More Filipinos seen to lose jobs amid cut in growth goal

Published by rudy Date posted on April 15, 2009

MORE Filipinos are poised to lose their jobs as the government is set to cut anew its economic growth target for this year, according to pundits.

“Unemployment will worsen definitely because of the lower economic growth,” Benjamin Diokno, an economics professor at the University of the Philippines, told The Manila Times.

A member of the Estrada administration economic team, Diokno expects the unemployment rate to rise to 8 percent to 8.5 percent in April.

The National Economic and Development Authority (NEDA) on Monday said the country’s economic managers are poised to trim again the country’s growth target to between 3.1 percent and 4.1 percent from the current range of 3.7 percent to 4.4 percent.

“Definitely a higher unemployment rate [will accompany slower growth],” Victor Abola, economist at the University of Asia and the Pacific (UA&P), told The Times. “The government intervention may not [be] sufficient to offset the lost employment in the private sector, particularly the export oriented firms.”

He projected an 8-percent to 9-percent unemployment rate this year.

Abola said the government could only create between 400,000 and 500,000 jobs this year, missing by a wide margin its one million annual target.

The UA&P economist said additional jobs would emanate from the government and private construction projects and business process outsourcing sector.

Dennis Arroyo, director of the National Economic and Development Authority’s (NEDA) national planning and policy staff, admitted the economy is not generating enough jobs.

“It not a simple case of higher growth and higher employment,” he told The Times.

Arroyo said NEDA expects job losses to reach 100,000 this year, based on the 87,000 headcount during the financial crisis of more than a decade ago.

At present, 50,380 Filipinos in the country have been laid-off, while 6,405 overseas workers have been displaced.

Tourism fails to sustain growth momentum

In the tourism sector alone, slowing growth has dampened job-generation in the industry, the National Statistical Coordination Board (NSCB) said.

In a statement, Romulo Virola, NSCB secretary-general, said growth in the industry began slowing in the second half of last year, thus failing to sustain the momentum built up since the third quarter of 2006.

He said the tourism industry grew 2 percent in the third quarter of last year, falling behind the 4.6-percent expansion of the overall economy. In the fourth quarter, the sector grew four percent, as against the 4.5-percent expansion in the country’s gross domestic product (GDP).

A proxy for economic output, GDP measures the amount of goods and services produced in a country.

From 2000 to 2007, the average share of tourism to GDP stood at about 6.2 percent.

“The global financial crisis has definitely affected the tourism business,” Virola said.

Employment in tourism industries also dropped to 1.5 percent last year from 3.7 percent in 2007, slower than the 2.6 percent growth of overall employment.

Employment in the tourism sector represents about 9.5 percent of the Philippine total.

Virola said the growth of revenues for hotels/restaurants and recreational services slowed to 0.78 percent and 4.01 percent in the third and fourth quarters last year.

Employment in hotels and restaurants also slowed to 2.6 percent and 1.7 percent to 932,000 and 993,000 in the fourth quarter of 2008 and first quarter of 2009, respectively. This was after job-creation grew 7.2 percent and 7.7 percent in the second and third quarters last year.

Local tourists to stimulate economy

Despite the slowdown, Virola said the domestic tourism holds much promise in stimulating economic activities especially under the current global financial crisis.

“Actually, many of our tourist destination places are visited primarily by domestic tourists,” he said.

In both Boracay and Baguio, the NSCB official said visitors are mainly domestic tourists, adding that more than 9 out of 10 visitors in Baguio, and more than 6 out of 10 in Boracay, are residents.

For three days and two nights, Filipino tourists would only spend between P6,400 and P10,900 to enjoy the fresh air of Baguio, P12,300 to P17,000 to frolick in the white sands of Boracay.

In contrast, tourists would have to endure Bangkok’s heavy traffic at a costlier P20,000 to P29,000 or run the risk of being stampeded by the rush of shoppers in Hong Kong for a princely sum of P26,000 to P35,000.

Virola said balikbayan don’t contribute much to Philippine tourism, comprising less than 1 out of 10 tourists. “They probably do not have the time to visit places and prefer to spend their limited vacation time with their families,” he said.

Despite the decline in foreign visitors last year, he said visitors to Boracay continue to increase.

“Among foreign visitors, Boracay is visited mainly by the Koreans, the Chinese, and the Americans,” he added.

Among Asian, visitors to Boracay come mainly from Singapore. From Europe, Boracay tourists come mainly from the UK and Germany.

In the case of Baguio, its visitors are mainly the Koreans, the Americans, the Japanese, and the Chinese. The Singaporeans, Germans and Britons also top the list of Baguio visitors.

During the G20 Summit in London two weeks ago, Virola said the United Nation’s World Tourism Organization encouraged governments and international financial institutions to use tourism to mitigate the effects of the current global crisis, especially by offering fresh job opportunities. –Darwin G. Amojelar, Senior Reporter, Manila Times

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