WHILE there has been an improvement in the employment situation in the country based on the latest data, the National Economic and Development Authority (Neda) said more needs to be done to improve the quality of jobs in the Philippines to reduce poverty.
In a Post-Sona Briefing on Wednesday, Socioeconomic Planning Secretary Arsenio M. Balisacan said the unemployment number has declined to 4.3 percent, the kind of jobless rate found in developed countries.
However, Balisacan recognized that attaining a low jobless rate is different from creating decent jobs. These jobs, he said, would allow the Philippines to bring down the poverty rate to 9 percent by 2028.
“The number of jobs is one thing but the quality of those jobs is another,” Balisacan said. “That’s [what] my colleagues here are [working on]—improving the quality of jobs available, improving the employability of our workers, enhancing the human capital of our people so that the labor market can work effectively, efficiently.”
Balisacan said by improving the work force, the government can also attract investments that will allow the establishment of factories and new age businesses—those into Artificial Intelligence—that will ensure the sustainability of the growth of the economy not only today but in the years to come.
By building factories and plants that create new equipment as well as investments in roads and bridges, more businesses will come to the Philippines and provide quality jobs to Filipinos.
“We are in a hurry because as we keep on saying, many of our neighbors have left us long ago but now we have the opportunity. As we kept saying the stars are aligned. And if we miss this time, I don’t know when we’re going [to achieve it],” Balisacan said.
No reason to celebrate
Oxford Economics in its latest brief said the low unemployment numbers in the Philippines and Thailand is not enough reason to celebrate.
Employment opportunities in the Philippines remain informal, with own-account workers and unpaid workers increasing to 38 percent in the first quarter of this year from 34 percent in the first quarter of 2019.
Oxford Economics added that the number of unpaid workers in the Philippines doubled within the same period, standing at 8.1 percent of total employed persons in the first quarter of this year.
These own-account and unpaid workers are unstable sources of income and would usually have irregular hours. Some examples of these jobs are hawkers, private hire car drivers, real estate agents, to start-up owners.
“Thailand and the Philippines, unlike their subregional peers, have registered higher employment growth than their prepandemic trends. But we think this offers little reason to cheer, as this growth masks the increased underlying precarity in the labor market,” Oxford Economics said.
Nonetheless, Balisacan said the Philippines has “no reason” to fail in its bid to create decent jobs this time around because the government is led by a popular president and the administration has a clear development program.
Balisacan added that there is a collaboration between the government, the private sector and the academe that makes the whole-of-society approach in development possible in the country.
If these are achieved, Balisacan said the government can reduce poverty to 9 percent by 2028. This means that by 2028, when the population may reach 120 million, over 10 million Filipinos will be lifted from poverty.
However, Balisacan admitted that inflation remains a concern. This is particularly because inflation can reduce incomes and prevent poor households from improving their lives.
It may be noted that poor Filipinos are sensitive to expensive food items. Based on the Consumer Price Index (CPI), food has a weight of 51.38 percent of the CPI for the Bottom 30 percent of the population.
This is significantly higher than the 34.78 percent weight of food in the CPI for all households. This only shows that because of their low incomes, poor Filipinos spend more of what little they have on food.
“I’m still expecting a reduction, but because of elevated inflation, the effects of economic growth [on poverty] might have been dampened a bit by the inflation. Usually, when inflation is low and economic growth is high, the rate of poverty decreasing is faster,” Balisacan explained, partly in Filipino.
“This time, 2023, and the latter half of 2022, inflation was rising and the pandemic also made inflation and prices elevated. That’s what’s dampening [the impact of] economic recovery on poverty,” he added.
The Bangko Sentral ng Pilipinas (BSP) earlier said inflation would continue to slow to 2.9 percent next year, which is within the target range of 2 percent to 4 percent. Inflation has already eased to 5.4 percent in June 2023.
Neda reiterated that rapid, sustained, and inclusive economic growth is key to achieving the Marcos Administration’s single-digit poverty incidence target by 2028. The government targets a gross domestic product (GDP) growth rate of 6.0-7.0 percent in 2023, and aims for a faster expansion of 6.5-8.0 percent from 2024 to 2028.
However, while GDP growth performance of 7.6 percent in 2022 and the 6.4 percent recorded in the first quarter of 2023 mark a return to the country’s high-growth norm, Balisacan cited the need to ensure that such growth is sustained and inclusive.