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ON May
31, the National Statistical Coordination Board
announced that the Philippine economy grew by 6.9
percent in the first quarter. Then on June 15, the
National Statistics Office (NSO) announced that based on
the April labor force survey, unemployment went down
significantly.
Those
two statistical releases seem to indicate that, finally,
the Philippine economy is strengthening and has started
to produce more jobs. Maybe—but let’s not celebrate yet.
A keener
look at the numbers seems to indicate that our recovery
remains fragile and skewed. Those gains in jobs could
evaporate unless the government can attract substantial
investments in the next three years.
According to the April labor force survey, the country’s
unemployment rate, using the International Labor
Organization definition, went down from 8.2 percent to
7.4 percent.
That’s
not really miraculous because it simply means seven out
of a hundred are jobless, compared to eight out of a
hundred a year ago. In absolute terms, there are 33.7
million employed people in April this year, compared to
32.7 million in the same month last year—translating to
about a million extra jobs.
But
given our chronic high jobless rate, that’s an
encouraging sign—more so because underemployment has
gone down by almost 7 percentage points from 25.4
percent to 18.9 percent.
Lower
underemployment could be interpreted to mean there are
fewer workers who feel dissatisfied with their jobs
during the survey. The underemployed are the ones who
think they need more sidelines, more overtime, more
working hours, or new high-paying or more satisfying
jobs. Their percentage share is down.
Are
wages rising? We can only speculate to that effect. That
is quite observable in the case of the fast-growing
industries like the call centers, other cyber services
and electronics.
It’s
also possible that the continued flow of skilled workers
abroad has started to tighten labor supply, especially
among skilled workers. Or it’s also possible that the
6.9-percent growth rate may have really created more job
opportunities. It’s quite obvious, given the fact that
there are more than a million employed people in April
this year than in April last year.
The
decrease in underemployment may suggest that those who
are already working simply took advantage of the
opportunity by moving into those relatively
better-paying jobs—maybe. We say “maybe” because, this
time, the labor force survey doesn’t provide much detail
the way it used to, and we can’t help but wonder what
the NSO is trying to hide.
Anyway,
if seen by industry or sector, it’s obvious that the
share of agriculture in employment has increased. So the
farms are contributing significantly despite the fact
that agricultural growth has been stable at 4.2 percent.
The
share of construction is also rising. This is quite
consistent with the supposed recovery in the real-estate
sector. And then it’s obvious that private households
are hiring more. We are not disparaging the farms, but
we know that farm work, as well as construction, tends
to be seasonal. It was summer and that’s when people
usually start repairing their houses and building up
buildings.
By
occupation or skills, it’s clear that the percentage
share of machine operators and assemblers rose. It seems
to suggest the factories are a little busier. Laborers
and unskilled labor also have the same trend. This is
quite obvious because the farms employ lots of seasonal
workers and the construction sector usually hire
unskilled labor in summer to do manual and menial jobs.
By class
of workers, there is clearly an improvement in the share
of wage and salary earners, while that of own- account
workers declined.
Is the
availability of quality jobs improving? One could be
tempted to think that way. Private establishments are
definitely hiring; so are private households. The only
problem is that those employed in private households are
mostly unpaid family members. There’s the rub. So it
seems the small guys here are not yet the real
beneficiaries of the higher growth rate.
Underemployment has gone down but the gains are largely
confined in the industry and services. That seems to
validate our earlier observations that so far the major
beneficiaries of the recent surge in the economy are
urban dwellers. And they are concentrated in the
35-years-and-over category, indicating that those who
benefited most were probably supervisory or managerial
level workers. Underemployment in the farm sector has
actually worsened.
In
summary, the major beneficiaries of the 6.9-percent
growth are primarily those who are urban dwellers
working in the industry and services sectors, mostly in
the supervisory and managerial levels. The secondary
beneficiaries are those engaged in the farm,
construction and real estate sectors whose jobs are
probably seasonal or cyclical. More so because those
construction jobs were probably triggered by electoral
considerations and may therefore vanish once the
government feels they are not collecting enough
revenues.
How
about the other sectors of the economy? The share of
manufacturing, mining and quarrying, and electricity,
gas and water either went down or stayed the same. The
same trend could be observed in wholesale and retail;
hotels and restaurants; transport, storage and
communications; and finance.
This
should be a surprise given the generally higher growth
in the economy. Well, if one looks at capital formation
in the country’s national-income accounts, which is
still in the negative, the trend seems to indicate that
we don’t have the critical mass of investments yet to
propel the economy forward.
That
means that if the government really wants to spread the
benefits of growth, it has to attract more investments,
especially foreign direct investments, on a scale that
our Asian neighbors do. That would, in turn, require
really serious investments promotion and significant
reforms to improve the investment climate.
Is the
government up to the challenge? That’s the question. |
