Fudging figures in the Philippines By Joel D Adriano
MANILA - The Philippine Labor Department has said that unemployment concerns
are easing and that the government is now more vigorously tracking job gains
rather than losses. This despite the fact the Philippine economy has slowed
amid the global economic crisis, with export, foreign investment and corporate
profit statistics all down.
The Labor Department reported broadly that only 121,000 workers lost their
jobs, suffered pay cuts or had their working hours reduced between October last
year to mid-March this year. Officials have presented those numbers as positive
news, considering they had earlier projected between 180,000 to 300,000 workers
would lose their jobs by the end of the first quarter.
The electronics and semiconductor sectors, which account for
nearly half of the country's export revenues, were expected to hemorrhage the
most jobs. Some argue the government is obscuring the hard unemployment reality
by dispensing vague measures. An April 2007 labor survey showed the
manufacturing sector had lost 105,000 jobs from the same month the previous
year, as global orders for computers and electronics started to collapse.
Buoyed by the better-than-projected official statistics, President Gloria
Macapagal-Arroyo has now predicted that unemployment will not breach the
double-digit threshold this year. Recent government figures show that the
unemployment rate hit 7.7% in January, equivalent to around 2.9 million jobless
workers, and up from the 6.8% recorded in October of last year.
The official optimism comes despite growing private economist concerns of an
inrush home of overseas foreign workers (OFWs) who have lost their jobs amid
the global recession. The government predicts gross domestic product (GDP)
growth will slow to between 3.1%-4.1% this year, down from last year's 4.6% and
well off the 7.3% recorded in 2007. The International Monetary Fund is much
more pessimistic, predicting Philippine growth will be flat this year, down
from its previous 2.25% prediction.
Critics say the government's official measures purposefully understate what is
a mounting economic problem and potentially volatile political one. That's
particularly true of unemployment statistics due to Arroyo's controversial
decision to change the official definition over four years ago when
unemployment was hovering near double digits.
The old definition of "those not working and at the same time looking for work"
was changed in favor of a vague "availability of work" concept, which excluded
frustrated jobseekers or those who had given up hope of finding employment
after searching unsuccessfully for a certain time period. The new definition
also added unpaid family labor to the number of employed as part of the
distortion, said Elmer Labog of the activist labor group Kilusang Mayo Uno.
According to the Social Weather Station (SWS), a private survey research firm,
if the old definition were still applied, the actual unemployment rate could be
as high as one-third of the total labor force. The SWS estimated that the real
unemployment rate was 27.9%, representing over 10 million jobless Filipinos.
The Ibon Foundation think-tank put the end-of-year figure at 4.1 million
unemployed Filipinos, which was still almost 50% higher than the official rate.
Both those higher figures correspond with anecdotal evidence of mounting job
losses in depressed urban areas and the rural countryside, where the majority
of Filipino workers still live.
Even with the government's more optimistic figures, the Philippines'
unemployment rate is the second-highest among core Association of Southeast
Asian Nation member countries, trailing only Indonesia's 8.4%. The end of year
unemployment rates in Thailand, Singapore and Malaysia were 1.4%, 2.6% and 3.3%
respectively.
The Philippines is also known to have a stubbornly high underemployment rate.
According to a recent World Bank study, more than 60% of Filipino workers are
employed in low-paid agriculture, fishing, domestic and service work sectors,
many of whom are family laborers or non-wage earners.
The industrial sector, where job losses are mounting as foreign investors
shutter their Philippine operations, accounts for just 15% of the work force
and most laborers work on a contractual basis, offering little job security or
social safety net benefits, according to the World Bank. The lack of job
security, some say, explains why mounting job losses have so far not resulted
in more social unrest - although government concerns of unrest could explain
its alleged understatement of unemployment figures.
Stop-gap measures
Arroyo's government has reacted to the economic slowdown by intensifying
official efforts to place more Filipino workers overseas, despite the
diminishing opportunities amid the rising global economic crisis. With the US
and much of Europe in recession, the government is hoping to land more jobs in
the Middle East. In that direction, Arroyo is also looking into lifting her
government's five-year-old ban on sending workers to Iraq.
The Philippines is already a top global source of skilled and unskilled migrant
workers, with estimates as high as 12 million, including undocumented Filipino
workers employed in over 200 foreign countries. That represents nearly 15% of
the total Philippine population and their foreign currency-denominated
remittances have been crucial to keeping the local economy afloat.
Overseas workers sent home some US$16.4 billion last year, representing nearly
one-fifth of GDP and a crucial driver of domestic consumption. Foreign
remittances slipped slightly from 1.4 billion pesos in December to 1.26 billion
in January, according to most recent official statistics. The World Bank has
conservatively predicted a 4% decline in remittances this year, in line with
expected migrant job losses overseas.
Administration officials contend they have taken big steps to boost local
employment and economic activity, including measures in a $2 billion fiscal
stimulus package. That included a $2 million earmark for the temporary hiring
of 180,000 workers, though the program is scheduled to wind down later this
year. Arroyo has also called on local governments to set aside 1.5% of their
budgets to create jobs.
Critics argue that many of those schemes have been poorly planned, including
instructions from the Department of Trade and Industry to one local government
to hire people in its municipality to gather scrub plants and convert them into
useful products without indicating how to structure or market the grassroots
enterprises.
"The government is missing on a great deal of opportunity to come up with
something and make the best of the crisis," said one local official who
declined to be named. "Instead, funds are wasted on activities and job
placements that are hardly productive and are simply meant to justify their
salaries."
Economists note that ramped up spending is putting extraordinary pressures on
the national budget and bond yields. The government turned in a $1 billion
deficit in March, its largest-ever one-month shortfall. The overall first
quarter deficit was nearly $2.4 billion, a full $2 million over target, and has
raised concerns the government will need international capital markets to
finance the shortfall. The government raised $1.5 billion in a sovereign bond
issue in January.
Socioeconomic Planning Secretary Ralph Recto has predicted that the country's
budget deficit could reach $5.3 billion if tax collections fell short of target
and the government failed to raise revenues through asset sales. Privatization
proceeds last year, including from the sale of the government's remaining 40%
share in oil giant Petron Corp, helped raise non-tax revenue by 35%.
This year, officials hope to raise some $1 billion from the sale of government
shares in power distribution firm Meralco to the local San Miguel Corp, the
biggest food conglomerate in Southeast Asia. The company's chairman, Eduardo
"Danding" Cojuangco, has pledged to help with the government's job-generation
drive by hiring more local workers. But it's not clear to most that will have
any meaningful impact on the Philippines' rising and largely understated
unemployment problem.
Joel D Adriano is an independent consultant and award-winning freelance
journalist. He was a sub-editor for the business section of The Manila Times
and writes for ASEAN BizTimes, Safe Democracy and People's Tonight.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please
contact us about
sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road,
Hua Hin, Prachuab Kirikhan, Thailand 77110
