The news that the unemployment rate in the Philippines rose to 7.5 percent in April is definitely bad news for the Aquino administration.
With an increase of 0.6 percent compared to the 6.9-percent rate during the same period last year, the 7.8-percent gross domestic product (GDP) growth registered during the first quarter of this year is no longer a big deal.
Preliminary results of the Labor Force Survey (LFS) of the National Statistics Office (NSO) showed that Metro Manila and Calabarzon (Region 4-A) posted rates of unemployment higher than 10 percent. This is surprising because there is an upswing in the construction of malls, buildings and offices in Metro Manila, while the Calabarzon has always enjoyed a spillover of economic growth from the metropolis.
The sadder news is that the LFS showed that 21.3 percent of the unemployed were college graduates. This is expected to increase as universities, colleges and diploma mills churn out more graduates at the semestral break and before the summer vacation.
The LFS further reported that 14.6 percent of the unemployed were college undergraduates, and 31.7 percent were high school graduates.
The survey revealed that the number of employed Filipinos went down to an estimated 37.819 million in April 2013, or an employment rate of 92.5 percent. This was down last year’s rate of 93.1 percent or 37.840 million, a decrease of about 21,000 employed workers. Among the regions, Metro Manila and Calabarzon recorded an employment rate of below 90 percent.
NEDA Officer in Charge and Deputy Director General Emmanuel Esguerra said that to help solve the country’s worsening unemployment problem, what needs to be done is improve the employability of job applicants, particularly those with secondary and tertiary education. He added that there is a need to establish a more effective partnership among firms or establishments, academe and the government that will provide useful inputs to the curriculum design of Philippine schools.
While the NEDA official’s advice is noteworthy, what really needs to be done to create quality jobs is to accelerate spending on infrastructure, attract more foreign investments, and prop up the country’s industrial sector, which in the first place has vast untapped employment potentials.
The latest LFS survey showed workers in the industrial sector made up 16.1 percent of total employed workers. This contrasts the services sector employing 52.6 percent of the total employed, and the agricultural sector with 31.3 percent.
The country remains a laggard in attracting foreign direct investments, with the Bangko Sentral ng Pilipinas (BSP) announcing on Monday that FDI recorded $1.3-billion net inflows in the first quarter of the year. The BSP said the FDI level in the first three months of the year was lower by 8.5 percent than the $1.4 billion recorded in the same period last year.
The low percentage of total employed workers in the industrial sector and lagging FDI levels show that the Aquino administration still has much work to do, and that it should stop making a big deal out of first quarter GDP figures.
Even the stock market, which has ridden on the highs of impressive GDP growth figures in 2012, has also realized the folly of relying on traditional economic data to prop up bull runs. On Tuesday, the Philippine Stock Exchange index fell by 4.64 percent or 318.95 points to 6,556.65. Almost a month ago, the stock index seemed poised to break the 7,500-point mark.
Among the things the Aquino administration must do is level the playing field so that more foreign investors would be willing to put their money in the Philippines; help industrial groups formulate their roadmaps, which will also be supported by other government agencies; and harmonize the actions by the legislature to make sure new laws encourage industrialization and attract more foreign investors.
The last one is very important, especially if one takes into account that during the campaign period, a lot of the senatorial candidates (who are now elected senators) made job creation and reducing poverty their battle cry.
We hope that the winning senators who made such promises realize that job creation cannot be legislated, and reducing poverty cannot be solved by undertaking pet projects through their pork barrel funds.
Much work remains to be done to reduce unemployment and poverty. The Aquino administration and Congress must realize that before it is too late.