The slower expansion of the country’s economy in the last three years has resulted in the lack of enough decent jobs for new labor entrants, according to research group IBON Foundation Inc.
In its year-end report, titled “Are You High? The Economy Isn’t,” IBON Foundation Executive Director Jose Enrique A. Africa described this as the “worst effect of a backward economy” and claimed that the real score on jobs was “twisted.”
“The economic managers hailed 825,000 new jobs created in 2018 and unemployment falling by 140,000 bringing the unemployment rate down to 5.3 percent. Unfortunately, these do not tell the whole story,” Africa said in a statement.
“The Duterte administration has actually created just an average of 81,000 jobs annually with 43.5 million jobs in 2018 compared to 43.4 million in 2016. This is because the economy lost a huge 663,000 jobs in 2017, which was the biggest contraction in employment in 20 years or since 1997,” he added.
Africa also said the largest part of the “supposed job creation”, or some 4 of out of 5 “new” jobs, was really just restoring jobs lost in 2017.
“It seems that huge numbers of Filipinos are no longer seeking work and dropping out of the labor force. This is reflected in how the labor force participation rate dropped to 60.9 percent in 2018, which is the lowest in 38 years or since 1980,” he said.
The results of the October 2018 Labor Force Survey conducted by the Philippine Statistics Authority indicated that the labor participation rate was at 60.6 percent. The unemployment rate was at 5.1 percent, slightly higher than the 5 percent recorded a year ago.
While employment grew by 162,000 from 2016 to 2018, the number of workers not in the labor force grew by 2.9 million over the same period, according to IBON’s estimates.
“It is likely that the reported 62,000 fall in the number of unemployed between 2016 and 2018 reflects workers dropping out of the labour force because of tight labor markets rather than their finding new work [because of weak job creation].This scenario is supported by IBON’s estimates of the real state of unemployment in the country,” Africa said.
Africa also claimed that the government started underestimating unemployment in 2005 when it adopted a stricter definition that made subsequent estimates incomparable with previous figures.
IBON estimates that the real unemployment rate from 2008 to 2019 is 10.2 percent, using the old definition.
The group said it does not yet have estimates for 2018, but the real number of unemployed in 2017 was 4.6 million, or almost double the official figure of 2.4 million.
IBON also expressed concern over job-generation trends this year, saying that the quarterly labor force survey showed “drastically worsening” job generation since the start of 2018.
“Measured year-on-year, some 2.4 million jobs were reported created in January 2018, but this fell to 625,000 in April, then 488,000 in July, and then 218,000 jobs were actually lost, rather than created, in October,” Africa said.
Trabaho bill
The Federation of Free Workers has also expressed concern over the impact of the Tax Reform for Attracting Better and High-Quality Opportunities, or Trabaho bill, on the creation of more jobs. The FFW said the measure is a “misnomer” as it would result in more job losses.
“[The Trabaho bill] will not necessarily increase employment. Because at the end of the day, this is a tax legislation, not an employment legislation,” FFW Vice President Julius Cainglet told reporters in a recent press conference.
Nonetheless, Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo in his year-end report said he is optimistic that 2019 will be a “great year.”
“The Philippine National Identification System has been signed into law and the start of full rollout is expected next year. A plebiscite for the Bangsamoro Autonomous Region in Muslim Mindanao will be held next year. The Philippines is hosting the 2019 Southeast Asian Games. A new major player in the public telecommunications market has been officially confirmed,” Panelo said.
“With all these at the helm, the Duterte administration will certainly enter the new year with enthusiasm and vigor in serving the people. The outpouring support from the Filipinos will continue to inspire this administration to work harder for the benefit of the greater populace. Together, we shall move forward for a better and more prosperous Philippines.”