Research group IBON said that the economy may have had fast growth in third quarter 2017, but this was exclusionary considering that there were significant job losses during the same period. The group said that as long as economic growth remains dependent on external and unsustainable factors, this would not translate into the stable, decent jobs and genuine development that the country needs.
The Philippine Statistics Authority (PSA) recently released the third quarter performance of the country’s economy. It cited a 6.9% economic growth, which may be the second fastest in the region after Vietnam ‘s 7.1% growth, and faster than China’s 6.8 percent. This was attributed to increases in exports and government spending, which in turn propelled growth in manufacturing (9.4%) and services (7.1%). The industry sector grew by 7.5%, while agriculture only grew by 2.5 percent.
According to IBON, such fast growth is not being felt by many Filipinos, especially the poor, in terms of addressing the country’s job crisis. The group said that latest labor force survey data from July 2017 showed total job losses at 784,000. By sector, agriculture was hit particularly hard with an estimated 1 million job losses, followed by services at 189,000. The industry sector only slightly compensated with an added 434,000 jobs.
The notable drop in agriculture employment could be due to the generally low and irregular growth of the agriculture sector, said the group. Though it registered a welcome 6.3% growth in the previous quarter, this fell to 2.5% in the third quarter, and was slightly lower than the 3.0% growth in the same quarter last year. If there are no major efforts to protect and develop the sector, said IBON, agriculture will remain backward and overly dependent on weather conditions. Rural livelihoods will remain unstable and continue to decline.
IBON also noted that the Philippine economy has relied on external and transitory factors such as overseas remittances and BPO investments, both of which are showing signs of slowing down. Remittance growth has been sliding from its recent peak of 8.2% in 2010 to 5.0% in 2016, and was only 3.8% as of the end of September 2017. According to Philippine Economic Zone Authority (PEZA) data, PEZA-registered Information Technology-Business Process Management (IT-BPM) investments dropped by 35% from Php10.9 billion in January-May 2016 to Php7.1 billion for the same period this year.
The fall of remittances and BPO investments is reflected in the decrease of household consumption from 7.2% in the third quarter of 2016 to 4.5% the same period this year. According to IBON, this could mean that as remittances decline and service sector jobs contract due to lack of investments, Filipino families will spend less.
In the long-term, real development of domestic industries, especially agriculture, is needed to relieve the worsening jobs crisis and poverty in the country, said IBON. Instead of advancing neoliberal policies that make doing business in the Philippines easy and very profitable for big local and foreign corporations, the Duterte administration should build, strengthen and protect the domestic economy. It can start by concentrating much-needed financial and material support to local agricultural and industrial development.