Alarming unemployment makes economic growth illusory

In the next few weeks, more than half a million more Filipinos will be looking for jobs that will hopefully pay back for their years of sweat of having to go through school and for their parents’ hard-earned money spent on tuition fees and living expenses.

Predictably, many will find that job hunting can be more exasperating than preparing for their final exams or even getting the licensure permits. And they will learn the harsh reality that a diploma and graduation will not automatically open doors to the real world.

Ironically, this problem has been omnipresent in Philippine society for decades. It had been largely ignored by our government bureaucrats in the past maybe because of other more pressing national problems and the resilience of the migrant job market.

But lately, the unemployment rate has been showing an alarming increase, and even in absolute numbers, should be enough cause for concern by our government economists, especially since domestic economic growth has been growing apparently at impressive rates in the last few years.

Jobs not being created

Clearly, something is very wrong. Our impressive economic growth is just not being translated to more jobs.

Since 1999, the Philippines has consistently exhibited positive growth rates, reaching up to as high as 7.6 percent in 2010. In the last two years alone, the GDP growth rate had been substantial at 6.8 percent in 2012 and 7.2 percent in 2013.

During the first two quarters of 2013, the Philippines’ GDP growth rate was the highest in Asia, second only to China and Indonesia. Consequently, the Philippines’ in the world economic stage had been acknowledged as a country experiencing robust economic growth.

And yet, government statistics have shown that in January of 2014, the jobless rate rose to 7.5 percent from 6.5 percent in the previous period, and 7.1 percent a year ago. This translates to almost three million unemployed, from 2.8 million in January 2013.

In simple planning parlance, this phenomenon simply says that our economic growth is coming from sectors that are not compatible to answering the needs of the number of college students who graduate every year, and which will continue to swell if the population growth is not subdued.

Growth drivers not sustainable

Our growth drivers today, and unfortunately in the next few years, are coming from such sectors as retail consumer spending and real estate construction, both of which are not true solid indicators of sustainable growth and poverty alleviation.

The strong retail spending is a result of the continuing increase in remittances of Filipinos employed in jobs abroad, and is apparent in the rise of malls even in the suburbs of provincial cities.

Real estate, on the other hand, is also very much spurred by the earnings of overseas Filipinos who have decided to invest in any of the new high-rise condominium projects for their eventual retirement or by the new middle-income families that depend on the earnings from jobs abroad.

Absence of inclusive growth

Once again, and for the nth time, the call is for a national plan that will pave the way for sustainable growth. At the moment, the plan that is shaping up is to boost industrial growth by encouraging business sectors to plan their own roadmaps.

This directive is much like a ship without a captain, where the government, through the Department of Trade and Industry, has raised a call for industries to submit their respective plans on how to energize their ranks to be able to generate jobs and contribute to the national economy.

As expected, the progress on this side has been slow, and participation by different industry groups has been more obligatory than enthusiastic. The electronics and BPO sectors, for example, have had their roadmaps for years, but there has been little help coming from government to move forward and reach the goals.

Prioritizing growth

What our national leadership should do is to immediately and urgently identify which sectors are to be prioritized and to focus all possible resources to making things happen. There are a number of candidates, but these have to be anointed and supported.

If the government thinks that inclusive growth from promoting tourism will provide the best returns for the country, then let’s do it. For the next few years, all possible resources that can be spared must go to building up our tourism industry and its ancillaries.

Other potential industries, which our planning managers can well validate, are agriculture, agri-based manufacturing, mining, vehicle manufacturing, business processing, education, gaming, and medical services.

Only when there is a well-laid out plan that has the support of all concerned stakeholders can we expect things to move forward. This means that incentives, infrastructure support, manpower staffing and budgetary appropriations will be aligned to execute the plan.

Synchronized education system

This also means that our Education department and the whole education system will be aligned to supporting the government’s designated priority plan.

We may not be able to immediately solve the unemployment problem, but the country stands a better chance of lessening the number of graduates who will encounter problems finding a job that is suitable to the course that they studied.

In the meantime, our jobless graduates’ hope is to search for job opportunities abroad when there are none available in the country. This is why the quality of our graduates becomes important.

To the many universities and schools that accept students for college or vocational degrees, the challenge is to improve their standards to enable their graduates to qualify for job opportunities wherever these arise, either here or abroad. –Rey Gamboa (The Philippine Star)