The National Economic and Development Authority’s Philippine Development Plan (PDP) 2017-2022 declares that one of the major goals of the Duterte Administration is social inclusion, a favorite term nowadays among development agencies such as the Asian Development Bank, World Bank and various UN agencies. Filipino politicians, past and present, have translated this into a populist slogan – walang maiiwan! No one shall be left behind.
For development planners, the task is quite clear: formulate inclusion programs. The bolder, the better. In this regard, PDP 2017-2022 has identified the skills and education sector as one area where inclusion programs can be enhanced. For example, in basic education, there is a proposed program to identify more rigorously the excluded such as the isolated indigenous people (IP) and strengthen government assistance so that IP children can be enrolled in the school system. For out-of-school youth and adults who have limited education, there is the expanded alternative learning system or ALS that seeks to cover millions. TESDA is also mandated to provide more technical education courses in underdeveloped regions like the Caraga and Region IX in Mindanao.
However, preparing the excluded labor force skills-and-education-wise for the emerging jobs in a supposedly expanding economy is neither easy nor smooth. In the first place, the economy and the labor market are segmented, as pointed out in earlier articles.
One problem in the PDP 2017-2022 is that its macro-economic and industry-agriculture chapters still tend to push for job creation strategies based mainly on the requirements of the Philippine integration in the global economy like participation in the value chains of giant transnational corporations, for example, the automotive industry. Yes, why not participate in these chains and extract maximum gains, jobs and value-added, from these chains? But what happens to the other segments of the economy which are not able to align with the requirements of the global market, like the domestic industry, the domestic agriculture, the huge informal sector and others?
Why should economic growth modeling be based only on the requirements of global integration?
This reminds us of the 1994 Senate debate on whether the Philippines should join the World Trade Organization or not. To close the debate to their favor, the economic cluster of the government came up with overly optimistic projections that membership never delivered – half a million new jobs annually for each of the two major sectors of the economy – industry and agriculture. Both sectors have weakened instead in the last two decades. Completely ignored by the economic technocrats were the readiness of some segments in the industrial and agricultural sectors such as the domestic producers, like the shoe industry and onion and garlic industry, which collapsed in the ensuing liberalization of the sectors.
Nonetheless, the economy today is growing. But mainly due to two non-WTO arguments that were not raised in the 1994 debate: the continuing expansion of OFW remittances and the unanticipated growth of the call center-BPO sector.
It will not do NEDA, therefore, any harm if it will review and modify PDP 2017-2022 on the basis of more consultations with vulnerable sectors. It should address more rigorously what economic technocrats failed to do in the 1990s – the identification not only of the potential winners but also of losers in the GVC system, Asean integration and soon-to-be Regional Comprehensive Economic Partnership or RCEP in the bigger East Asia region.
Who are the vulnerables or excluded under globalization? These include the following:
First, the non-tradables. These are sectors of society which have limited possibilities to participate in an open and globalized economy. These include the self-subsistence farmers and fisherfolks as well as tribal communities still practicing communal farming. A number of these communities even become victims of “development aggression” by aggressive resort developers, land speculators, mining prospectors and big fishing companies.
Second, the unprepared. Globalization is war, trade war. We have seen how Donald Trump threw tantrums over America’s trade deficits with Mexico and China and how unilaterally he is changing the rules of trade engagement. Like in any battle or war, the winners are usually those with the right weapons (saleable products and technology, etc.), right people (with skills and global reach), right supporting institutions (providing an enabling environment such as affordable power and credit) and the right strategy and tactics (look how China pursued for a long time its two-tiered currency program and how it is pursuing its present upward industrial restructuring program). Look at how messy is the situation now for Philippine sugar and rice, after the end of the Asean QR arrangements, and how players are talking once more about problems of smuggling in the two commodities. There may be hundreds of home-grown small and medium Philippine enterprises and industries which may be hit by the RCEP tsunami competition. What are the preparations for them? Do they even know that there is such a thing as RCEP?
Third, the replaceables. Industries with products that can be replaced with new materials can be profitable today but insolvent tomorrow. So what are the industries today that are likely to be hit by changes in production materials and processes? For example, how long can electronics assembly and low-end customer service in the call center/BPO sector last given the rapid advances in the use of automation, robotics and DIY applications by industry of developed countries? Of course, for the trade unions, the biggest problem is the ability of big capital to hop in and out of global and Asian labor markets, for this makes jobs unstable and non-regular.
Clearly, there is a lot still to be done to make PDP 2017-2022 a reliable strategic tool to meet the goal of social inclusion, not to mention the other lofty goals outlined in Ambisyon 2040.