Philippine economic growth rate and credit rating upgrade not enough to keep unemployment down

construction_philippinesIf you want to know how the Philippine economy is doing, you will find it hard to get a straightforward answer from the mainstream media. There’s enough spin to counteract every piece of bad news out there to do your head in. It seems the Philippine government is doing its best to project an image that things are coming up roses under the current administration.

President Benigno Simeon “BS” Aquino would like everyone to believe that the country is on its way to Fat City and he wants to take the credit for it. Even if majority of the Filipino people didn’t understand what it all meant, the Fitch Ratings credit upgrade from BB+ to BBB- last April and the reported 7.8 percent first quarter economic growth that the Aquino minions kept bragging about were all music to their ears. But the reality is telling us something else. Only a few could see through the buzz around the Philippines being a “tiger economy” as part of a big public relations stunt that some members of the media are in on. Keep the people and investors happy and BS Aquino won’t have to work a day during his term is probably their motto.

In one recent article, it was reported that the “Overseas Workers Welfare Administration (OWWA) said more overseas Filipino workers (OFWs) are thinking of returning to the Philippines for good due to its strong economy”. This was contradicted by another report saying that due to the shrinking labor market, there is a “looming large-scale return of Filipinos from Saudi Arabia and other Middle Eastern countries because of strict employment policies abroad”, which could affect 120,000 OFWs including an estimated 28,000 undocumented Filipinos Saudi Arabia.

So which news would you rather believe in? Is it the one that says reverse migration is due to strong economy or the one that says it’s because they have no more jobs overseas? I guess that all depends on where you stand or what kind of situation you are in. But it’s hard to imagine the average OFW could receive the same amount of money they are receiving from their employers abroad even if they find an alternative job in the Philippines. Last I heard, the value of the Philippine peso went down against the dollar once again, which simply means that working overseas for some will remain relatively attractive, particularly since their remittances can go a longer way in providing for their family’s basic needs.

As some of us have predicted in the past, the economic growth rate will not mean much to the unemployed Filipinos. In fact, the official unemployment figure in the country has even soared to 7.5 percent. That’s around three million Filipinos! Compare that to last year’s figure of 6.9 percent.

The economic growth was mostly fueled by government and consumer spending, which do not create permanent jobs for people outside of the retail and building industry. Meanwhile, a lot of people who should be working in the manufacturing and agricultural sectors remain idle waiting for dole outs from the government. The stimulus activity is not even sustainable because it relies heavily on OFW remittances and taxpayer funds. Where else would the government get the money to finance its infrastructure upgrades just to keep stimulating the economy? BS Aquino’s plan to spend $17 billion of investments in highways and ports will mostly come from taxpayers. And that’s assuming Filipinos still have jobs that can be taxed and also assuming that the money will be spent wisely.

It’s not like the private sector is rushing in to help fund BS Aquino’s projects. Companies like Ayala Land Inc., DMCI Holdings Inc., and Megaworld Corp. are merely focused on building homes and offices in the cities. Building all these homes and offices might create jobs in the short-term but it could also create a housing bubble. Who can afford to buy them when there are no jobs available? I hope they are not relying solely on OFWs and those who work in business process outsourcing (BPO) firms to enter the property market. It’s not even easy to enter the property market. A recent report says that the Bangko Sentral is considering further curbs on property loans precisely to prevent a housing bubble. I can already picture empty buildings in my head years after their construction is long over. BS Aquino should realize that painting a rosy picture of the economy has its downside. If he keeps telling people that things are looking good, they will assume that they can keep relying on the government for handouts or to take care of them. This could also mean that Filipinos would continue to multiply. If the country’s population keeps growing, any economic growth achieved will not mean much for the additional mouths to feed.

