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Skilled labor shortage threatens housing

The labor shortage that caused delays in the Duterte administration’s infrastructure program continues to persist under the current administration.

Despite the challenges, the country’s chief socioeconomic planner views it as a potential indicator of improving labor market conditions and rising wages.

“Yes, there’s scarcity but when jobs are becoming scarce, that’s good for labor because their wages rise. And that’s what you would expect in a rapidly growing economy,” Secretary Arsenio Balisacan of the National Economic and Development Authority (NEDA) said in a press conference.

In 2019, then President Rodrigo Duterte said many skilled workers, including those in construction, were leaving  the country to work overseas and earn bigger salaries.

The result, Duterte said, was a labor shortage that delayed key infrastructure projects and pushed up housing prices.

The administration of President Ferdinand Marcos Jr. counts 197 projects worth P9 trillion in its flagship infrastructure program. These projects, in turn, are expected to power up economic growth to 6.5 to 8 percent from next year until the end of President Ferdinand Marcos Jr.’s six-year term in 2028.

On the ground, Ibarra Paulino, executive director of industry group Philippine Constructors Association (PCA), said that apart from labor shortage, the local construction industry is also grappling with “a great deal of (skills) mismatch” that fail to meet the demands of the sector.

“The construction industry landscape has changed tremendously after the pandemic and we need to catch up with the industrial revolution,” Paulino said in an interview.

“Furthermore, the productivity of the Filipino workforce is low compared to other countries. There is a need to train and educate our workforce,” he added.

But Balisacan was unfazed by the labor gap, saying the scarcity is forcing companies to offer bigger salaries to workers in a bid to attract skilled personnel.

To fill the vacancies, the NEDA chief said state agency Technical Education and Skills Development Authority (Tesda) instituted several programs to address the upskilling needs and training of new workers.

“When the economy is growing fast and in a sustained way, eventually the surplus labor or the underemployed labor is depleted,” Balisacan said.

“And then employers would start paying more so that they attract those workers. So I would not see the growing scarcity as a problem,” he added.

By: Ian Nicolas P. Cigaral @inquirerdotnet

Impact on housing

Meanwhile, housing industry leaders are concerned that  the labor shortage and potential rise in wages of construction workers could further drive the cost of housing packages beyond the affordability of low-income earners.

In the long term, adoption of new labor saving construction technologies could mitigate the adverse impact, the leaders said.

In the short and medium term, however, the administration’s ambitious 4PH housing program for the poor will no doubt be seriously affected, they added.

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