Economy in 2012: Rising joblessness, poverty amid Aquino admin’s claims of growth

Joblessness, poverty and hunger are reaching record highs under the Aquino administration amid claims of growing economy

Joblessness, poverty and hunger are reaching record highs under the Aquino administration amid claims of growing economy (Photo from www.flickr.com)

In 2012, the dominant theme peddled by the Aquino administration was “good governance is good economics”. The main propaganda line of Malacañang is that the “daang matuwid” (straight path) has created a favorable environment for economic growth that is inclusive. From being the sick man of Asia, the country now brims with vitality, declared President Benigno Aquino III in his State of the Nation Address (Sona).

To the uncritical, such assertions would seem hard to doubt. For one, the national accounts do show rosy numbers. The Philippines is beating expectations and has been one of the supposed few bright spots amid a gloomy world economy. International banks, local and foreign investors, credit rating agencies and multilateral financial institutions are one in saying that the prospects are indeed upbeat for the country. There are even claims that we are the new tiger in the region, joining the likes of Singapore and South Korea.

Good news for big business

After growing by 7.1% in the third quarter, way above the market’s media forecast of 5.4%, the gross domestic product (GDP) has now expanded by 6.5% for the year. The strong third quarter performance prompted economic managers to revise upwards their 2012 full year GDP growth projection with the National Economic and Development Authority (Neda) claiming that the GDP will likely grow by 7% this year, well beyond the earlier official forecast of 5-6 percent. Many share the same optimism like the World Bank which also raised its projection to 6% from the previous 4.2 percent.

Meanwhile, Standard and Poor’s (S&P) upgraded the credit rating of the Philippines from “stable” to “positive” following the GDP report which put the country on track to make investment grade by next year. Officials say this means lower borrowing cost for government and lower cost for doing business in the Philippines. Prior to the S&P upgrade, the country has already posted eight credit rating upgrades since 2010. These developments continued to feed optimism in the market with trading at the Philippine Stock Exchange posting 38 record highs this year, making it one of the most vibrant equities market worldwide.

Other economic data, as culled by the Christmas Day Inquirer editorial, also seem encouraging. In the first nine months of the year and amid the global crisis, exports grew by 7.2% and foreign direct investments (FDI) by 40% compared to the same period in 2011. Consequently, as of November, the country has an all-time high of $84.1 billion in gross international reserves (GIR) and a balance of payments (BOP) surplus of $2 billion, five times its value during the same month last year.

The country’s big business groups share government’s high optimism, citing the so-called good economic fundamentals in 2012 that can lead to a “super-year” in 2013. They see more opportunities to further boost profits with the anticipated investment grade rating, the implementation of public-private partnership (PPP) projects and the upcoming midterm elections.

Big business, of course, has every reason to be upbeat. High GDP growth, robust stock market and favorable credit rating all reflect not the state of the ordinary people but of how lucrative the economy is for the moneyed few. Further, past and present policies of privatization and deregulation have allowed them to monopolize and greatly profit (through generous perks, incessant hikes in rates and user fees, and exploitation of workers) from key economic activities including public utilities and infrastructure development.  This small group of the super-rich has seen their wealth balloon in recent years. In 2009, the Forbes magazine reported that the 40 richest Filipinos had a combined wealth of $22.4 billion and in 2011, the amount more than doubled to $47.43 billion. The economy is growing but that’s good news only for big business.

Hard realities

Because amid the purportedly stellar growth of the economy, series of credit rating upgrades, streak of stock market highs and favorable reviews by banks, fund managers and investors are the hard realities of rising joblessness, worsening hunger and deteriorating poverty. Social indicators which are most vital to the people have been deteriorating in the past three years amid the record-high profits and wealth of elite families, high investor confidence and positive market sentiment.

Official unemployment rate as measured by the National Statistics Office (NSO) averaged 7% in 2011 and 2012 from 7.3% in 2010. We are supposed to be the second fastest growing economy in the region just behind China but the official jobless rates of our neighbors are much lower. Thailand’s is 0.7%; Singapore, 2.1%; Malaysia, 3%; South Korea, 3.8%; China, 4%; and Taiwan, 4.2 percent. To be sure, like in the Philippines, these official unemployment figures understate the true extent of domestic joblessness in the respective countries. But we cite them for the simple comparison of official data on the labor markets in the region. (Data on Asian countries are as of first quarter 2012 as compiled by the Bangko Sentral ng Pilipinas or BSP. During the same period, our official unemployment rate was 7.2 percent.)

And we have not even looked at the quality of available jobs. A quick peek at the NSO’s preliminary October 2012 Labor Force Survey shows that underemployed workers – those who are employed but are still looking for additional work – numbered 7.2 million; self-employed without any paid employee, 10.7 million; and unpaid family workers, 4.1 million. That’s easily 22 million out of the reported 37.7 million employed workers (more than 58%) with disputable quality of jobs.

Then for wage and salary workers, there’s the issue of extremely low pay amid a very high cost of living (made even worse by Aquino’s enforcement of the two-tier wage system which imposes a floor wage that is even lower than the minimum wage) as well as job insecurity amid widespread labor contractualization. The last time the National Wages and Productivity Commission (NWPC) issued its estimate of family living wage (which could approximate the amount needed by a regular family to live decently) it pegged it at ₱917 per day as of September 2008 in Metro Manila. More than four years later, Metro Manila’s daily minimum wage is still a measly ₱419-456.