The rise in unemployment is baffling to most Filipinos who bought into the government’s “we’re doing great” script. Even BS Aquino seems baffled since he does tend to believe in his own foolish talk. He insists that the decline in employed persons “was accounted for by agricultural workers especially unpaid family workers”. Okay. He claims that it is due to the agricultural sector, which was affected by the weather but what does he plan to do about it? It’s not like he is focusing on this to address the problems facing the farmers. Year in, year out, the country suffers from the same weather conditions but Filipinos have yet to find a way to harness the energy from the elements and work around the challenges they present. Our Southeast Asian neighbors don’t seem to suffer from the same problems as we do in their agricultural sector considering they also have similar weather patterns. Thailand’s agriculture for instance, is highly competitive. They are a major exporter of rice in the world. The Thai government was said to have embarked on large-scale irrigation projects and introduced higher-yielding varieties of rice in an effort to increase production. When will the Philippines catch up?

It seems Filipino farmers can only wait until weather conditions improve before they can proceed to plant or harvest again. To quote NEDA officer-in-charge (OIC) and deputy director-general Emmanuel Esguerra: “Employment is bound to be adversely affected in times of natural disaster. Thus, it is also imperative for government to design a more effective disaster response system”. Anakbayan national chairman Vencer Crisostomo also agrees that the agricultural sector has been neglected for years:

Anakbayan national chairman Vencer Crisostomo said the record-high unemployment rate was a result of unsound economic policies and not bad weather that affected the agriculture sector as claimed by the government.

“For decades, the agricultural sector has been chronically stunted. Any effects caused by adverse weather conditions merely worsened the situation,” Crisostomo said.

“Instead of modernizing our agricultural sector to achieve food independence and provide a base for developing our local industries, it has been reduced to a mere provider of food products for foreign supermarkets and tables,” Crisostomo said.

The problem with using the agricultural sector as an excuse for the rise in unemployment rate is that, it is also not sustainable. What excuse would BS Aquino use once the weather conditions improve and the farmers go back to work? Unfortunately for him, he can’t always blame his problems on the rain.

After delivering the good news, BS Aquino and his minions will now have to face the music since figures don’t lie. Even the poverty rate remains unchanged since 2006. Now the stock market has suffered a blow. When the price of the Philippine stock market went up just a few weeks ago, I suppose the spin-doctors were not only patting themselves on the back, they must have been giving each other high-fives and doing cartwheels too. Now that it is going down, we read a lot of jargon such as “the market went up to record levels because it was on steroids in the form of liquidity. If the central banks are going to wind down the stimulus activity, you’ll effectively reduce steroids pumped into the system”. Gees…whatever. I say good luck to BS Aquino in trying to explain that one. It still won’t address the unemployment rate.

[Photo courtesy The Baltimore Sun.]

print

Post Author: Ilda

In life, things are not always what they seem.

Leave a Reply

22 Comments on "Philippine economic growth rate and credit rating upgrade not enough to keep unemployment down"

Notify of
avatar
Sort by:   newest | oldest | most voted
libertas
Guest
The propaganda surrounding a largely irrelevant investment upgrade and a stock exchange boosted by hot money sounds more like a pnoy/philippines ponzi scheme – short term gains for the few, but ultimately pain for everyone else when reality bites. It has already started chewing at pnoys ankles. the grinning geek of malacanan had better stop the badly written speeches and corny quips and step up, shape up, or ship out. It also highlights the combination of short term thinking and the lack of a cohesive economic strategy, and the lazy option of a dependence on external factors, foreign investment, foreign… Read more »
Gerry
Guest
when trying to ascertain what EXACTLY it is about the country that seems to halt any and all progress that could come its way, there seems to be only ONE reason, though it is multi-faceted, it is simple: any time there are funds to improve ANYTHING in the country, there is a corrupt hand that reaches out and grabs all there is to grab (evidence the new ‘fees’ placed on 1st time exit visa’s ). AND SO, absolutely no progress what-so-ever is made anywhere in the country.it is like watching a dog chase its tail. the corruption never stops and… Read more »
Gerry
Guest

and just in case ANYONE thinks that by changing government personnel(congressmen/senators/executives/judiciary)…NHT!!! they are collectively stuffing as much as they can in their sleazy pockets while collectively laughing at the people.(did the ‘oldman’ give any of the ‘christmas’ peso’s back? NO? oh, did not think so!)
not one single thing has changed, except personnel(and this should tell everyone what needs to be done,EVERYONE!), since 1986. NOT ONE SINGLE THING!
its only going to get worse, UNLESS…

MidwayHaven
Guest

…a pandemic strikes?

