Jobless growth economic condition in the Philippines

The description jobless growth is one used for a developed country like the US. I never expected such a description be applicable to the Philippines. While that sounds good, there is about 10 million Filipinos who need jobs.

From the Manila Bulletin

Jobless Growth‘ Bogs Economy – ECOP

April 22, 2012, 7:53pm

MANILA, Philippines — The domestic economy has been on a “jobless growth” mode over the past four years as the much-vaunted growths in GDP have not really translated to increases in jobs creation commensurate to the growth of the new entrants in the labor pool, according to the Employers Confederation of the Philippines (ECOP).

“We have been on a ‘jobless growth’ since 2008,” said ECOP President Edgardo B. Lacson.

According to Lacson, the growth in new labor entrants has always been higher than growth in jobs generation since 2008, when GDP rates had been relatively robust. The economy as measured in terms of gross domestic product has consistently been posting encouraging growth despite global challenges.

Last year, the country’s GDP grew 3.7 percent and 7.6 percent in 2010. Despite the global financial crisis, the domestic economy still managed to grow 1.1 percent in 2009 from 4.2 percent in 2008.

ECOP data showed there were 593,000 new labor force entrants in 2008 but there were only 530,000 jobs created for that year. Additional labor entrants of 1.013 million were registered in 2009 as against 986,000 jobs creation in that year.

In 2010, new labor entrants were recorded at 1.001 million while jobs creation at 974,000. There were also 1.156 million new entrants in 2011 as against jobs generation of 1.112 million.

The discrepancy in new jobs creation as against increases in the labor force appeared small though, but Lacson emphasized this does not yet consider the existing unemployment rate.

Lacson explained that the country’s 7.6 % unemployment rate translates to 2 million Filipinos without jobs. In addition, the country’s underemployment rate is at a high of 20 percent. If the underemployed and the unemployed are combined they would total to 10 million unemployed Filipinos.

The government, however, has already changed the definition of underemployment paving the way for the inclusion even those not fully employed as employed thus, overstating the number of people employed, making the unemployment rate lower, Lacson said.

“But for all intents and purposes, an underemployed person should be counted as unemployed. This means, there are 10 million unemployed Filipinos and not 2 million,” Lacson pointed out.

Roberto Amores, chairman of this year’s 33rd National Confederation of Employers, said that for the country to get out from the “jobless growth” mode is to provide jobs or create jobs for at least 50 percent of the total 10 million unemployed Filipinos.

But Amores explained that it would difficult to attain this level if domestic industries continued to be threatened by clamor of wage hikes causing them instability.

“The labor sector must realize that,” he pointed out.

He noted that the country’s biggest job generator is the business processing outsourcing sector, but it is nearing a tipping point.

“The BPO sector is also facing competition from India, which has vowed to further enhance its BPO industry,” he said.

Other sectors like the manufacturing sector are going into automation and are reducing their number of workers. Besides, he said, fewer manufacturing firms have set up shops in the country with the onset of trade globalization as cheaper imports are coming in to the detriment of local industries, which could not compete globally.

The country is also starting to feel the pinch from ASEAN and, especially when the ASEAN Economic Community takes full effect by 2015, he added.

One source of new jobs creation, he said, would be the government’s huge infrastructure spending for this year.

“The infrastructure program of the Aquino administration is expected to spur jobs creation, at least temporarily,” he said.

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