Given the size of the sector and its role in the economy, there is a need to be proactive and formulate ways to increase productivity in services. Recognizing the inherent heterogeneity of the sector, relevant policy issues include understanding the nature and causes of low productivity and underemployment in services, the mechanisms including barriers to the movement of workers from less productive to more productive economic activities, and identifying lessons and best practices to help improve the design and implementation of labor market interventions.
As the services sector continues to expand, labor productivity must increase as well to ensure that the structural transformation of the economy leads to higher incomes for everyone, fostering broad-based and inclusive growth as articulated in Ambisyon Natin 2040 (NEDA 2017).