SOME sectors of the economy are not reaping the fruits of recent growth in gross domestic product (GDP).
The Philippines grew by 7.8 percent in the first quarter of the year, the highest under President’s Aquino’s term and exceeding economists’ expectations.
But analysts are not yet giving P-Noy the thumbs up.
Alvin Ang, UST economics professor and president of the Philippine Economic Society, said not everybody gained from economic growth, and adding that not all sectors grew at the same time.
“With agriculture that has seasonal employment, for example, workers have the tendency to be idle during non-planting season but can be productive by seeking alternative jobs instead,” Ang said in an interview.
High unemployment
Despite the Philippines’ economic growth being Southeast Asia’s fastest at 6.8 percent in 2012, the country recorded a high 7.5-percent unemployment rate and 19.3 percent underemployment rate in April, data from the National Statistics Office (NSO) showed.
The jobless rate was up from 6.9 percent in April 2012. A total of 3.09 million Filipinos were unemployed in April 2013, up from 2.8 million the previous year, NSO figures showed.
Apparently, job creation cannot keep up with the estimated one million Filipinos entering the job market every year.
By educational attainment, 33.7 percent of the unemployed were high school graduates, 13.1 percent were undergraduates, while 16.9 percent were college graduates.
Karen Valdez, professor at the College of Commerce and Business Administration, said growth won’t have an effect on employment overnight.
Election trend
Aquino, for his part, expressed confidence that his administration could sustain or even surpass the country’s current pace of economic growth.
But IBON Foundation, a non-stock and non-profit research organization, downplayed the President’s optimism.
IBON claimed that economic growth was temporary and unsustainable, adding it would likely slow down soon.
The government should recognize that similar to previous election years, first-quarter growth was largely brought about by election spending.
Elections bring a noticeable uptick in GDP growth during the first and second quarters of the year. The first-quarter GDP growth rate during the 2004 presidential elections was 7.3 percent. It was 6.3 percent in the 2007 mid-term elections and 8.4 percent in the 2010 presidential elections.
But these were short-lived and were followed by slow growth rates.
Valdez likewise said the trend might not continue in the coming months.
“I think our growth for the first quarter was mainly because of the elections so if you are going to observe the trend after it, I do not think it will shoot up to 7.8 percent again,” she said.
Another Commerce professor, George Villasis, said the productivity of the manufacturing and construction sectors, which drove economic growth, would be affected during the latter parts of year because of the rainy season.
Manufacturing should get a boost to sustain economic growth, Villasis said.
“For example in car manufacturing, we just assemble the parts unlike in Malaysia, where they have their own cars,” he said.
Ang said the country should shift away from sectors where there are little gains.
“If all of these years you have worked hard and nothing has come out of it, then your sector is not productive. Find a sector that you can possibly expand,” he said.
Better policies needed
According to an article on the website of the Philippine Institute for Development Studies, a new industrial policy is crucial to help the government determine measures to strengthen industries and the business environment wherein they operate.
Industrial policies are needed to enhance firm productivity, deepen linkages of domestic firms and small and medium enterprises with large domestic and multinational companies, and aggressively court more investments, according to research by PIDS Senior Fellow Rafaelita Aldaba.
Meanwhile, Ronaldo Cabauatan, a professor in the College of Commerce and Business Administration, agreed that government would be able to better cooperate with the private sectors with good industrial policies.
“There are economic zones in Cavite and also Laguna is becoming more industrialized. So when the government focuses in these areas, assuming that many in the private sectors will invest, it will boost the employment,” he said.
Graduate School economics professor Virgilio Tatlonghari said the industrialization policy should have been implemented long ago.
“Our industrial infrastructure is weak. They should devote considerable investment in manufacturing for exports instead of depending on few, mostly agriculture exports,” he said.
