3rd Q GDP sharpest drop since 1997 : Economic growth notably slowing amid increasingly poor quality work

Once again, the 3rd quarter results affirm why the country cannot and should not rely on external sources of growth.

IBON News | 26 November 2010 | The reported 6.5% growth in gross domestic product (GDP) in the 3rd quarter of 2010 is welcome for still being ositive but is nonetheless worrying for being the sharpest turnaround in quarterly growth since the Asian crisis over a  decade ago. Research group IBON also said the growth is disturbing for being accompanied by a marked deterioration in the quality of work available, aside from grossly insufficient job creation.

The 6.5% 3rd quarter GDP growth is measured year-on-year and is a 1.7 percentage point drop from the revised 8.2% 2nd quarter figure. This is the biggest recorded drop between the 3rd and 2nd quarters in the past decade-and-a-half since the Asian crisis in 1997 where the closest falls were seen in 2004 and 2007 (1.5 percentage point drop), and 1997 and 2002 (1.3 percentage points).

Consecutive quarterly growth rates that are measured year-on-year are not strictly comparable but the conclusion is affirmed by looking at seasonally adjusted quarterly growth rates which are computed to allow comparison between consecutive quarters. Seasonally adjusted GDP contracted by 0.5% in the 3rd quarter which is a drastic 1.9 percentage point drop from the 1.4% growth in the 2nd quarter of the year. This is the worst 3rd quarter turnaround since 1997 when there was a 3.0 percentage point drop from 2.7% growth in the 2nd quarter to a 0.3% contraction in the 3rd quarter.

From a purely growth perspective, this drastic turnaround could be ominous if they indicate that the presumed drivers of growth in the economy are failing to deliver. The manufacturing subsector was the biggest contributor to growth, expanding 9.3% and contributing 6.3 percentage points to the final GDP figure. Yet this 9.3% growth continues a slowdown from 12.7% in the 2nd quarter and 20.4% in the 1st quarter – possibly showing the effects of the winding-down of stimulus programs especially in the US and Europe, both major export markets for manufactured products.

Once again, the 3rd quarter results affirm why the country cannot and should not rely on external sources of growth. Earnings of overseas Filipinos and from business process outsourcing (BPO) service exports are slowing in the first three quarters of 2010. Net factor income from abroad, mostly consisting of overseas Filipino incomes, only grew 10.3% compared to 31.6% growth in the same period last year. Business services growth, which includes BPOs, meanwhile slowed to 9.4% from 11.8% last year.

The employment situation however remains very poor and underscore how growth in the economy continues to be exclusionary. In July 2010, the labor force grew year-on-year by only 563,000 (1.5% growth) which is markedly less than the 1.09 million increase (2.9%) in the same period in 2009. Taken in the context of record-high unemployment rates for a decade now, this could indicate that more people have simply stopped looking for work that is not there to be found.

Some 777,000 jobs were reported created in July 2010 from the year before. Yet 377,000 of these were in the agriculture sector which saw a deep 2.5% contraction in the third quarter of 2010, which implies a drastic drop in average earnings in a sector already marked by widespread poverty. In contrast, the high-growth manufacturing sector created just 47,800 additional jobs.

The disjointedness of growth and decent jobs is also highlighted by the very poor quality of work generated. In July 2010, the number of own-account and unpaid family workers – or those in insecure, low-paying and even hazardous work – drastically increased by 1.12 million. There are now 12.6 million own-account workers and 4.3 million unpaid family workers. On the other hand, the number of wage and salary workers fell by 330,000. It appears that much of this is accounted for by the large drop in domestic household help whose numbers fell by 281,000, perhaps even indicating how households are increasingly unable to afford this.

The growth has also created mainly part-time jobs or work of less than 40 hours per week – accounting for 571,000 or three out of four (73%) of new jobs created in July 2010. While it was reported that underemployment has fallen, this is likely driven more by workers discouraged from finding additional work than reflective of the existing quality of work. (end)

GDP sa ikatlong kwarto, pinakamatarik na pagbulusok mula 1997: Paglago ng ekonomya, kapansin-pansing bumabagal sa gitna ng lalong mahinang kalidad ng trabaho

Ang inulat na 6.5% paglago sa gross domestic product (GDP) sa ikatlong kwarto ng 2010 ay kagalak-galak sa pagiging positibo subalit kabaha-bahala dahil sa pagiging pinakamatarik na pag-atras ng pang-kwartong paglago sapul ng Asian crisis mahigit isang dekada na ang nakaraan. Sinabi ng grupong panaliksik na IBON na kabaha-bahala ang paglagong ito dahil katambal ng kapansin-pansing paglala ng kalidad ng trabahong mayroon, bukod sa lubhang kasalatan sa paglikha ng trabaho.

