26, 2007, a Stakeholders’ Dialogue was held at the Estosan Garden Hotel, Cotabato City, to accomplish the following objectives:

Validate the findings of the research study

Solicit the insights and comments of concerned stakeholders on the recommendations of the study and on other issues that surfaced during the discussion

Identify concrete courses of action per sector to address the gaps, challenges, and opportunities cited in the study

Thirty-six representatives from the academe, business organizations, and government attended the dialogue. They were divided into two breakout groups—the education sector and the investment sector.

1. Initiate linkages between existing businesses and educational institutions to identify manpower skills needed by businesses, and respond to the priority skills requirements initially identified by TESDA-ARMM;

2. Invest in research and development to design value-adding activities on existing industries, such as agriculture and fisheries, and conduct appropriate trainings to improve business operations and middle-level and entrepreneurial skills; and

3. Organize a regional education coordinating council to work with the Department of Education in streamlining educational programs in the ARMM through reviewing the curriculum and designing national graduate programs with the goal of improving the general education situation in the region as well as addressing the gap between education and business demands.

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Mr. ian d’arcY WaLSh Australian Project Director Basic Education Assistance for Mindanao (BEAM) REMCO Bldg, DepEd XI Compound F. Torres St, Davao City Tel: (63 82) 224-6753 Fax: (63 82) 224-6754

Mr. noor MohaMMad d. Saada Deputy Australian Project Coordinator - BEAM PMU Cotabato Muslim and Peace Education Coordinator Basic Education Assistance for Mindanao (BEAM) BEAM-PNU Cotabato Office, RELC XII ARMM Compound, Cotabato City Tel: (064) 421-6577; 0917-7056404 Fax: (064) 421-8540 Email: nsaada@beam.org.ph

dir. kaMid LadjakahaL Regional BSE Director Department of Education-ARMM DepEd-ARMM Office ORG Compound, Cotabato City Tel: (064) 3901467

Mr. jereMiah eSTorque Supervising Social Development Specialist Mindanao Development Council 4th Floor, SSS Building J.P. Laurel Ave., Bajada Davao City Tel: (082) 299-2981 dr. MarYLin Muncada Manager - Mindanao Regional OfficePhilippine Business for Social Progress Door #2 Ebro Pelayo Building Juan Luna St., Davao City Tel: (082) 221-2253Fax: (082) 221-2251

annex 1. List of respondents

Mr. heLLMie haLiM Chief of Planning Dept. of Agriculture and Fisheries-ARMM DAF-ARMM Office ORG Compound, Cotabato City Tel: (064) 421-1248; (064) 421-5753 Telefax: (064) 421-1234 daTu haron bandiLa Assistant Regional Secretary Dept. of Agriculture and Fisheries-ARMM DAF-ARMM Office ORG Compound, Cotabato City Tel: (064) 421-1248; (064) 421-5753 Telefax: (064) 421-1234 Mr. iSkak L. PagguiTaL Agribusiness Division Dept. of Agriculture and Fisheries-ARMM DAF-ARMM Office ORG Compound, Cotabato City Tel: (064) 421-1248; (064) 421-5753 Telefax: (064) 421-1234 dir. Moner k. duMaMa Executive Director Regional Board of Investments-ARMM ARMM Complex, Cotabato CityTel: (064) 421-1291; 0918-9183586 Fax: (064) 421-1591 Email: mkdumama@yahoo.com

Mr. neMeSio S. Mana-aY Chief Investment Specialist-Special Support and Research Division Regional Board of Investments-ARMM ARMM Complex, Cotabato City Tel: (064) 421-1291; 0917-7204119 Fax: (064) 421-1591 Email: nsmanaay@yahoo.com

Mr. jong LeViSore Technical Staff ARMM Business Council ABC Office ORG Compound, Cotabato City Telefax: (064) 421-5114 Telefax: (064) 431-0502 Email: abcfi2000@yahoo.com

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annex 2. List of Training courses conducted by TeSda-arMM, 2006

MaguindanaoOCCUPATIONAL AREA COMMUNITY-BASED TRAINING Building Wiring Electricity 74Basic Information Technology 52Bag Making 115Dressmaking 37Building Construction 40Food Processing 66Cellfone Repair 52

Total 436COMMUNITY-BASED TRAINING AND ENTERPRISE DEVELOPMENTDressmaking 36T-shirt Printing 25Building Wiring Electricity 19

Total 80INDUSTRY OR COMPANY-BASED Automotive Mechanic 25Building Construction 17Bolo Making 20Sugar Production 57

Total 279SCHOOL-BASED Basic Information Technology 180Automotive Electrician 40Gasoline Engine Mechanic 38Diesel Engine Mechanic 38Driving 38Heavy Equipment Operator 38Building Wiring Electricity 71Food Processing 102

Total 545baSiLan

OCCUPATIONAL AREA COMMUNITY-BASED TRAINING Garments/Dressmaking 30Oxy-Acetylene and Arc Welding 30Dressmaking with T-Shirt Printing 12Food Technology 21Hair Science with Reflexology 7Automotive Technology 26Fish Processing 14

Total 140

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COMMUNITY-BASED TRAINING AND ENTERPRISE DEVELOPMENTMat Weaving 26Basic Radio Servicing 25Fish Processing 25

Total 76CENTER-BASEDBuilding Lay-out and Scaffolding Making 15Dressmaking 24Basic Radio Servicing 12Building Wiring Electricity 352G Plate Welding 33Consumer Electronics 18Automotive 20

Total 157SCHOOL-BASED PC Maintenance and Basic Troubleshooting 28PC Maintenance with Basic Troubleshooting 21

Total 49Lanao deL Sur

OCCUPATIONAL AREA COMMUNITY-BASED TRAINING Streamer Printing 31T- shirt Printing 83Food Processing 80Basic Sales 17

Total 211COMMUNITY-BASED TRAINING AND ENTERPRISE DEVELOPMENTBaking Operations and Techniques 20Bag Making (Upgrade) 68Bakeshop (Cake and Pastries Making Upgrade) 38Bakeshop (Upgrade) 20Bakeshop Operation and Techniques 14

Total 160SCHOOL-BASED Caregiver 10Basic Information Technology (MS Word) 57Competency Assesors' Course 26Food and Beverage Service 13Basic Information Technology 95Front Office Service 54Housekeeping 25

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HRM Food and Beverage Service 50HRM Skills Training (Front Office Service) 26HRM Housekeeping 25Cellphone Repair and Maintenance 20Basic Sales 25Dressmaking 52Advanced Computer Literacy Program 4Basic PC and Internet Maintenance, Repair and Troubleshooting 5

Total 487

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