15 July 2022 – Unemployment is the entire government’s problem

LABOR MATTERS
By Ruben D. Torres
July 15, 2022

THE planned “rightsizing of the government” proposed by the Department of Budget and Management aims to “reduce the number of government agencies.”

At first glance, this proposal seems to have some merit as it will save the government around 14.8 billion in personnel services, according to the computation of the new budget secretary, Amenah Pangandaman.

However, it could also mean the loss of employment for thousands of government workers.

The Budget secretary should convince not only Congress but also some members of the BBM Cabinet that rightsizing will result in improved efficiency of government service and that cutting government jobs will not exacerbate the country’s unemployment situation.

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The last survey of the Philippine Statistics Authority (May 2022) puts the unemployment rate in the Philippines at 5.7 percent, which means that more than 2.7 million of the labor force are without jobs. Underemployment is estimated to be at 15 percent.

I am not sure whether the Budget secretary is concerned at all about the serious problems of unemployment and underemployment or has even considered the possible adverse impact of her proposal on the employment situation. The jobs lost because of the Covid-19 pandemic have still to be regained.

There will even be an increase in the unemployment numbers since the new graduates will join the labor force. It is estimated that it takes five months or longer before the new entrants find employment.

Secretary Bienvenido Laguesma of the Department of Labor and Employment (DoLE) is on the right track in making job creation one of his immediate priorities. Secretary Laguesma, in an interview, said that President Ferdinand “Bongbong” Marcos Jr. has given him the task to “solve unemployment.”

In less than a month of the new administration, there seems to be a disagreement in the priorities of at least two Cabinet members, namely the Labor secretary and the Budget secretary. Secretary Laguesma wants to generate more jobs while Secretary Pangandaman wants to reduce jobs albeit only in the government service.

The Budget secretary’s principal reason for cutting government jobs is to save around P14.8 billion in personnel expenses. I surmise that she will achieve much bigger savings by focusing instead on the reduction of corruption in government service.

The deputy ombudsman, Cyril Ramos, estimated that the “government lost around P1.4 trillion in just two years,” or P700 billion a year. This is the extent of corruption in the country.

Merely reducing the costs of corruption in the government service by just 3 percent will already result in P21 billion in savings. The Budget secretary has the mandate to ensure efficiency in government service. This is clear, even just in the name of her department which is the DBM. Efficient government service necessarily means prudent and efficient use of government funds, which also implies a less corrupt government service.

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The apparent divergent goals of DoLE and DBM must be reconciled to achieve the overall objective of President Marcos to solve our country’s unemployment problem.

The executive secretary, if I may suggest, should get the DoLE and the DBM secretaries and perhaps the whole economic team of PBBM to forge a united front to solve the unemployment and underemployment problems of the country without sacrificing cost-effectiveness in government service.

For after all, labor matters.

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