An overall deterioration on the jobs front affirms the limits of service-driven growth
Growth in Philippine gross domestic product (GDP) in the third quarter is still not creating enough decent work for Filipinos and remains exclusionary. The services-driven growth is the reason for the prevailing jobs crisis in the country, research group IBON said
The GDP growth of 6.0% in the third quarter is faster compared to that of the first two quarters of the year. Government has already projected that growth will be even faster in the last quarter. According to IBON, however, this optimism seeks to give a positive spin to how economic growth of 5.6% in the first nine months of 2015 is still slower than in the same period last year.
Growth was driven by the services sector, which grew by 7.3%, with major contributions coming from trade, real estate, renting, and business activities. Agricultural growth was a tepid 0.4% while industry as a whole slowed to 5.4% from 7.8% last year. The manufacturing, construction and mining subsectors all registered slower growth from last year, the group noted.
But the overall deterioration on the jobs front affirms the limits of service-driven growth, IBON said. The jobs situation has gotten worse with virtually unchanged unemployment amid a drastic increase in underemployment. The number of underemployed Filipinos increased by almost a million (933,000) to 8.0 million in July 2015 from 7.0 million in the same period in 2014. The underemployment rate of 20.3% is higher than the 18.8% in 2010 at the start of the Aquino administration and the highest in a decade.
Officially reported unemployment meanwhile remained statistically unchanged at 2.7 million and with a 6.5% unemployment rate. These official underemployment and unemployment figures exclude Leyte province so the nationwide jobless numbers are even likely to be significantly higher.
IBON in any case estimates at least 4.3 million unemployed and an unemployment rate of some 10%, correcting for the official change in the definition of unemployment which reduces these figures without reducing the number of jobless Filipinos. Amid faster third quarter GDP growth, the group accordingly estimates the number of unemployed and underemployed Filipinos at some 12.3 million in July 2015.
The group also said that election spending may push GDP growth slightly higher but this kind of growth will remain exclusionary and not broad-based. Election-related growth will be mainly in election-related service sectors –media, transport and communications, hotels and restaurant, and trade. Only marginal sections of the manufacturing sector will benefit from spending on food, sundries and election paraphernalia.
As long as the country’s stubborn crisis of record joblessness remains unresolved, growth will remain exclusionary, IBON said. This can be resolved by ensuring land and government support for the majority of small farmers, by building genuinely Filipino industries, and by overhauling economic policy that only provides foreign investors with cheap Filipino labor, raw agricultural products, and underpriced mineral resources, the group concluded.