PHL economy’s Achilles heel: Jobs at home

EDITORIALS OF THE CONNECTION

Riding on the crest of a surprising set of positive reviews on the Philippine economy, analysts have been giving various inputs on what aspect or aspects of the economy should be addressed. Some suggested the entry of more foreign investments and making the means and costs of doing business here in the Philippines easier and more conducive. Others go for the pummeling of the corrupt and their harrowing practices that suck people’s public resources and their trust to government. For multilateral organizations like the World Bank and the Asian Development Bank, it is buoying the Philippines’ hallow  industrial sector that hasn’t grown substantively for some two decades now.

But as the Philippine government prepares to report its first-quarter gross domestic product performance by this month’s end, some economists think that the crux of the matter is something the country has long struggled and that has led many Filipinos to go overseas: jobs at home.

The country’s unemployment rate is one of Asia’s highest for quite some time (at around seven percent), even before the current global economic crisis gave developed nations higher unemployment rates. But a 2010 paper by two Ateneo de Manila University economists for the National Competitiveness Council gave a stark challenge: for the Philippines to achieve “sustainable employment creation” in the next five years, about 13.6 to 15.2 million (yes, million) quality jobs should be created to lower the unemployment rates of this nation of nearly 95 million to six percent. There have been calculations by some employment analysts that not even the combined number of new homeland jobs created and the new overseas jobs acquired by Filipino workers will reach some 1.5 to two million a year.

That is a very tall order, with no exaggeration needed. Don’t be surprised why job fairs across the nation to mark Labor Day had piles of people in queue. However, in the country’s continued reliance on an economic phenomenon called overseas migration (the most renowned safety valve to homeland joblessness), there’s discontent.

Of some 360,777 job vacancies that 1,706 employers across the country offered during the May job fairs, says a report from the Department of Labor and Employment (DOLE), only 74,352 vacancies (from 1,085 employers) are local jobs, especially from the booming business process outsourcing industry. The rest, 386,425 jobs (from only 621 employers) are overseas. In Rosario, Batangas, for example, Japanese computer hardware giant Epson has been searching for production workers given the opening of a new printer manufacturing plant at the LiMa Technology Center. But with reports, as asserted by militant groups, of unsecure work tenures that previous Epson employees experienced, the young  Batangueño workers shrug off their inexperience and want higher pay outside of the motherland (see story in the “Overseas Filipinos” section).

There have been years of litanies surrounding the issue of jobs: underemployment (or unsecure jobs),  labor’s skills mismatch, an outdated Philippine labor code (enacted in 1974), rising contractualization of workers, the struggles facing the agricultural and industrial sectors that have plummeted the number of jobs generated by these economic sectors, and many more. But that 2010 paper by Fernando Aldaba and Reuel  Hermoso brings to us some broad challenges on how to create “sustainable employment creation”:

  • Attracting both foreign and local investors in the economy, especially by solving key investment constraints, in particular the high cost of doing business;
  • Crafting a “sound industrial policy” (which the Philippines does not currently have) so that what Aldaba and Hermoso refer to as the “moribund manufacturing sector” may be revived;
  • Helping small and medium-sized enterprises flourish;
  • Directing the remittances of  overseas Filipinos and their families to investments and enterprises that generate local jobs; and
  • Improving the capability of the Filipino work force.

Generating employment for this emerging Southeast Asian economy is “the key for poverty alleviation and political stability,” the two economists wrote. While the Labor department, for years, has been making some steps (as especially contained in a five-year national labor and employment plan), this economic indicator will be what ordinary Filipinos and onlookers will watch out for in the coming years.

As President Benigno Aquino III has pushed for jobs at home as a major national priority, this too is a local development agenda item —an electoral one at that.

About Jeremaiah Opiniano

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