To have an idea of how massive job scarcity in the Philippines could be, we may refer to the regular surveys of the Social Weather Stations (SWS). In 2010, 22.5% of Filipino workers said they were jobless which increased to 23.6% in 2011. This year, it ballooned to 30.1 percent. In absolute terms, there were about 9.5 million unemployed workers in 2010 and 2011; this year, it climbed to 12.1 million workers. In Aquino’s first three years in power, the number of workers who said that they were jobless increased by 2.6 million based on SWS surveys.  (Results of SWS surveys cited in this article all refer to annual averages.)

With the economy not producing enough jobs and livelihood opportunities even as wages become even more depressed, poverty and consequently hunger have been at their worst. Again using the SWS surveys, 47.5% of Filipino families considered themselves poor in 2010. Since then, the percentage has steadily climbed to 49.3% in 2011 and 51% this year. There are now around 10.3 million families who consider themselves poor, up from 9.9 million in 2011 and 8.9 million two years ago. Thus, in the first half of Aquino’s term, the number of poor families ballooned by 1.4 million. This means that some 7 million Filipinos have been added to the number of poor in the past three years. Note that between 2009 and 2012, the budget for the controversial conditional cash transfer (CCT) program swelled from just ₱5 billion to ₱39.4 billion (a whopping 688% increase) but apparently failing to make a dent on poverty.

Hunger incidence, still as surveyed by the SWS, follows the same path. In 2010, the percentage of families who reported to have experienced hunger was at 19.1 percent. It climbed to 19.9% the next year and to 21.1% this year. In absolute figures, there were 3.6 million hungry families in 2010; 4 million in 2011; and 4.3 million in 2012. Under Aquino, the number of Filipino families who experience hunger has so far grown by 700,000 or about 3.5 million people as measured by the SWS.

ph economy in 2012 - table

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Sona 2012: Reviewing Aquino’s “Social Contract” and performance (Part 1)

Aquino promised “inclusive growth” that creates jobs at home. After two years, his administration has turned out to be the largest exporter of Filipino workers (Photo from inquirer.net)

On job creation

On June 30, President Benigno Aquino III will mark his second year in office. Then on July 23, he will deliver his third State of the Nation Address (Sona). How do we assess his performance so far? One approach is to gauge Aquino’s achievements vis-à-vis the promises he made to the people in 2010. This series of articles reviews the performance of the President in terms of his campaign promises on improving the economy and the living condition of the people.

Promises

As reference, we will use the document “A Social Contract with the Filipino People”. In this document, then presidential bet Aquino outlined his platform of government. We will also refer to the Philippine Development Plan (PDP) 2011-2016, which details how Aquino plans to implement his so-called Social Contract.

Among others, Aquino promised to transform national leadership:

  1. From a government that merely conjures economic growth statistics that our people know to be unreal to a government that prioritizes jobs that empower the people and provide them with opportunities to rise above poverty
  2. From relegating education to just one of many concerns to making education the central strategy for investing in our people, reducing poverty and building national competitiveness
  3. From treating health as just another area for political patronage to recognizing the advancement and protection of public health, which includes responsible parenthood, as key measures of good governance
  4. From government policies influenced by well-connected private interests to a leadership that executes all the laws of the land with impartiality and decisiveness
  5. From treating the rural economy as just a source of problems to recognizing farms and rural enterprises as vital to achieving food security and more equitable economic growth, worthy of reinvestment for sustained productivity
  6. From government anti-poverty programs that instill a dole-out mentality to well-considered programs that build capacity and create opportunity among the poor and the marginalized in the country
  7. From a government that dampens private initiative and enterprise to a government that creates conditions conducive to the growth and competitiveness of private businesses, big, medium and small
  8. From a government that treats its people as an export commodity and a means to earn foreign exchange, disregarding the social cost to Filipino families to a government that creates jobs at home, so that working abroad will be a choice rather than a necessity; and when its citizens do choose to become OFWs, their welfare and protection will be the government’s priority

These Social Contract commitments can be categorized into five: (1) Job creation; (2) Provision of social services; (3) Poverty reduction; (4) Agricultural development; and (5) Promotion of private business.

New jobs

Aquino criticized the Arroyo administration for conjuring false growth statistics. In his PDP, Aquino said that his government will aim for inclusive growth. This means economic expansion which translates to more jobs. The PDP has specifically set a target of one million new jobs every year, based on an annual growth of 7-8% in the gross domestic product (GDP).

Using official data from the National Statistics Office (NSO), the average number of jobs in 2010 was about 36 million. It increased to 37.2 million in 2011 and to 37.6 million this year. Aquino, thus, has “created” around 1.6 million new jobs or 800,000 a year. This seems impressive considering that the GDP grew by an average of just 4.5% a year during the period.

But the additional jobs are negated by the increase in the size of the labor force. From 2010 to 2012, the labor force grew by 1.6 million, the same volume as the increase in the number of jobs. Hence, official unemployment did not improve during the period, remaining at more than 7 percent.

