Higher funding support for priority sectors and last year’s economic gains that led to the better-than-expected job generation in 2014 are likely to increase employment opportunities this year, according to a local think tank.
This, coupled with the low oil prices, will kick up consumption further and boost the country’s gross domestic product (GDP) growth to between 7 percent and 7.5 percent this year, the First Metro Investment Corp.-University of Asia and the Pacific (FMIC-UA&P) Capital Markets Research said in its latest Market Call.
“While there remain challenges that the Philippines has yet to address [i.e., access to education, health care and human-resource development], the 2014 employment data offer encouraging labor conditions for 2015,” the FMIC-UA&P Capital Markets Research said.
The Department of Labor and Employment (DOLE) projected a total demand of 4.5 million workers until 2016. “The proposed budget expansion for the identified priority sectors and the proposed development of a number of business zones should bode well for the country’s labor force,” it added.
The think tank cited data from the Philippine Statistics Authority (PSA), which showed that the economy was able to breach its 1-million target for three consecutive quarters in 2014.
In October 2014, around 1.04 million jobs were created. This pushed down the country’s unemployment rate to 6 percent, the lowest in 10 years. However, the think tank said the employment structure of the country hardly changed with services still accounting for over half of total employment.
The PSA data showed that the services sector continued to account for the largest share of total employment at 53.7 percent, followed by the agricultural sector at 30.8 percent and the industry sector at 15.6 percent.
The rosy job prospects in the Philippine economy, coupled by cheap oil prices, will likely drive up consumption spending this year. Apart from these, FMIC-UA&P Capital Markets Research said overseas Filipino workers’ remittances, which hit the highest monthly level since a decade ago, will also contribute to the increase in domestic consumption.
“We expect more bubbly consumer-spending in the coming quarters as a result of high job generation and drastically lower inflation due to the collapsing crude-oil prices. But investments should also regain buoyancy as lower oil prices mean better profits and construction regains momentum with a bunch of large PPP [public-private partnership] projects finally taking off,” the think tank said.
In its first briefing for 2015, FMIC-UA&P Capital Markets Research said strong consumption spending could boost the country’s GDP growth to between 7 percent and 7.5 percent this year.
In 2014 the local think tank estimated GDP might have reached 6 percent, while fourth-quarter GDP growth might have hit 6.4 percent.
The country’s national income accounts, or official GDP data for the fourth quarter and full-year 2014, will be released on Thursday.
2 comments
Jobs are plenty but the salaries are very low. Filipinos still are forced to work overseas to provide their families a substantial amount of income. Consumerism is very high in this country but will it be enough to counter the poor infrastructure growth or lack thereof in a burgeoning economy?
agree on this sir,
employers take advantage on contractualization,
before it encourages employment, but the downside is underemployment