According to research group IBON, the Philippine labor market has collapsed. Rappler concurs. Forbes agrees. But what’s the economic reality?
IN mid-January, the IBON research group, presumably basing its findings on data from the Philippine Statistics Authority (PSA), warned that the Philippine economy was slowing and that, in its first two full years, the Duterte administration registered the “lowest level of job creation among post-Marcos administrations.”
In the 2000s, annual job generation had been 800,000 to 850,000. In the Duterte era, it had plunged to barely 81,000, or so the story went.
Two weeks later, Rappler released J.C. Punongbayan’s jobs commentary, which relied almost entirely on the IBON piece, however. He exclaimed that “the previous Aquino administration created jobs at an annual rate more than 10 times faster than Duterte government’s current performance.”
A week after the Rappler jobs piece, US-based business magazine Forbes published its take, “Can the Philippines survive Rodrigo Duterte?”
Like Rappler’s Punongbayan, Forbes contributor William Pesek relied entirely on the IBON report. He attributed the collapse of the Philippine labor market to increasing corruption, deadly drugs war and, oddly enough, a Duterte-Marcos conspiracy. The conclusion was dire: “Dutertenomics is sputtering.”
So, how are these systematic comparisons possible across three decades? Well, strictly speaking, they aren’t. The PSA released its first nationwide labor turnover survey only last fall. The rate seems to have decreased from 1.9 percent to 0.9 percent between the first and third quarter. Yet, inadequate data does not allow for extrapolation across years and decades.
But has Philippine labor market collapsed, really?
Rising employment, declining unemployment
Last fall, the International Monetary Fund (IMF) reported that investment-led growth and sustained supply pressures in the Philippines have likely raised employment with renewed wage demand pressures.
Indeed, there is a significant difference between the Aquino and Duterte eras in the Philippine labor market. During the Aquino administration, employment rate—the number of people who have jobs as a percentage of the labor force—stayed around 92 percent to 94 percent. In the Duterte era, it has progressively increased from 93.5 percent to 95 percent. Conversely, in the Aquino era, the unemployment rate varied around 8 percent to 6.5 percent, whereas in the Duterte era it has declined to 5 percent.
In the Philippines, such percentage points represent millions of people and can thus make or break the future of Filipino families.
In the Aquino era, the number of employed Filipinos increased from 36 million to about 40 million. Yet, the number of unemployed stayed at around 2.5 to 3 million. In the Duterte era, the number of the employed has climbed to close to 42 million, whereas the number of the unemployed has fallen to 2 million to 2.2 million.
Here’s the bottom line based on existing longer-term indicators: the Aquino administration spoke eloquently about reducing unemployment and attracting foreign investment, yet failed in both efforts.
Another manufactured friction
In each of the three articles—IBON, Rappler and Forbes—the myth of the collapsed Philippine labor market is attributed to the Duterte administration, while the Aquino administration is portrayed as “10 times better,” even though it employed fewer and had more unemployed.
Unlike the Aquino administration, the Duterte government has succeeded in creating a momentum for investment-led growth for years to come. So, why do manufactured frictions continue to spill from questionable research to biased commentaries to international denunciations?
In 2016 election, Duterte won the presidency by a landslide, whereas the Liberal Party (LP) suffered a meltdown. In most countries, electoral losses encourage the opposition to examine what went wrong and what can be done about the future. However, that was not the case in the Philippines.
Instead of adjusting to new realities at home, some of the party’s leaders seek to revive LP extraterritorially—hence the effort to exploit foreign governments, agencies and lobbies, billionaire speculators, international NGOs and media.
It is a very polarizing path in an era when the world economy hovers at the edge of a Cold War. It does not bode well for the future of the LP. It has diminished the country’s international reputation. And it certainly does not contribute to job creation at home.
Dr. Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup.net/