Dismal quality

Further, the quality of additional jobs remained dismal. Of the 1.6 million new jobs, more than 800,000 were produced by the services sector, characterized by highly irregular, less productive employment. They include jobs covered by “endo” (end of contract) and “5-5-5” schemes, where workers are hired under rotating 5-month contracts. Aquino has rejected proposals to fully ban contractualization, along with the ₱125 wage hike bill, claiming they will create “more problems”.

Also, more than 500,000 of the new jobs were self-employed and unpaid family workers. This implies that almost a third of jobs created were a result of workers’ own efforts to cope with limited employment opportunities. Meanwhile, underemployment, which captures the unsatisfactory quality of present jobs, increased by about 149,000 from 2010 to 2012. Estimates

Of course, it could be argued that low quality jobs are better than no jobs at all. But what Aquino promised are new jobs that empower the people and give them the chance to get out of poverty. To be sure, part-time, insecure or unpaid jobs do not allow workers to be productive enough and improve their miserable condition. Worse, jobs being created are not only low quality but also insufficient in relation to the burgeoning labor force.

Flawed count

It does not help that NSO data on employment tend to understate domestic job scarcity. Official methodology counts as employed those who “worked” for even just one hour in a week, which artificially bloats the number of employed. On the other hand, it excludes as unemployed the job seekers who are unavailable for work despite an opportunity due to illness, family obligations, etc. This falsely deflates the number of jobless.

Aquino is aware of this anomaly. In one of his press briefings prior to official proclamation, he said one of the first things he will do is to clarify how government counts the jobless. This, according to Aquino, will let government design a more reliable employment program. Alas, Aquino chose to continue the unreliable NSO methodology began by the Arroyo administration in 2005 in an obvious attempt to hide the worsening jobs crisis.

Deteriorating crisis

Fortunately, independent surveys, such as the one regularly conducted by the Social Weather Stations (SWS), provide us a more dependable picture of the domestic labor market. In its latest (March 2012) survey on adult unemployment, the SWS reported that 34.4%, or about 13.8 million workers, are jobless. Using SWS surveys, it appears that the incidence of unemployment is worst under Aquino, averaging 26.8% in his first two years. During the term of Gloria Arroyo, it averaged 19.6%; Joseph Estrada, 9.2% and; Fidel Ramos, 10.3 percent. Unemployment is on its way to triple its level from just two decades ago.

The current jobs crisis is the result of the accumulated impact of decades of defective and destructive economic programs implemented by previous regimes such as trade and investment liberalization, neoliberal restructuring of agriculture, etc.

Aquino is not expected to fully reverse this long-term trend of deteriorating job scarcity in two years. But instead of laying down the groundwork to address the jobs crisis such as reviewing and scrapping laws that liberalized key sectors of the economy, it’s business as usual under the Aquino administration.

No industrialization plan

Export-oriented, foreign capital-dependent industries that are vulnerable to global boom and bust continue to be promoted under the PDP 2011-2016. Local micro, small and medium enterprises (MSMEs), which account for around 61% of employment, remain marginalized as policies continue to favor big and foreign corporations.

There is no plan to reverse trade and investment liberalization that destroyed local industries and jobs, especially MSMEs. There is no industrialization plan anchored on vibrant domestic production and consumption. MSME development is still geared towards linking them to the highly volatile foreign markets and as subcontractors of mostly foreign firms. Thus, the potential of MSMEs to massively and sustainably contribute to domestic job creation remains greatly hampered.

Also, Aquino does not have a genuine land reform agenda, which is another program that can create a huge number of jobs. Instead, he has been promoting public-private partnership (PPP) in agriculture that tends to displace farmers and farm workers, while peddling the deception of the Comprehensive Agrarian Reform Program Extenstion with Reforms (Carper).  (More on this in a separate article.)

Largest exporter of workers

Indeed, this administration does not have a comprehensive and sustainable job creation plan to speak of. Contrary to the Social Contract’s pronouncement that it will create jobs at home and will not treat our workers as export commodities, Aquino has turned out to be the largest exporter of Filipino workers among all Presidents. In the past two years, Aquino has aggressively pursued new bilateral deals with various countries to create additional market for Philippine labor export. It has recently lifted the deployment ban in politically turbulent countries like Libya, Sudan and Nigeria as well as in Iraq and Afghanistan.

Data from the Philippine Overseas Employment Administration (POEA) show that the deployment of overseas Filipino workers (OFWs) under Aquino has already reached around 1.4 million a year. During Arroyo’s time, annual deployment was pegged at 1 million; Estrada, 0.84 million; Ramos, 0.69 million; and Cory Aquino, 0.47 million. OFW deployment has already almost tripled since the administration of Aquino’s mother.

Neglecting OFW welfare

Worse, Aquino has been remiss even in his commitment to ensure the welfare and protection of OFWs. Migrante International noted in a report that the 2012 budget for OFW welfare and services has been cut by ₱792 million. Per OFW, the Aquino administration is allocating a measly ₱262 for welfare and services. Meanwhile, it is collecting a huge ₱20,000 from each OFW for various fees and taxes.

