‘Even 7.5% growth will not create enough jobs’

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Unemployment is bound to persist even if the economy proves resilient enough to hit the highest target growth rate this year, given the huge number of jobless adults in the country, the National Economic and Development Authority (NEDA) said on Tuesday.

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NEDA Director-General Arsenio Balisacan told the Development Budget Coordination Committee (DBCC) at a Senate briefing on the 2015 National Expenditure Program (NEP) that the government’s 2014 growth target range of 6.5 percent to 7.5 percent can only generate 1.1 million new jobs.

This number appears too little to make a dent on the unemployment rate.

A survey conducted by the Social Weather Stations (SWS) in June this year found that there were about 11.8 million unemployed adults in the country, representing about 25.9 percent of the population, up from the 25.7 percent recorded in the first quarter of the year.

But Balisacan, who is also the Socioeconomic Planning Secretary of the Cabinet of President Benigno Aquino 3rd, said the unemployment rate is expected to ease when the government resumes implementation of its projects in infrastructure, manufacturing, agri-business and other areas with high employment potential.

The agriculture sector alone covers one-third of the country’s labor force. Based on data provided by NEDA, however, growth in the agriculture sector for the first quarter of 2014 was less than 1 percent.

Balisacan attributed the dismal performance of this sector to disasters that hit the country in the last quarter of 2013, including Super Typhoon Yolanda, which devastated the Central Visayas.

Senate President Franklin Drilon expressed alarmed over the poor performance of the agriculture sector.

“I’m really concerned that the agriculture sector is only expanding at the rate of less than 1 percent,” Drilon said.

He noted that having “two heads” at the Agriculture department did not make a difference in the sector’s performance.

Drilon was referring to Agriculture Secretary Proceso Alcala and Francis Pangilinan, who was recently appointed as Presidential Assistant for Food Security and Agricultural Modernization.

Besides slow growth in the agriculture sector, the Senate president also raised concern about underspending by the government in 2014 which he said, if not addressed, could further be aggravated by the Supreme Court’s (SC) decision on the Disbursement Acceleration Program (DAP).

“For the first quarter of 2014, growth in the gross domestic product is only 5.7 percent, which is lower than the 7.7 percent growth rate we achieved in the same period in 2013,” Drilon said.

He added that a drop in government spending was ref lected in the decline in government consumption for the first quarter of this year, which reached only 2 percent, way below the 10 percent recorded for the same period last year.

“Members of the bureaucracy now have apprehension about taking the initiative because they may face charges stemming from the DAP decision [by the Supreme Court]. Whether you like it or not, the SC decision on the DAP had a chilling effect on the government expenditure program,” Drilon said. The court declared the disbursement program unconstitutional.

Budget Secretary Florencio Abad said a slowdown was seen in the first quarter of the year, although he added that the government is now catching up and is expected to recover during the remaining months of 2014.

Abad added that the drop in spending was mainly due to the calamities that hit the country, preventing the government from implementing various approved projects in the devastated areas.

SuperTyphoon Yolanda alone, he said, affected 44 provinces and the government has not been able to implement projects in these areas.

But Abad added, the proposed P2.606-trillion national budget for 2015 will intensify the government’s drive to achieve inclusive and sustained economic growth.

”Certainly our work is not yet done,” he said, adding that sustaining economic growth to make it truly felt by the people is one of the two major challenges that the Aquino Administration aims to address in its two remaining years.

“The second challenge is how [to]sustain and intensify the reforms we have already rolled out,” Abad said.

The Budget chief added that remarkable growth must translate into real and tangible benefits for the people, especially the poor.

”We have to ensure that public funds go not only to our priority programs for poverty reduction and economic expansion but also to priority localities where the poor are and where we must create more opportunities,” Abad said.

WITH PNA

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6 Comments

  1. The unchecked increase every year in the population is at the heart of the problem. Millions of new job seekers every year way outstrip the econominy’s ability to absorb them. it also explains why the increase in the overall GDP of the country hardly benefits inviduals, as it has to be spread over an ever large number. (apart that is from the continuing gross inequalites here.)

  2. This government or any preceeding government seems to do everything to make business more expensive & difficult to get into because of the cost. In 190 i was a taxi driver in birmingham england, I bought a brand new taxi & because of that the council gave me a taxi plate. If you couldnt afford to buy a brand new taxi you buy a second hand taxi with the plate. But here you have to buy the franchise & that costs P180,000. This government even takes income tax off people only earning P10,000 per month. People on low income like that should be income tax exempt, but the reason all this money is taken off every single person is because of the corruption in this country. People in power want to be able to steal money & its easier to steal it when there is more of it. Something has to be done in this country as its disgusting. I would like to tell any senator try living on P10,000 per month. Dont forget you have to pay rent as its not ebnough money to buy a house. They need to understand that the poor need helping not hindering.

  3. joseph flores on

    Very alarming. the Honorable Sen Drilon seem not to understand why there is a dismal growth in agriculture, HOW Much agriculture budget has gone thru scams? instead of being used to what it is intended for? Many agriculture projects and programs by the government are very good in paper but hardly felt by farmers. Agricultural lands are being converted into subdivisions and industrial centers, the honorable senator is alarmed? all those in HIGH government position are alarmed? DONT JUST BE ALARMED, DO SOMETHING.

  4. Need to dismantle the Fil-Chinese business cartel,who invest the money they make here to China instead of reinvesting it here to create more jobs.Need that Rep. Aggabao bill for 100% ownership for foreign investor to break Fil- Chinese monopoly on the economy.Very rich and dont even pay their employee decent wages,greedy and selfies.Change your ways be part of the solution for progress.

  5. Carlo L. Adan on

    What a mentally dishonest person, liar, hypocrite and partisan-poliics demon this Franklin Drilon is. He is worried that the GDP growth has declined to “only 5.7%, which is lower than the 7.7 percent growth rate we achieved in the same period in 2013.” .
    Because President Aquino and DBM Secretary Abad, his partners in ensuring the victory of the Liberal Party by supplying LP politicians with piles and piles of money, suspended and cancelled ongoing and aout-to-be-launched infrastructure and job-creating projects soon after Aquino became president in 2010, the GDP growth rate dropped to 3.674% in 2011, down from the Davos-crowd and World-Bank admired 7.63% GDP growth rate in 2010 that was the result of the efforts and policies of the previous GMArroyo regime and of curse our OFWs’ remittances and the “sound economic fundamentals” maintained by the Arroyo administration and the Central Bank. Aquino-Abad cancelled and suspended the GMArroyo projects so they could amass “savings” and use it as illegal and unconstitutional DAP fund allocations to LPs in provinces like Drilon’s own Iloilo.
    Did Drilon ever speak about the crime committed by Aquino-Abad in making the GDP growth rate fall from 7.63% in 2010 to 3.64% in 2011? He did not. But he agreed in telling the lie that the Philippines was “the sick man of Asia” and Aquino was bringing our country back to good health!
    May God punish them for these lies and for the poverty, sickness and even deaths of poor people who could have been saved if the infrastructure projects okayed and begun during the Arroyo administration were not cancelled and suspeneded by Aquino and Abad so they could have money for their evil DAP!

  6. Manny F. Reyes on

    Birth control and emigration will help a lot to ease this unemployment and poverty disease.

    RP is a third the size of USA in population in a land area 1/50th its size. Incredible!