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.
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.