Aquino’s neglect of migrant workers is further illustrated in the inept evacuation of OFWs from MENA (Middle East and North Africa) countries undergoing political turmoil, not to mention the four Filipinos executed abroad in the past two years.

Part II: How the rich is getting (scandalously) richer under Aquino

(Dis)Counting unemployment

Domestic job scarcity is now at its worst under the Aquino administration (Photo from pinoy-ofw.com)

When the Social Weather Stations (SWS) released its survey showing that the Aquino administration continues to enjoy a very good net satisfaction rating of 56%, presidential spokesperson Edwin Lacierda had this to say:

“This recent measurement of public opinion indicates that the public not only sees, but has tangibly felt, the government’s efforts to improve services, push for inclusive growth, and upgrade response to disasters. It contradicts the hypercritical few who refuse to see the government doing its work, under the indivisible view that justice and expanding the economy must be jointly pursued.”

But when the same survey group disclosed that unemployment in the country has worsened to 24%, Malacañang sang a different tune. Disputing the survey, Lacierda said: “We have 54,000 respondents… In fact, based on our figures for 2011, the unemployment figures went down.”

President Aquino himself questioned the SWS survey on unemployment. “What was shown to me in general is… there is a .4 percent reduction, from 7.4 to 7 percent, that’s our unemployment figure. (This) seems to belie the SWS survey. I think they cannot be both, they are opposites, they cannot be both true at the same time.”

Lacierda and the President are citing the official Labor Force Survey (LFS) that the National Statistics Office (NSO) conducts every quarter.

But can SWS be both right and wrong at the same time? This seems to be the logic of Malacañang after claiming that the SWS survey on net satisfaction validated the good performance of government while rejecting the same group’s report that unemployment is deteriorating. Note that both results were generated from the same Dec. 3-7, 2011 survey of the SWS covering 1,200 respondents nationwide.

SWS survey shows that there about 9.7 million jobless workers as of December 2011, or almost four times the official unemployment data of about 2.6 million as of October 2011. This wide discrepancy in the number of unemployed is explained by the problematic methodology being used by the National Statistics Office (NSO) in measuring unemployment. As I have pointed out in a previous post:

NSO jobs figures have long been unreliable for distorting the concept of unemployment and statistically deflating the extent of job scarcity in the country. For instance, the NSO does not count as unemployed those who are seeking work but for one reason or another (e.g. school or family obligations, illness, etc.) will be unavailable for work despite an opportunity within two weeks after the survey. Meanwhile, household members, who help operate the small family farm, sari-sari store, or eatery, are considered employed, including those who helped for even just one hour in the past week before the NSO survey.”

Until 2004, SWS unemployment survey (which started in 1993) tracked the official jobless rate. However, the data sharply diverged from each other beginning in 2005 when the NSO changed its definition of employment. (See Chart 1)

The new definition of unemployment that the NSO started using in its April 2005 LFS round excluded discouraged workers and those not willing or available for work from the labor force. (The redefinition is contained in Resolution No. 15 passed by the National Statistical Coordination Board or NSCB in 2004. You may access the said resolution here.)

This redefinition, which further distorted the already problematic old official definition of employment, had the net effect of further statistically reducing the number of unemployed. In 2007, the year the NSO last provided comparative data on employment figures based on its old and new definitions, the LFS showed only an annual unemployment average of 2.6 million workers under the new definition, or around 1.4 million less than the unemployment average using the old definition.

When the NSO adopted the new definition in 2005 and stopped releasing unemployment figures based on the old definition in 2007, it effectively discouraged the comparison of long-term annual averages in the country’s unemployment. Prior to the redefinition of employment in 2005, official NSO data on joblessness showed a steady deterioration of the domestic labor market starting in the mid-1970s. (See Chart 2)

Annual averages in official unemployment rate under the old definition progressively climbed up from 5.1% in the 1970s to 7.1% in the 1980s; 9.5% in the 1990s; and 11.3% from 2000 to 2006 (figures based on the old definition are available until 2006). Under the new definition, official unemployment has averaged 7.3% (2007 to 2011). This has serious policy making implications because the change in definition suddenly erased the historical trend of worsening joblessness and how the domestic economy has failed to produce jobs due to defective programs implemented by administrations in the past 40 years.

Fortunately, we can still rely on the SWS survey to see how unemployment has moved since the second half of the 2000s. Using SWS data, unemployment is now at its worst under the Aquino administration which posted an average of 23% (2010 to 2011) as compared to Arroyo’s 19.6% (2001 to 2009); Erap’s 9.2% (1998 to 2000); and Ramos’s 10.3% (1993 to 1997). (See Chart 3)

To be sure, the Aquino presidency has just started and it could certainly argue that it still has until 2016 to reverse the worsening jobs crisis in the country. But looking at the administration’s development blueprint gives no hope that unemployment will improve soon. (Read here, here, and here) Worse, Aquino is not only continuing the flawed programs of Gloria Arroyo, but like his predecessor, is also resorting to statistical distortion to hide job scarcity and conceal his lack of long-term job creation program. #

On college graduates and the labor market

PUP students protest 1,567% tuition hike (photo from Kabataan partylist as posted by Bulatlat.com)

Thanks to the intense and “fiery” student protests, the Commission on Higher Education (CHED) chair was forced to issue a statement he will not allow the planned hike in the Polytechnic University of the Philippines’ (PUP) tuition by an outrageous 1,567 percent (P12 to P200 per unit). Otherwise, incoming PUP freshmen, which the PUP administration claims are the ones to be affected by the tuition hike, will be forced to pay exorbitant fees.

