MANILA (30-Nov-2012) – The third quarter GDP growth was hailed as the fastest in Southeast Asia, but this happened while the Philippines registered the worst unemployment in the region.
According to research group IBON, the 7.1% growth in gross domestic product (GDP) in the third quarter of 2012 happened amid a poor jobs situation in the same period. This highlights that the problem of jobless growth is not being resolved.
The country’s poor jobs situation despite rapid growth is explained by the sources of growth. In the first three quarters of 2012, growth came mainly from the services sector which has relatively weak job creation potential, productivity and earnings compared to manufacturing and a modern agriculture sector. The service sector grew faster at 7.5% in the first nine months of 2012 from 4.8% in the same period last year, particularly due to the wholesale and retail trade subsector. In contrast, manufacturing sector growth was unchanged at 5.3% while the agriculture sector slowed to 1.8% from 4.9% in the same period last year.
Official job estimates in the third quarter of 2012 (July round) showed just a 477,000-increase in total employed to 37.6 million from the same period in 2011, or less than half the target of one million new jobs per year. The official unemployment rate remained virtually unchanged at 7.0%, from 7.1% last year, with 2.8 million unemployed. IBON’s alternative estimate correcting for the change in definition in 2005 shows unemployment at a higher 4.6 million.
However, the number of underemployed drastically increased by 1.5 million to reach 8.5 million in July 2012, with the underemployment rate correspondingly increasing by a large 3.6 percentage points to 22.7 percent. This means that the there were 13.2 million Filipinos, or 33% of the labor force, were jobless or employed but still looking for more work amid the reported rapid growth in the GDP.
The official Philippine unemployment rate of 7.0% (3rd quarter 2012) is also higher than the latest unemployment figures available on Thailand (0.9%), Lao PDR (1.4%), Cambodia (1.7%), Vietnam (2.0%), Singapore (2.0%), Brunei (2.6%), Malaysia (3.0%), Myanmar (4.0%) and Indonesia (6.5%).
Employment is the single most important source of income for Filipinos and a robust domestic manufacturing sector and modern agriculture are the most important job-creating sectors for the country. According to IBON, sustainable job generation and poverty reduction requires economic policies of active and responsible state intervention to build Filipino industry and develop local agriculture.