• Illusions of ‘progress and prosperity’

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    [This is the first of Rick Ramos’ Saturday columns in The Manila Times.]

    A very serious issue which President Benigno S. Aquino III did not mention in his State of the Nation Address (SONA) is the huge problem of unemployment and under-employment in our country. There are not just enough decent-paying jobs that will employ the labor force of more than 40 million Filipinos. Reuters reported in an article last June that the Philippines has the highest unemployment rate in Southeast Asia. We have 7.5 million Filipinos without work and  another 4.5  million  underemployed who have jobs, but are not  earning enough to meet their basic needs.

    All told, there are a total of 12 million  Filipinos who have no jobs and those who are working, but with insufficient income to sustain their needs and that of their families. The figure corresponds to the incidence of poverty that is close to 30  percent  or some 30 million Filipinos living in abject poverty out of a burgeoning population of 100 million people. The figure of 30 million is equivalent to the population of five countries, such as Sweden, Norway, Denmark and Finland in Scandinavia  plus the Republic of Ireland.

    With an average size of four-five members (4.6) per family, the 30 million poor Filipinos correspond to  some six to seven million families in dire straits. This is a very serious situation that cannot be hidden from the Filipino people by focusing on the alleged “rapid growth” of the economy that one member of the Aquino Cabinet declared. Besides, if there is real “rapid economic growth,” then why is our unemployment rate the highest in the Asean?

    In the past three years of the Aquino administration, a total of more than Five million of our countrymen have left for work abroad as Overseas Filipino Workers (OFWs). Based on the statistics of the Philippine Overseas Employment Agency (POEA), 1.5 million left in 2010; 1.7 million in 2011; and 2.0 million in 2012. (POEA figures rounded to nearest hundred thousand). From 1.5 million in 2010 to 2.0 million in 2012 is a sharp increase of more than 30 percent in the number of OFWs finding work outside the country. So where is the much-vaunted growth in the Philippine economy that does not provide enough jobs to lessen the number of OFWs leaving?

    Hence, the question is why two million Filipinos left in 2012 for jobs abroad when there is supposed to be an impressive economic growth of 6.8  percent in our Gross Domestic Product (GDP). Something seems to be amiss in the story. Why would an average of 5,500 Filipinos leave the country each day of the year if the Philippines has “rapid economic growth,” as one pathetic Cabinet-rank Malacañang official boasted recently on national television (ANC).

    In Thailand, it is a different economic story. You will not see Thais in diaspora spread all over the globe like Filipinos. In fact, there are now Cambodians, Laotians and Burmese people working in the factories in the “Land of Smiles, “ as well as in the service sector. In fact, thousands of Filipinos have been working in Thailand since the 1990s as engineers,
    teachers, musicians and other professionals.

    The simple reason why our country does not have the elusive “inclusive growth” is that our GDP growth is due to consumption and not to production in agriculture and manufacturing  that provide millions of  jobs to the labor force in other countries.

    Increased sales of real estate and mostly imported consumer goods are paid by money from the  remittances of  Filipinos abroad  amounting to over $20 Billion or close P1.0 Trillion each year. Thus, the “progress” we see in our country is not created from within, but from outside funds coming from overseas.

    Even in the tourism or hospitality industry where the Philippines should be ahead of our neighbors in Southeast Asia, we have been left behind by five Asean countries— Singapore, Malaysia, Thailand, Indonesia and Vietnam.  The 4.3 million foreign guests who visited  our country in 2012 only earned us a measly $2.7 Billion. (Half of the tourist arrivals are  balikbayans or returning Filipinos here for a visit.)  Compared to Thailand’s 22 million and Malaysia’s 25 million tourists, our four million is only a fraction of one-fifth to one-sixth.

    Hence, the “progress” we see with shopping malls, restaurants, housing subdivisions, high-rise condominiums is but an illusion of prosperity. The wealth was not generated internally, but  by funds coming from more than 10 million Filipinos overseas who send money home for their family’s expenses and also for investments in real estate and business. Other than the OFWs scattered around the world, an estimated 50  percent of the total remittances comes Filipinos in the United States (42  percent) and  Canada (8  percent) in North America, most of whom are immigrants. Filipino immigrants in Australia, New Zealand and the United Kingdom also remit a lot of money.

    It is truly ironic that the semblance of “progress” we see  has little to do with the work of the Aquino Government. In fact, it is the precisely the poor performance of Government—both corrupt and incompetent—that makes millions Filipinos leave the country each year for jobs abroad. The phenomenon of the Filipino Global Diaspora is the simply the aftermath of almost half a century the dismal mismanagement of our beloved country.  Due to lack of employment and business opportunities at home, the only alternative of our countrymen is to seek work overseas.

    Millions of Filipinos would think that there is “progress” in the Philippines because of the ubiquitous malls and other buildings sprouting in Metro Manila and environs and other urban centers. Other than the already developed Central Business Districts (CBDs) in the Ayala Center in Makati and the Ortigas Center, there are newer big developments such as in Fort Bonifacio in Taguig City and Filinvest City in  Muntinlupa together with the Alabang Town Center (ATC).

    A newspaper columnist known once commented of his visit to Vietnam. He did not understand why Filipinos think of our neighbor as progressive when they do not have all the malls and restaurants that we have.  What he does not know is that Vietnam is the world’s  second  biggest exporter of rice and corn  and even the biggest producer of Robusta coffee. Vietnam also has more than double in export revenues than the Philippines at $114.3 billion and 50  percent more the number of tourist arrivals at 6.85 million. Even in the World Bank Index on Logistics, Vietnam is  ahead of the Philippines, which can be confirmed by the World Economic Forum (WEF) that shows it is ahead in Infrastructure Quality in airports and seaports.

    The 7.8  percent GDP growth of the Philippine economy for the First Quarter (Q1) of 2013 was mentioned in the SONA last Monday. The impressive economic growth was brought about by the usual consumption funded by remittances from Filipinos overseas and the election-related expenses of the recent May midterm elections. Of course, it is not realistic to expect President Aquino to tell the Filipino people that his administration has very little to do with the “rapid growth” he claima in the Philippine economy.

    [Rick B. Ramos wrote a column for BusinessWorld in the 1990s until late 2001. He started as a free-lance writer in the 1980s contributing to various mainstream publications and to the alternative press during the remaining years of the Marcos regime. Rick has also done consulting work for 15 years that included providing advisory services to a respected Filipino senator and the embassy of a European Union (EU) member country.  He has been active in the non-profit sector since the early 1990s with  NGO work on the environment.  In 2010, he organized the Pilipinas Sandiwa Heritage Foundation, Inc. (PSHFI) that seeks to harness the vast potentials of Filipinos overseas to help the homeland and getting them involved in national affairs. PSHFI likewise would help them rediscover their rich cultural heritage and appreciate their Filipino identity to achieve unity as a people.]

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    1. Another point omitted in the discussion is the sorry state of institutional capacity of our government to open the economy to market competition and promote inclusive growth in investment and trade. 80% of this country’s wealth is owned by just 50 families who control the biggest companies and kill the smaller businesses. Instead of encouraging foreign investment in mining, manufacturing, services, etc, the 50 families control the regulatory and investment policies thereby limiting competition and maintaining their strangehold of the economy. This is the reason why 12 million Filipinos can never find employment. Read the book “Why Nations Fail” (Acemoglu/Robinson) and you will see I am talking about.