Headline states that Philippine unemployment eases to 7 percent from a high of 7.5 percent in April and much lower compared to the previous year’s level. Actually, there was nothing to be ecstatic about the slight improvement as it was negligible considering the macroeconomic repercussions of the decrease and the number of unemployed represented by the decrease.
With an estimated number of 3 million people unemployed, only a measly 15,000 were deducted from it, which does not necessarily mean that they have been employed or, if they have, it might either be a state of self-employment or temporary employment, which perhaps as of this writing may have already been terminated or ended. This is reflective of the slowdown in our economic activity as reflected by the decrease in our gross domestic product (GDP) growth to 5.7 percent in the first quarter, which is down from 6.3 percent in the last quarter of 2013. The truth has finally surfaced that private and government spending, which has been driving the economy, is temporary in character and unstable. Both the agriculture and manufacturing industries which make up the heart and soul of the employment sector minimally expanded. The biggest chunk of our labor sector is in these two industries.
The more durable component of growth which is long lasting and is bound to carry us through economic development and the much sought-after tiger status, which is investment spending, has failed to show its real worth. It is quite disappointing that despite the President’s foreign sojourns to promote our country as an investment destination, foreign direct investment has not grown in real terms. The credit rating upgrade from several reputable international credit rating agencies appears insignificant in promoting our country as an alternative investment destination in this part of the world. Otherwise, it would have been an opportune time to take advantage of employment opportunities that could have substantially reduced our local unemployment rate. But as it is, this problem has lingered and is bound to persist for quite some time.
The administrations’ flagship program, the Public-Private Partnership (PPP) scheme which has been in the pipeline for several years now, remains unrealized despite the public’s continuing confidence and trust in the current leadership. It simply proves that mere trust and confidence is not enough to put our country in the limelight or on the map of investment destination priorities. Foreign investors are looking for superstructures that will provide protection and stability for their investments and not economic and political abstractions that in the end is of little significance. Political stability and a better business environment should be the focal point of investment interests in the region.
These and a host of other incidental phenomena should be concretely provided to make the country competitive and eventually achieve the much sought status as a melting pot of investment in the Asean region.
The upcoming ASEAN Economic Community (AEC) brings to the fore our country’s competitive stance in the region, perhaps a prelude to our global competitiveness. In selected areas of competitive advantages, each of the 10 member countries will have the opportunity to show and share their wares, with the end in view of using it for the region’s benefit and for competing with the rest of the world.
As for our local stance, employment opportunities should bring our country at par with the region. Over and above product competitiveness is our desire to keep abreast with the rest of the ASEAN in terms of wealth and economic development, which is the essence of establishing the AEC.
‘Hot money’ on the rise
The increase in the inflow of hot money in the country, more formally known as portfolio investments, was primarily brought about by the relative stability of the local bourse. Net inflow in May hit $545 million, a complete reversal of the $640 million net outflow in the same period last year. This has been brought by optimism in our local stock market where the local barometer on so many occasions has hit record-high levels.
The good thing about hot money, despite its relative instability because of ease in movement, is that it promotes the good reputation that a country is ripe for investment, at least in the area of portfolio investments. Although the local stock market’s performance has been very convincing of late, it should not be an indication that the economy is on its way to a sustained growth because in the long run, if we are to aspire to become an economic tiger, trust and confidence in the political leadership, a boom-and-bust GDP growth cycle, and credit rating upgrades will not be enough.
“Our prayers for the early recovery of my brother German who has been confined at the UST hospital for the past 2 weeks.”
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