Research group IBON warned against overestimating the reported high election-boosted economic growth as a sign of economic success. Economic growth is important but should not be used to divert public attention from fundamental problems of chronic joblessness and poverty, the group said.
The Philippine economy’s reported 6.9% growth in gross domestic product (GDP) in the first quarter is said to be the fastest in Asia, apparently outpacing even other major Asian economies such as China (6.7% growth), Vietnam (5.5%), Indonesia (4.9%) and Malaysia (4.2%). The government hailed this as showing “strong economic fundamentals”.
IBON however pointed out that despite this, the Philippines still has the worst unemployment in Asia. The latest labor force survey (LFS) data has official unemployment in the country at 5.8% in January 2016. The latest available data from slower-growing Asian economies shows lower unemployment rates, for instance: China (4.0%), Vietnam (2.3%), Indonesia (5.5%), Malaysia (3.5%), Thailand (1.0%). According to the group, that slower-growing economies can have lower unemployment rates underscores how growth is a convenient but often misleading indicator of development.
The group reiterated that official unemployment figures do not even capture the true extent of joblessness in the country. A revised definition artificially lowers the unemployment count by some 1.5 million and the unemployment rate by some 3.5 percentage points.
There are also rapidly rising number of underemployed and discouraged worker, IBON noted. The latest January LFS data shows employment increasing from 38.4 million in January 2015 to 39.2 million in January 2016 while the number of unemployed supposedly fell from 2.7 million to 2.4 million in the same period. Yet, the number of underemployed Filipinos, or those working but looking for additional work and income, drastically increased by 847,000 to reach 7.7 million in January 2016 from the same period in the year before. The underemployment rate correspondingly grew to 19.7% in January 2016 from 17.9% last year.
Meanwhile, the labor force participation rate (LFPR), which measures the share of the working age population working or looking for work, has fallen to crisis levels. The 63.4% LFPR in January 2016 is practically as low as the 63.3% rate in January 2009 or right after the 2008 global financial crisis. It is also already the lowest in over 30 years since averaging just 62.9% annually during the 1981-1985 economic crisis in the closing years of the Marcos dictatorship.
IBON also observed that the working age population grew by 1.1 million in January 2016 from the year before but the labor force only grew by a much smaller 487,000. These results are consistent with growing numbers of discouraged workers which in effect lowers unemployment figures. Unemployed workers are dropping out of the labor force or potential new participants are not bothering to join the labor force, or both.
The worsening jobs situation is due to neoliberal economic policies that have stunted Filipino industry and kept local agriculture backward. This structural problem is aggravated by growing labor flexibilization and contractualization. The incoming administration needs to discard these policies for the jobs situation to improve, IBON pointed out