THE Philippines employment situation may be improved through increased regional and intraregional trade that create a stronger manufacturing sector where many jobs will come from.
“Of course high trade flows will contribute to job creation. In that sense we can see, in the Philippines, manufacturing is important. You need to have a good manufacturing sector. The country needs a better, stronger manufacturing sector,” Asian Development Bank (ADB) deputy chief economist Juzhong Zhuang said.
ADB data showed the country’s merchandise export contracted by 1.4 percent, way below the global average of a growth of 6 percent annually between 2000 and 2009. In 2000, the Philippines’ merchandise exports amounted to $44 billion but in 2009 merchandise exports amounted to only $38.4 billion.
In the same period, ADB data showed the country’s average annual unemployment rate was at 9.48 percent. During this 10 -year period, the highest unemployment rate of the country was recorded in 2004 at 11.8 percent.
Organization for Economic Cooperation and Development (OECD) development division head Michael G. Plummer said increased trade can also occur if the Philippines will liberalize trade by removing nontariff barriers through the services sector which can “make production networks work.”
Plummer said liberalizing trade is not all about tariffs but also foreign ownership, such as those of service suppliers and other regulations affecting trade through the services sector. He added that these changes must all be incorporated into what he called a general reform program and that the Philippines should also prioritize trading within the region.
Plummer said it is good that the Philippines, along with other members of the region, are looking at intraregional from an economic standpoint and not from a political perspective.
“I think there continues to exist non tariff barriers in the Philippines, that can be removed as a priority to help with the liberalization program. I think this also could extend to some of the services. I think people sometimes tend to underestimate the importance of services. During the development process, it becomes more important in terms of employment but also services are necessary to make these production networks work,” Plummer said.