Ang 6.5% paglago ng GDP sa ikatlong kwarto ay sinukat sa kada taon at 1.7 porsyentong puntong pagbagsak mula sa nirebisang 8.2% pigura sa ikalawang kwarto. Ito ang pinakamalaking nakatalang pagbaba sa pagitan ng ikatlo at ikalawang kwarto sa nakaraang dekada at kalahati sapul ng Asian crisis noong 1997 kung saan ang pinakamalapit na pagbagsak ay nakita noong 2004 at 2007 (1.5 porsyentaheng puntong pagbaba), at 1997 at 2002 (1.3 porsyentaheng punto).

Hindi istriktong kahambing-hambing ang magkasunod na pang-kwartong tantos ng paglago na sinukat sa kada taon, subalit ang konklusyon ay inaapirma sa pamamagitan ng pagtingin sa seasonally adjusted na tantos ng paglagong pangkwarto na kinokompyut upang maging posible ang pagkumpara sa pagitan ng magkasunod na kwarto. Ang seasonally adjusted na GDP ay lumiit nang 0.5% sa ikatlong kwarto na drastikong 1.9 porsyentaheng punto na pagbaba mula sa 1.4% paglago sa ikalawang kwarto ng taon. Ito ang pinakamalalang pagbabago sa ikatlong kwarto sapul noong 1997 kung saan nagkaroon ng 3.0 porsyentaheng puntong pagbaba mula sa 2.7% paglago sa ikalawang kwarto  papunta sa 0.3% pagliit sa ikatlong kwarto.

Mula sa pawang perspektiba ng paglago, ang drastikong pagbabago na ito ay maaaring makasama kung ipinapakita nitong ang iniisip na tagatulak ng paglago sa ekonomya ay hindi gumagana. Ang subsector ng manupaktura ang pinakamalaking tagapagbahagi sa paglago, na lumaki nang 9.3% at nagbahagi ng 6.3 porsyentaheng punto sa pinal na pigura ng GDP. Subalit ang 9.3% paglagong ito ay patuloy na bumabagal sa 12.7% noong ikalawang kwarto at 20.4% sa unang kwarto – na posibleng nagpapakita ng mga epekto ng pagbawas ng mga programang pampabuhay laluna sa US at Europa – parehong pangunahing pamilihang eksport ng mga produktong minanupaktura.

Muli, ang mga resulta ng ikatlong kwarto ay nagpapatibay kung bakit ang bansa ay walang kakayahan at di dapat sumandig sa mga panlabas na pagmumulan ng paglago. Ang kita ng mga Pilipino sa ibayong dagat at mula sa pag-eksport ng serbisyo sa business process outsourcing (BPO) ay bumagal sa unang tatlong kwarto ng 2010. Ang netong factor income mula sa ibayong dagat, na halos binubuo ng kita ng mga OFW, ay lumago lamang ng 10.3% kumpara sa 31.6% paglago sa parehong panahon noong nakaraang taon. Ang paglago sa business services kabilang yaong sa BPOs naman ay bumagal sa 9.4% mula 11.8% noong nakaraang taon.

Ang sitwasyon ng empleyo ay nananatiling napakatumal at nagbibigay-diin kung papaano ang paglago sa ekonomya ay nananatiling may iniitsapwera. Noong Hulyo 2010, ang pwersa sa paggawa ay lumaki sa kada taon nang 563,000 (1.5% paglago) na kapuna-punang mas kaunti sa 1.09 milyong pagtaas (2.9%) sa parehong panahon noong 2009. Sa konteksto ng wala pang kapantay na mataas na tantos ng disempleyo sa loob na ngayon ng isang dekada, maaaring ipinapahiwatig nito na mas maraming tao ang pawang tumigil na sa paghanap ng trabaho na sadyang di naman matatagpuan.

May 777,000 trabahong diumano’y nalikha noong Hulyo 2010 mula sa nakaraang taon. Subalit 377,000 nito ay sa sektor ng agrikultura na kinakitaan ng malalim na 2.5% pagliit sa ikatlong kwarto ng 2010, na nagpapakita ng drastikong pagbagsak sa abereyds na kita sa sektor na namarkahan na ng malawakang kahirapan. Kabaligtaran nito, ang sektor ng manupaktura na lumago nang husto ay nakalikha lamang ng 47,800 dagdag na trabaho.

Ang kawalang-kaugnayan ng paglago at disenteng trabaho ay pinapatampok rin ng napakasamang kalidad ng trabahong nalikha. Nitong Hulyo 2010, ang bilang ng own-account at unpaid family workers – o yaong mga nasa walang kaseguruhan, mababa ang sahod at delikado pa ngang mga trabaho – ay drastikong dumami nang 1.12 milyon. Mayroon na ngayong 12.6 milyong own-account workers at 4.3 milyong unpaid family workers. Sa kabilang banda, ang bilang ng mga manggagawang de-sweldo ay bumagsak nang 330,000. Lumilitaw na karamihan nito ay maipapaliwanag ng malaking pagbagsak sa bilang ng mga kasambahay na bumagsak nang 281,000, na posibleng nagpapakita rin na lalong hindi na ngayon kinakaya ng mga sambahayan na gumastos para rito.