THE pandemic leaves in its wake a Philippine economy that is changed in terms of industry winners and job quality, according to a former Socioeconomic Planning Secretary.
In an economic forum of the Management Association of the Philippines (MAP) on Thursday, former National Economic and Development Authority (Neda) Director General Cielito F. Habito said there has been a dramatic shift in job generation in the country as a result of the pandemic.
However, as a result, Habito said this has led to greater informality in terms of the jobs created in the economy. He said this shift in jobs is one of the major changes in the past two years.
“What I wanted to call attention to is the fact that we have indeed a changed economy. [When] comparing your data from October 2019 to October 2021, first let’s look at jobs. There was a dramatic decline in jobs between those two periods in transport and storage, food, and of course in industry, particularly manufacturing and construction,” Habito explained.
“Where did these jobs go? Well, it turns out, the displaced work, the displaced workers in industry, and in services massively shifted to either farming, fishing, or trading,” he added.
Based on a presentation, Habito said between October 2019 and October 2021, agriculture and fisheries gained 650,000 workers. This has made the sector the “biggest single provider of jobs in the economy.”
Further, the data showed some 1.151 million workers became part of the wholesale and retail trade sector. This, however, increased informality in the work force.
This happened as the industry lost 324,000 jobs composed of 288,000 jobs in manufacturing and 70,000 jobs in construction. Habito also said tourism saw a decline of 663,000 jobs, including 524,000 jobs in accommodation and food industries.
“In terms of change in jobs, again, the quality of jobs obviously suffered. Why? because there’s been a 2.8, almost 2.9-million gain in workers who are working less than 40 hours a week, in other words, part time,” Habito said.
“But [there was a] 2.9-million decline in people who are working 40 hours or more per week. So the informal sector work is likely to be the dominant kind of work now,” he added.
With the jobs came the shift in the growth of the economy with agriculture, fishery, and forestry’s (AFF) share to GDP increasing to 9.6 percent from 9.2 percent in 2019. In 2020, Habito noted, the share of the AFF sector reached as high as 10.2 percent.
If it weren’t for the decline in the growth of the livestock sector, which was ravaged by the African swine fever (ASF), Habito said, agriculture growth may have reached 2.4 percent in 2021.
“If you look at agriculture, if you look outside of livestock, which was subject to an unusual disturbance, or this African Swine Fever—it was the pandemic for swine like our own Covid pandemic for humans—agriculture actually showed significant growth,” Habito said.
“I think the Philippines has this inner capability to grow much faster than it has shown in the past years. Agriculture alone, my favorite, because you know I’ve shown how it’s really the backbone, has so great potential, has much scope for further growth if only we would have a much more outward looking orientation in the sector,” he also said.
Invest in people
In order to address the ill effects of these changes, Habito said there’s a need to invest in people first, which means investing in health, nutrition, and education as well as copy the country’s neighbors to strengthen the economy’s backbone which is agriculture and agribusiness.
Habito added the government must also become more aggressive in terms of exporting the country’s products. This will boost income growth and improve the country’s foreign direct investments.
Apart from these, World Bank Philippines Senior economist Rong Qian said efforts to implement structural reforms should become a priority for the Philippines.
Qian said the Philippine economy’s growth over the last 15 to 20 years was mainly productivity-driven growth. But this type of growth usually tapers off without structural reforms.
“The Philippines has been experiencing fast growth for the last 15 to 20 years and a lot of that is productivity growth. As we know from global experience, productivity growth tends to slow down if there are no new reforms. So to go back to 6 percent, we need to implement those structural reforms,” Qian said.
Neda Undersecretary for Planning and Policy Rosemarie G. Edillon said if not for the pandemic, many more reforms would have been implemented by the current administration.
However, some of the notable reforms, such as the e-government and digitalization efforts in the public sector, would pave the way for greater transparency in government. These are the creation of the Anti-Red Tape Authority (ARTA) and the National ID.
In 2020, the President tapped ARTA, along with the Department of the Interior and Local Government, Department of Budget and Management, and other government agencies, to lead the transition to a paperless government through e-governance.
In September 2020, the Authority launched a series of webinars featuring the E-Governance Agency of Moldova, the Embassy of New Zealand, and the Republic of Serbia to showcase their best practices in terms of e-governance.
Earlier, the national government aimed to register 92 million of the country’s population in the National ID system by year-end, according to the Philippine Statistics Authority (PSA).
National Statistician Claire Dennis S. Mapa said this would include some 31.3 million Filipinos who are set to receive their physical IDs by the end of 2022.
As of February 4, Mapa said some 54.956 million Filipinos have already completed Step 1 and 2 of the National ID. Step 1 is the provision of demographic information, while Step 2 is the provision of biometric data.