THE National Statistical Coordination Board (NSCB) and the National Economic and Development Authority (Neda) will announce the third-quarter performance of the Philippine economy on Wednesday, November 29. But don’t expect any surprises there. Romulo Neri, Neda’s secretary-general, is going to say that the Philippines has achieved a higher GDP growth rate—probably 5.8 percent—fueled by OFWs’ remittances, consumption, higher exports and good farm harvests.
It’s the same old story we have been hearing in the last several quarters that will not have any bearing whether or not there would be less jobless people in the streets. We need a fresh story line to convince us that we are gaining real grounds instead of the illusory 5 percent to 6 percent growth-rate band that has yet to curb the rising unemployment numbers.
Lest we are misunderstood, we would like to stress here that we welcome the numbers showing the Philippine economy is indeed moving forward. The 6.5-percent GDP growth rate in the first quarter of the year is nothing to sneeze at. These are good numbers indicating that the Philippine economy may have left behind the era of boom and bust cycles that characterized the Philippine economy following the Edsa Revolution. In fact, there seems to be new growth drivers emerging in our midst including cyberservices, electronics, agribusiness, aquaculture, furniture, high-fashion garments, mining, shipbuilding, tourism, hotels and restaurants. Even the World Bank, traditionally not enthusiastic about the Philippines’ economic prospects, has recently issued a press statement saying the Philippines is on track to achieve 5.5-percent growth rate in 2006 and 5.7 percent in 2007despite the high probability of an external slowdown.
The World Bank here is saying that the Philippine economy has achieved certain resilience. And we have to thank overseas workers for that, as well as the entrepreneurs who persevered despite the continuing political turmoil and deteriorating infrastructure.
While Malacañang was busy putting out political fires, OFWs and business people tried all their best to move on. That’s the source of the country’s economic strength these days.
But we call these encouraging economic numbers “illusory” because they continue to signal several points of vulnerability. For one, we still owe much of these nice economic numbers to God, or sheer luck. In the last several years, the weather has been generally generous to the farm sector. That’s one big reason why the agricultural sector has been able to grow at 4 percent to 5 percent. Exports have been buoyant but this trend owes much to the rising global demand for electronics. New toys and gadgets these days (e.g. smart cars, third- or fourth-generation cellular phones, high-tech consumer durables) need higher and better electronic parts and we are benefiting from these new trends simply because we have lots of electronics and semiconductor firms within our borders, many of which have been here for more than 20 years.
And it’s illusory simply because these numbers have yet to make a dent on joblessness as shown by the latest labor force survey. The National Statistics Office (NSO) says that the country’s labor force grew by 2.6 percent, yet new jobs grew only by 2.3 percent.
Underemployment rose to almost 23.5 percent in July this year from 20.5 percent a year ago. In the second quarter, the Philippine agricultural sector grew by 6.7 percent, yet the labor force survey says the sector has lost 149,000 jobs. Yes, even agriculture is suffering from a “jobless growth”! Is it because of greater mechanization? That is not borne out by statistics either.
If we want to be certain about our growth and development prospects, if we want these numbers to translate to jobs for warm bodies, we need to hear about a real fresh story line. That story line is about investments becoming the major source of economic growth, about the policy measures and initiatives that could spur the Philippine economy toward a 7-percent to 8-percent growth. Experts say that’s the only growth level where we could start feeling that life has gone for the better.
The investment numbers so far—US$1.36 billion in the first eight months of the year—seem to be encouraging but are nowhere near the scale with which we see the massive building up of factories and shops that will hire thousands of people off the streets. And that’s only possible if the government could move faster in upgrading the country’s infrastructure. In pursuit of “fiscal consolidation” the government has totally neglected infrastructure development such that the Philippines now has the lousiest stock of infrastructure in the Asia-Pacific Region. In her last State of the Nation Address, President Arroyo announced a massive infrastructure program to address this matter—but we have yet to see things moving.
Besides infrastructure development, the government—with the help of the private sector—should really do something fast about the deteriorating educational system. We are not only talking about graduates who can speak good English. We are talking about a serious upgrade of our education and training in science and technology. And soon. We are currently experiencing jobless growth and deteriorating underemployment and that’s because economic growth these days is largely technology-driven. If we don’t plug this gap, we could never stop joblessness from deteriorating.
To repeat, we need a new story line. That should be less about remittances propping up consumption, but more about investments in factories and shops that create real jobs and better lives for many Filipinos.