And worse, these freshmen – like those before them – will discover four, five years later (if they manage to graduate amid the progressively increasing tuition and other costs) that no job awaits them. This is another dimension in the increasingly commercialized tertiary education in the country – as state colleges and private universities squeeze students and their parents dry, government could not even guarantee employment for the college graduates.

Consider these numbers. For every 2 new college graduates produced in the last 8 years, only 1 job that befits the skills and qualifications of these degree holders is added  to the domestic labor market. And they will have to compete for this job with the unemployed college graduates from previous years.

Dr. Romulo Virola, Secretary General of the National Statistical Coordination Board (NSCB), devised a method to estimate the capacity of the labor market to absorb the graduates of tertiary schools. He related the number of tertiary graduates with new hires by major occupation group.

Virola deducted the employment for laborers and unskilled workers, farmers, forestry workers, fishermen, and plant operators based on the assumption that college graduates will apply for work only in the other occupation groups. He estimated the number of new hires by obtaining the difference in employment between the present year and the previous year. Finally, Virola divided the number of new hires with the number of tertiary graduates.

Using this method,  processed data from the Labor Force Survey (LFS, January rounds) of the National Statistics Office (NSO) and the CHED will show that from 2003 to 2010 (variables for earlier years are incomplete), the number of new hires as a percentage of the total number of college graduates is pegged at only 63 percent per year.

This suggests a very tight labor market for the country’s new graduates, which reach more than 439,000 annually in the last eight years. The number of new jobs created every year in occupation groups where the college graduates may want to apply for such as officials of government and special interest organizations, corporate executives, managers, managing proprietors, and supervisors; professionals; technicians and associate professionals; clerks; service workers and shop and market sales workers; and trade and related workers is pegged at only less than 270,000.

Note also that the portion of college graduates among the ranks of the unemployed has been increasing through the years. Available data show that from 15.8 percent in 2004, the portion of college graduates among the unemployed has increased to more than 18 percent annually in the last four years.

So where will our college graduates go? Call center? New call center jobs are expected to drop dramatically this year – from 50,000 in 2008 to just 10,000 in 2010, according to an ANC news report. Work abroad? The number of newly hired land-based overseas Filipino workers (OFWs) declined by 30 percent between 2007 (306,383 new hires) and 2008 (216,803). Or just follow former National Economic and Development Authority (NEDA) chief and now Liberal Party senatoriable Ralph Recto’s advise to graduates last year  – “do not look for work, go back to school” – because the backward Philippine economy and the recession-hit global economy could not produce jobs?

Congratulations, graduates. Welcome to the real world.

Post-SONA notes: Gloria’s statistically incoherent 8 M jobs

Mrs. Arroyo delivering her SONA 2009 speech (Reuters photo)

Mrs. Arroyo delivering her SONA 2009 speech (Reuters photo)

She promised one million new jobs a year but critics are one in saying that the jobs crisis is at its worst under her administration.

To silence her critics and justify her regime, did Mrs. Gloria Arroyo ask government statisticians to give her, at all cost, “one million jobs a year” that she can cite in her State of the Nation Address (SONA)?

On her ninth and ostensibly final SONA last July 27, Mrs. Arroyo declared:

“Lumikha tayo ng walong milyong trabaho, an average of a million per year, much, much more than at any other time”.

Throughout the much anticipated SONA speech, it was the only reference that Mrs. Arroyo made to her job generation efforts. But it was a major statement which concretely summed up the supposed gains of the Arroyo administration in creating jobs since 2001.

I immediately wondered where Mrs. Arroyo’s speech writers got the figure of 8 million jobs. Official employment records released by the National Statistics Office (NSO) do not add up to 8 million additional jobs since 2001. Thus, I tried to find the explanation in the Technical Report that usually accompanies the SONA of Mrs. Arroyo but as of this writing, such report has not been made public yet.

Further research revealed an interesting discovery. On the website of the Bureau of Labor and Employment Statistics (BLES), an announcement on “Methodology in computing employment creation under President Arroyo administration: 2001-2009 (April)” is posted.

The BLES also posted a link on a resolution of the National Statistical Coordination Board (NSCB), Resolution No. 9 “approving and adopting the official methodology for generating annual labor and employment estimates”.

The announcement and the NSCB resolution on the BLES website, which were posted after the SONA, are attempts to “statistically” explain the 8 million jobs Mrs. Arroyo cited. But instead of providing satisfactory answers, they exposed the brazen lie behind the SONA claim on jobs created by the Arroyo administration.

NSCB Resolution No. 9 was supposedly approved on July 6, or three weeks before the SONA. It stated that in generating annual labor and employment estimates, the average estimates of the four rounds of Labor Force Survey (LFS) shall be used. The NSO conducts the LFS every January, April, July, and October.

