1.1-M new jobs possible if government achieves 2014 growth targets

Posted at 08/20/14 7:18 AM

If the government attains its growth targets for the year, the National Economic and Development Authority (Neda) believes the Philippine economy can create over a million jobs this year.

At the Senate budget hearing on Tuesday, Socioeconomic Planning Secretary and Neda Director General Arsenio M. Balisacan said if the government’s 6.5-percent to 7.5- percent growth is attained this year, some 1.1 million jobs can be created by the economy.

“If we have a 6.5-percent growth this year, [it] will allow us to generate roughly 1.1 million jobs,” Balisacan said. “I really believe that if we succeed in realigning this budget and we’re moving in that direction, we can lick this unemployment problem.”

Balisacan said that while the projected number of new jobs that the economy can generate is smaller compared to the total number of employed and underemployed, pegged at around 10 million, these jobs could be better-quality jobs.

Data from the Philippine Statistics Authority (PSA) showed that around 3 million Filipinos are unemployed and 7 million are underemployed or are looking for better work opportunities. This is on top of the 500,000 to 800,000 new entrants that annually join the labor force.

Balisacan said, however, that the expected increase in jobs may be driven by the increase in wage and salaried workers. This is because the wage and salaried workers now account for 57 percent of the labor force, higher than the 54 percent recorded in 2010.

“We have seen that the proportion of the wage and salaried workers, which internationally is used as a proxy indicator of the quality of employment in the labor force in the economy, and it has been rising from 54 percent in 2010 to around 57 percent today and that we should continue to push [this development],” Balisacan said.

Balisacan said the government can continue supporting the increase in the number of wage and salaried workers by supporting research and development, as well as addressing infrastructure constraints in agriculture, the resurgence of the manufacturing sector and developing tourism, among others.

He said these areas could generate the most jobs in the economy. Agriculture, for one, accounts for a third, or an estimated 30.7 percent, of the Philippine labor force based on the April 2014 Labor Force Survey results, while industry, which covers manufacturing, accounts for 16.4 percent; and services, which covers tourism, 52.8 percent.

“The resurgence of manufacturing, developing tourism, linking farmers to the market through agribusiness developments, these are the areas where you can create high-quality jobs, and I really believe that if we succeed in realigning this budget, and we’re moving in that direction, we can lick this unemployment problem,” Balisacan said.

2014 growth

Balisacan also said in the Senate hearing that the government is maintaining its growth targets this year despite the negative impact of disasters on the economy.

The Neda chief said the country’s leading economic indicators, such as exports, imports and manufacturing output, have shown positive performance in the second quarter.

This, Balisacan said, can also support economic growth in the succeeding quarters this year. He stressed that growth in the second to the fourth quarters will be better than the 5.7-percent growth posted in the first quarter.

He added that the increase in government spending for reconstruction and rehabilitation works in Typhoon Yolanda-affected areas, as well as Bohol, which was also affected significantly by an earthquake last year, would prop up the country’s economic growth.

“Other leading indicators of the economy seem to be quite favorable, and we do think that the growth rate in the subsequent quarters from the second to the fourth quarters will be better than the first quarter,” Balisacan said. “We do think that the 6.5 percent to 7.5 percent is still doable.”

In the first quarter of 2014, the economy was significantly affected by the damage wrought by Supertyphoon Yolanda. The economy’s 5.7-percent growth was the slowest in nine quarters.

The first-quarter economic growth this year was the slowest since the fourth quarter of 2011, when the economy grew 3.8 percent. That year was also a nonelection year.

Balisacan said the slowdown was due to the lingering effects of Yolanda on the economy. The typhoon not only affected agriculture production but also disrupted supply chains that weakened industry heavyweights, such as food manufacturing.

Due to the slower-than-expected growth, the Philippines was overtaken by Malaysia in the first quarter. The Philippines is now only the third fastest-growing economy in Asia, after Malaysia, which grew 6.2 percent; and China, 7.4 percent.

For more Businessmirror stories, go here.