Manila: Poor Filipinos not benefiting from economic growth

The reported drop in the unemployment rate, which President Gloria Macapagal-Arroyo's administration claims as proof of a robustly growing economy, is artificial, as this is partly influenced by people leaving the labour force, the economists said.

They noted that there was an increasing number of Filipinos not interested to work because of a lack of high-quality jobs or because of their dependence on money remitted by family members working abroad.

The National Statistics Office (NSO) earlier reported that the unemployment rate improved to 6.3 per cent in October 2007 from 7.3 per cent a year earlier.

Economist Cielito Habito said the country had a dwindling labour force, noting that the latest unemployment rate translated to 2.2 million jobless Filipinos based on the NSO's new definition of labour force.

Habito, who was the economic planning secretary during the Fidel Ramos presidency, said people not looking for jobs, and those not immediately available for work at the time of the NSO survey, were excluded from the official count of the labour force.

Using the old definition of labour force, which he deemed as more appropriate, Habito said there were 3.5 million unemployed Filipinos as of October.

"There are people who do not work simply because the jobs available here are of low quality. Some just wait for opportunities to work abroad," he said.

He noted that while the industry and services sectors generated more than 500,000 jobs in October, the agriculture sector, on which most poor Filipinos rely, lost 25,000 jobs.

To allow the benefits of high economic growth to trickle down to the masses, Habito said, job creation should be centred on the agriculture sector.

He said the economy also suffered from youth unemployment, noting that 50 per cent of the unemployed were 15 to 24 years old.

At the same forum, economist Leonardo Lanzona said the country's surprising economic growth last year, which beat most forecasts, would not be sustainable if participation in the labour force remained weak.

"Decrease in the labour force participation has led to lower unemployment, but is not necessarily a sign of increased worker welfare," Lanzona said.

He said more people should participate in the labour force and earn income to keep aggregate demand in the economy high.

The economy, measured in terms of the gross domestic product, grew 7.3 per cent in 2007. This was the country's best performance in 31 years, government economic officials say.

The administration attributed the growth to higher government spending and personal consumption, as well as increase in foreign investments.

- By Michelle Remo

Philippine Daily Inquirer

Publication Date: 21-02-2008