Using this official methodology, the BLES computed employment creation under the Arroyo administration and arrived at the figure of 8.095 million jobs. (See Table)She promised one million new jobs a year but critics are one in saying that the jobs crisis is at its worst under her administration.
To silence her critics and justify her regime, did Mrs. Gloria Arroyo ask government statisticians to give her, at all cost, “one million jobs a year” that she can cite in her State of the Nation Address (SONA)?
On her ninth and ostensibly final SONA last July 27, Mrs. Arroyo declared:
“Lumikha tayo ng walong milyong trabaho, an average of a million per year, much, much more than at any other time”.
Throughout the much anticipated SONA speech, it was the only reference that Mrs. Arroyo made to her job generation efforts. But it was a major statement which concretely summed up the supposed gains of the Arroyo administration in creating jobs since 2001.
I immediately wondered where Mrs. Arroyo’s speech writers got the figure of 8 million jobs. Official employment records released by the National Statistics Office (NSO) do not add up to 8 million additional jobs since 2001. Thus, I tried to find the explanation in the Technical Report that usually accompanies the SONA of Mrs. Arroyo but as of this writing, such report has not been made public yet.
Further research revealed an interesting discovery. On the website of the Bureau of Labor and Employment Statistics (BLES), an announcement on “Methodology in computing employment creation under President Arroyo administration: 2001-2009 (April)” is posted.
The BLES also posted a link on a resolution of the National Statistical Coordination Board (NSCB), Resolution No. 9 “approving and adopting the official methodology for generating annual labor and employment estimates”.
The announcement and the NSCB resolution on the BLES website, which were posted after the SONA, are attempts to “statistically” explain the 8 million jobs Mrs. Arroyo cited. But instead of providing satisfactory answers, they exposed the brazen lie behind the SONA claim on jobs created by the Arroyo administration.
NSCB Resolution No. 9 was supposedly approved on July 6, or three weeks before the SONA. It stated that in generating annual labor and employment estimates, the average estimates of the four rounds of Labor Force Survey (LFS) shall be used. The NSO conducts the LFS every January, April, July, and October.
Using this official methodology, the BLES computed employment creation under the Arroyo administration and arrived at the figure of 8.095 million jobs. (See Table)

But here’s the rub.

BLES defined employment creation as the annual increments in number of employed workers. Mrs. Arroyo said in her SONA speech that the jobs created reached 8 million or one million per year. Thus, it means the annual increments from 2001 to 2008.

Applying the NSCB Resolution No. 9 and the BLES-defined employment creation on the period 2001 to 2008, the jobs “created” is only 6.64 million. But Mrs. Arroyo needed 8 million. The solution – add the increment in the number of employed for 2009.

For consistency, the BLES should have computed the average estimates for the January and April LFS (the July and October rounds are not yet available) but this will only produce 535,000 jobs and the number needed is at least 1.36 million. To address this, the BLES instead compared the difference between the April 2009 LFS and the April 2008 LFS and found its needed figure – 1.46 million.

So, they arrived at a statistically incoherent 8 million jobs – the sum of the annual increments in the average employment results of four LFS rounds per year from 2001 to 2008 plus the increase in the number of employed between the April LFS rounds in 2008 and 2009.

Actually, BLES further statistically distorted the meaning of job creation by simply adding up the increments in the number of employed workers per year. It did not factor in the increase in the number of unemployed which should have been subtracted from the increase in the number of employed to arrive at “net job creation”. Using this methodology, we will arrive at a smaller job creation figure of around 5.92 million from 2001 to 2008.

This is how they gave Mrs. Arroyo her 8 million jobs created, or one million jobs per year.

These issues are just the tip of the iceberg in terms of government’s systematic efforts to hide job scarcity through flawed methodologies and distorted labor and employment definitions. For instance, we did not discuss yet the kind of jobs supposedly generated since 2001 – are they productive, gainful, secure, etc.?

Government agencies are expected to generate credible and reliable data and statistics to help guide in policy making and development planning. That they are being used to conjure illusions of prosperity only shows the extent of desperation of the Arroyo administration to justify its illegitimate and prolonged rule.

SONA 2009 notes: almost 4 M jobless a year (and it’s also understated)

