Crisis costst housands of Filipinos jobs

Nearly a million Filipinos lost their jobs from October-December 2008 to January-March 2009 despite the global crisis having had “little impact” on Philippine economic growth and employment, the Asian Development Bank (ADB) reported.

In its report “How Has Asia Fared in the Global Crisis? A Tale of Three Countries: Republic of Korea, Philippines and Thailand,” the Manila-based lender noted that the Philippines lost an estimated 950,000 jobs from the fourth quarter of 2008 to the first quarter of 2009 because of the crisis.

The ADB said, however, that in the Philippines, the crisis had relatively “little impact” on economic growth and employment compared to the Republic of Korea (South Korea) and Thailand.

In South Korea, an estimated 1.63 million jobs were lost from the second half of 2008 to the first half of 2009 and about 1.04 million jobs for Thailand during the same period.

“The Philippines’ minimal exposure to global financial markets, weak export growth and heavy dependence on remittances [from overseas Filipino workers] all contributed to shielding the economy from the immediate impact of the crisis,” the ADB said.

Because of the crisis, the bank added, employment in the Philippines fell by 2.83 percent in the second quarter of 2008 compared to the trend from 2001 to 2007.

Before the crisis or during 2001 to 2007, the ADB said that the annual rate of employment growth in the Philippines was 2.35 percent.

The number of wage earners in the country increased by 3.28 percent, the number of own-account workers by 1.60 percent and the number of unpaid family workers by 0.87 percent.

Labor market performance

“While strong employment growth in the Philippines is indeed a positive development, the labor market performance of the country cannot be assessed solely on the basis of the number of jobs created. The quality of jobs, such as working conditions, wages and benefits, is also important,” the ADB reported.

The labor force increased at an annual rate of 1.51 percent in the Philippines and Thailand from 2001 to 2007.

In terms of economic growth, the impact of the crisis on the Philippines was rather “small” although it has become significant since the first quarter of 2009.

The ADB said that the impact of the crisis on real per capita gross domestic product (GDP) for the Philippines was 5.16 percent in the second quarter of 2009.

GDP is the total value of goods and services produced in a country in a year.

For Thailand, the impact was 28.42 percent in the second quarter and 32.69 percent in the first quarter.

In South Korea, the impact was 6.25 percent in the second quarter and 7.76 percent in the first quarter.

From 2001 to 2007, or before the onset of the global crisis, annual growth was robust for South Korea (4.49 percent), Philippines (5.38 percent) and Thailand (5.53 percent).

Laudable but not enough

The ADB said that the policy measures adopted by the governments of the Philippines, Thailand and South Korea to reduce the adverse impacts of the crisis are “laudable” but “they do not always address the underlying weaknesses of the labor market that were highlighted by the crisis.”

In the wake of the crisis, these governments implemented policies to help stem job losses, provide economic relief and stimulate the macroeconomy.

The ADB said that these policy responses ranged from the long-term Green New Deal in South Korea to the palliative Comprehensive Livelihood and Emergency Employment Program (CLEEP) in the Philippines.

“The Philippine government’s policy responses to the crisis provided some relief for those who were adversely affected—it provided temporary jobs and gave relief to poor families. However, these responses only address short-term concerns. What is needed in this time of crisis is to determine where growth will come from in the future and start planning ahead,” the bank added.

Like South Korea, the Philippines needs a long-term vision of where its growth prospects lie and allocate resources toward that goal, the ADB reported.

The lender added that funds allocated for fiscal stimulus need to be directed toward endeavors that ensure future productivity such as building infrastructure and improving health and education services rather than for dole outs. –Darwin G. Amojelar, Senior Reporter, Manila Times