Despite its robust expansion, the Philippine economy failed to create new jobs, a report said on Friday.
“Despite the Philippine economy’s rapid expansion, the ‘jobless growth’ conundrum continues to baffle policy makers and analysts,” The Market Call said.
The economy grew by 6.8 percent last year and 7.8 percent in the first quarter of 2013, however, the unemployment rate in April 2013 rose to 7.5 percent, hitting an 11-quarter high with the loss of 21,000 jobs.
It said that the high jobless rate was attributed to the worsening employment condition in agricultural sector, which overshadowed the 3.8-percent and 1.9-percent gains in the industry and services sectors from year-ago levels.
“While the employment numbers for January and April this year have been disappointing, it usually takes two to three quarters of growth burst to get employment numbers to improve,” it stated.
However, The Market Call said that it remains upbeat about the employment prospects of the country for second half of the year.
It also expects job creation in the industry and services sector to track an upward trend, because of the country’s efforts in promoting integration of the manufacturing sector, aggressive expansion of construction and resilient performance of tourism and business process outsourcing industries.
Meanwhile, The Market Call still sees the country’s economy expanding by 7.5 percent or higher in the second quarter of 2013.
“Despite another fall in exports, the economy remains domestic demand driven, and our positive outlook for the second quarter and for the rest of the year remains intact, with construction and manufacturing sectors leading the way,” it said.
The projection was higher than the 6-percent to 7-percent growth target of the government. The report also attributed the higher gross domestic product (GDP) outlook to higher electricity sales.
“With Meralco [Manila Electric Co.] electricity sales growth in the second quarter widely out-stripping the first quarter, the manufacturing sector should positively combine with construction and the mining sectors to lead the second GDP growth to 7.5 percent or higher,” it stated.
The report noted that for the first two months of the second quarter, Meralco recorded an average gain of 7.3 percent, higher compared to the measly 1.2-percent uptick in the first quarter.