In her first SONA (2001), Mrs. Arroyo declared that her economic philosophy is that “the way to fight poverty is to create jobs, not destroy them”. She even made a concrete promise to create one million new jobs in agriculture and fisheries in one year alone.
In her 2002 SONA, Mrs. Arroyo said that her working agenda will focus on creating and improving job opportunities. And she meant not simply jobs but “jobs paying decent wages”.
In her 2003 SONA, Mrs. Arroyo recognized that for the practical purposes of most people, “government exists to provide jobs”.
After making big promises on job creation and preservation, by 2004, Mrs. Arroyo was asking for “patience” from the people. In her SONA that year, she said: “We must wait in patience for the reforms to work… konti pang sakripisyo (a little more sacrifice)… because world competition is keen and we want the jobs not only to come but to stay”.
In her 2005 SONA, Mrs. Arroyo was immodest about her job generation program. Remember that a month before her SONA, the “Hello Garci” scandal broke out, triggering massive protests and calls for her ouster or resignation. Her speech thus had to be extra highfalutin about her supposed achievements. She bragged, among others, of an economy that “surprised many at home and abroad” while “generating 4 million jobs in the last four years”.
In 2006, Mrs. Arroyo acclaimed two of her most important job “creation” initiatives – business process outsourcing (BPO) and labor export. She said that with the proliferation of call centers in the country, “we not only found jobs but kept families intact”. But she was also quick to recognize that “we are a great people” because “we compete and win in every imaginable job throughout the world”.
She repeated her promotion of BPO jobs under her government in 2007, citing in her SONA speech that “the business services sector has become the fastest growing in the economy”. She said she expects the sector to become as important as labor export and that by 2010, the sector could produce $12 billion or the same amount of OFW remittances.
Her last SONA in 2008 saw Mrs. Arroyo addressing the country “at a crucial moment in world history”. The worst global economic crisis since the Great Depression started to unfold and she blamed this for undermining her supposed gains in managing the Philippine economy, including its creation of “a million new jobs”. She said to address the global challenge, the country must go on “building and buttressing bridges to allies around the world to bring in “investments to create jobs”, among others.
How can we sum up Mrs. Arroyo’s achievements in terms of job creation and preservation in the last eight years?
First, we may compare the job situation under her watch with that of her own targets or commitments.
Under the Arroyo administration, the country has been experiencing its worst jobs crisis, which has been further aggravated by the wave of massive displacements due to the impact of the global financial and economic crisis. Unemployment rate since 2001 has remained at more than 11% per year with about 4 million workers jobless every year. Annual unemployment rate under the Aquino to Estrada administrations was between 9 to 10% while the number of unemployed was between 2 to 3 million a year.
Consequently, Mrs. Arroyo has also been the most aggressive in exporting Filipino workers since the domestic job creation under her pro-globalization policies have been greatly undermined. Every year, OFW deployment under the Aquino to Estrada administrations was between 361,000 to 693,000 but under Arroyo, the figure ballooned to more than 1 million a year.
In fact, Mrs. Arroyo is the only Philippine president to categorically declare labor export as an official job creation policy of government. Administrations since Marcos have considered (at least on paper) labor export as “temporary” or “secondary” option for Filipino workers.
Second, we may compare her achievements with that of her own targets or commitments.
In her 2004 SONA, she outlined her so-called 10-point agenda. Number one on this list is the “The creation of six million jobs in six years via more opportunities given to entrepreneurs, tripling of the amount of loans for lending to small and medium enterprises and the development of one to two million hectares of land for agricultural business”. This means one million new jobs every year.
In 2004, the average number of employed workers was 31.6 million. This means that by this year, the total number of employed workers should be at least 37.6 million. Based on the official Labor Force Surveys in January and April 2009 of the National Statistics Office (NSO), the average number of employed workers this year is only 34.63 million. From 2004 to 2009, the annual average of additional jobs is only 690,000, not one million as promised by Mrs. Arroyo. And we’re only talking about official figures or “employment” as defined by government’s ridiculous standard (i.e. anyone who has worked for an hour, paid or unpaid, for the past week before the NSO conducted its survey is considered employed, etc.)
In her supposedly farewell SONA on July 27, what will she say about jobs now that the direct impact of the global crunch is starting to impact on domestic jobs as well as on OFWs?
Abangan.
4 million jobless a year

4 million jobless a year

In her first SONA (2001), Mrs. Arroyo declared that her economic philosophy is that “the way to fight poverty is to create jobs, not destroy them”. She even made a concrete promise to create one million new jobs in agriculture and fisheries in one year alone.

In her 2002 SONA, Mrs. Arroyo said that her working agenda will focus on creating and improving job opportunities. And she meant not simply jobs but “jobs paying decent wages”.

In her 2003 SONA, Mrs. Arroyo recognized that for the practical purposes of most people, “government exists to provide jobs”.

After making big promises on job creation and preservation, by 2004, Mrs. Arroyo was asking for “patience” from the people. In her SONA that year, she said: “We must wait in patience for the reforms to work… konti pang sakripisyo (a little more sacrifice)… because world competition is keen and we want the jobs not only to come but to stay”.

In her 2005 SONA, Mrs. Arroyo was immodest about her job generation program. Remember that a month before her SONA, the “Hello Garci” scandal broke out, triggering massive protests and calls for her ouster or resignation. Her speech thus had to be extra highfalutin about her supposed achievements. She bragged, among others, of an economy that “surprised many at home and abroad” while “generating 4 million jobs in the last four years”.

In 2006, Mrs. Arroyo acclaimed two of her most important job “creation” initiatives – business process outsourcing (BPO) and labor export. She said that with the proliferation of call centers in the country, “we not only found jobs but kept families intact”. But she was also quick to recognize that “we are a great people” because “we compete and win in every imaginable job throughout the world”.

She repeated her promotion of BPO jobs under her government in 2007, citing in her SONA speech that “the business services sector has become the fastest growing in the economy”. She said she expects the sector to become as important as labor export and that by 2010, the sector could produce $12 billion or the same amount of OFW remittances.

