Under Duterte: Biggest contraction in employment in 20 years –IBON

January 20, 2018

by IBON Foundation


PH growth job-destroying in 2017

Going on its second year, the Duterte administration saw the largest contraction in employment in 20 years, research group IBON said in its year-end analysis of economic and political trends. This shows that generally rising Philippine economic growth remained unfelt by Filipinos amid a worsening jobs crisis, said the group. That government prioritizes pro-big business strategies will only aggravate economic underdevelopment and backwardness, and narrow decent job opportunities for Filipinos in the long run, said IBON.

Data from the Philippine Statistical Authority (PSA) shows that the number of employed Filipinos fell by 663,000 to 40.3 million in 2017 from the year before. This is the largest contraction in employment in 20 years or since the 821,000 job losses in 1997, said IBON. According to IBON employment re-estimates based on government data*, the number of unemployed rose by 66,000 to 4.1 million. The unemployment rate has also risen to some 9.2% and remains by far the highest in ASEAN, the group noted.

This, even if the Philippines was hailed by the World Bank as the “fastest growing economy in the Association of Southeast Asian Nations (ASEAN)”. The Asian Development Bank (ADB) lauded the country’s growth momentum, while Fitch Ratings upgraded the Philippines’ credit rating from “BBB-“ to “BBB” with a stable outlook at year-end 2017. Growth in Philippine gross domestic product (GDP) was at 6.7% in the first nine months of 2017, slower than the 7.1% recorded growth in the same period the year before, but still relatively high even for the last high-growth 7-year period.

IBON further noted that labor force participation rate (LFPR) dropped to 63.7%, the lowest in over three decades since the 63.1% rate during the severe economic crisis in 1985. According to IBON, the vast reserve army of unemployed gives employers huge leverage to peg wages at a low, combining with government’s cheap wage policy to keep wages down and contractualization unabated.

The lack of job opportunities, said IBON, continues to drive millions of Filipinos abroad for work. Preliminary data from the Philippine Overseas Employment Administration (POEA) reports 1,281,506 overseas Filipino workers (OFWs) deployed from January to September 2017, or equivalent to an average of 4,694 per day in the first three quarters of 2017. Millions of Filipinos also continue to be driven into informal, low-paying and insecure work.

According to IBON, the economy continues to rely heavily on shallow cheap labor sources of income as its main drivers, such as overseas Filipinos and workers in Business Process Outsourcing (BPO) firms and foreign-dominated export enclave manufacturing. This does not contribute in a meaningful way to building local technological or production capacity. The latter  would be the more stable source of decent job generation that can also contribute to national development, IBON said.

*IBON estimates seek to make official government figures more comparable with historical data.