Gerry
Guest
Well, NO. BUT SIR,it is now VERY OBVIOUS that every time someone says “Vote for me, the one who will change things..”. NOT A SINGLE THING CHANGES.and that song has been sung for at least 50 years. AND LOOK, it just keeps getting worse! Since the “Concert for BANGLADESH” in 1971, the Philippines is spiraling towards becoming worse off than that HELL-HOLE! So, realizing that AND the fact that the elections are a farce/sham and that NOTHING is going to be changed by the people elected to change the way things are in the country…. I MEAN DO I REALLY… Read more »
begalon
Guest
I think I am willing to swim upstream and it is going to be worthwhile. When GDP continues its current performance in a positive uptick, we will not be able to see or benefit from it in one year, two years, or even three years. Sorry folks, but that is how national economy works. Take the economy like eight cylinders engine, all of those cylinders must be firing properly in order to attain high and effecient performance. Currenly our economy is probably firing on one or two cylinders as in financial infrastructures and real estate property. Unfortunately, other industries such… Read more »
libertas
Guest
Globalisation affords opportunities, but it also increases competition between nations as the dynamics of the world order change, and a country’s position and prosperity will, and always has been, determined by a hunger to succeed as the primary driver, and a thirst for knowledge as the most valuable component of human capital. For a variety of reasons, and not just economic, those two factors are not prevalent in the philippines DNA, either nationally nor individually. Consequently the country, on its present track, can only hope to be a low cost producer of goods and/or labour with the attendant risks and… Read more »
benign0
Admin

In short, the benefits of globalisation are premised on the assumption that participants in said globalisation possess a strong commitment to compete and compete seriously. You don’t walk into a den of tigers if you feel you do not have what it takes to go head-to-head with tigers.

Felipe
Guest

Pasabog lang talaga ng mga alipores ni abNoy na umaasenso ang ekonomiya ng pinas. Sa propaganda lang magaling sila abNoy. They’re all about smoke and mirrors. All form and no substance, all just to keep their jobs at the expense of the rest of the country.

Johnny Derp
Guest

Little do they know that when reality kicks them in the face and everything that they say are proven otherwise, their web of lies that they spun will be destroyed and will expose them as frauds to the general public. No amount of propaganda can save this sham of a government when that happens.

The fall of the aquino government is nearing

libertas
Guest
For multinationals and major corporations, organisation structures are increasingly becoming either ‘atomised’ as they insource functions to be self determining profit centres, ‘virtual’ as they outsource non-strategic functions, or ‘networked’ as they combine specialisations with key partners. These trends and principles which started in earnest in the 1980’s continue to gather pace particularly as sme’s also start to adopt similar models and practices. Utilising low cost country suppliers (lccs) is not the only driver, as companies seek to move up the value chain, leverage advantage through intellectual property, and most critically seek out innovative solutions and creative ideas which can… Read more »
trackback

[…] the government is continuously criticized for not having been able to balance economic growth and good credit standing with a healthy […]

trackback

[…] But one must understand OFWism, while a problem in itself, is also the symptom of even bigger underlying problems. Saying the OFW is greedy or evil is bigotry and prejudice. It reflects a stubborn “I’m right, […]

1111Hyden007Toro9999.999
Guest
1111Hyden007Toro9999.999

Try to contribute in the blog …. speak up and give your views !

wpDiscuz