Her last SONA in 2008 saw Mrs. Arroyo addressing the country “at a crucial moment in world history”. The worst global economic crisis since the Great Depression started to unfold and she blamed this for undermining her supposed gains in managing the Philippine economy, including its creation of “a million new jobs”. She said to address the global challenge, the country must go on “building and buttressing bridges to allies around the world to bring in “investments to create jobs”, among others.

How can we sum up Mrs. Arroyo’s achievements in terms of job creation and preservation in the last eight years?

First, we may compare the job situation under her watch with that of her own targets or commitments.

Under the Arroyo administration, the country has been experiencing its worst jobs crisis, which has been further aggravated by the wave of massive displacements due to the impact of the global financial and economic crisis. Unemployment rate since 2001 has remained at more than 11% per year with about 4 million workers jobless every year. Annual unemployment rate under the Aquino to Estrada administrations was between 9 to 10% while the number of unemployed was between 2 to 3 million a year.

Consequently, Mrs. Arroyo has also been the most aggressive in exporting Filipino workers since the domestic job creation under her pro-globalization policies have been greatly undermined. Every year, OFW deployment under the Aquino to Estrada administrations was between 361,000 to 693,000 but under Arroyo, the figure ballooned to more than 1 million a year.

In fact, Mrs. Arroyo is the only Philippine president to categorically declare labor export as an official job creation policy of government. Administrations since Marcos have considered (at least on paper) labor export as “temporary” or “secondary” option for Filipino workers.

Employment indicators under the Aquino, Ramos, Estrada, and Arroyo administrations

Administration

No. of jobless workers per year (in million)

No. of deployed OFWs per year (in million)

Aquino (1987-1991)

2.3

0.36

Ramos (1992-1997)

2.6

0.46

Estrada (1998-2000)

3.2

0.69

Arroyo (2001-2008)

3.8

1.01

Compiled and processed using NSO and POEA data

Second, we may compare her achievements with that of her own targets or commitments.

In her 2004 SONA, she outlined her so-called 10-point agenda. Number one on this list is the “The creation of six million jobs in six years via more opportunities given to entrepreneurs, tripling of the amount of loans for lending to small and medium enterprises and the development of one to two million hectares of land for agricultural business”. This means one million new jobs every year.

In 2004, the average number of employed workers was 31.6 million. This means that by this year, the total number of employed workers should be at least 37.6 million. Based on the official Labor Force Surveys in January and April 2009 of the National Statistics Office (NSO), the average number of employed workers this year is only 34.63 million. From 2004 to 2009, the annual average of additional jobs is only 690,000, not one million as promised by Mrs. Arroyo. And we’re only talking about official figures or “employment” as defined by government’s ridiculous standard (i.e. anyone who has worked for an hour, paid or unpaid, for the past week before the NSO conducted its survey is considered employed, etc.)

Employed workers from 2001 to 2009 (in million)

Year

Jan

Apr

Jul

Oct

2003

30.12

30.42

29.86

31.52

2004

31.52

31.52

31.62

31.73

2005

31.63

32.22

32.52

32.88

2006

32.38

33.02

33.26

33.18

2007

33.55

33.71

33.33

33.67

2008

33.69

33.54

34.60

34.53

2009

34.26

34.99

-

-

Compiled using NSO data

In her supposedly farewell SONA on July 27, what will she say about jobs now that the direct impact of the global crunch is now being felt by domestic jobs as well as by OFWs?

Abangan.

Why Arroyo’s P330-billion ‘stimulus’ package will not solve joblessness (Part 2)

Originally published in Bulatlat.com

Part 2 of a two-part series (See Part 1)

Photo from Getty Images

Photo from Getty Images

As Filipino workers marked Labor Day last May 1, about 400 from their ranks are being displaced daily as fallout of the global economic crisis.

By the Department of Labor and Employment’s (DoLE) own reckoning, the global crisis has already displaced almost 50,400 workers in the Philippines as of mid-March. It also reported that about 59,200 workers were affected by workday reduction, job rotation and compressed workweek.

Making the situation worse is the mass displacement taking place among overseas Filipino workers (OFWs). Official report pegs the number of retrenched OFWs at almost 6,500 in 19 countries as of January. But independent monitoring by migrant workers’ group Migrante International shows that the figures, as of February, could reach around 20,000 OFWs from 17 countries.

But government as usual wants us to believe that it is on top of the situation. The supposed resiliency of the economy and Filipino workers are once more being hyped. Government is doing what it can to preserve and create jobs amid the global recession, according to Arroyo administration officials.

In fact, one of the major components of Mrs. Gloria Arroyo’s PhP330-billion Economic Resiliency Plan (ERP) is the Comprehensive Livelihood and Emergency Employment Program (CLEEP). As a sub-program of the ERP, the CLEEP aims to hire for emergency employment and fund and supervise livelihood projects.

“Good news” or false hope?

From its earlier grim forecasts, officials have shifted to the “good news” approach when talking about the employment situation. As Labor Secretary Marianito Roque puts it when asked on the latest statistics on job losses, “We’re focused on job creation. We are not talking anymore of displacements.” Roque previously described as “abnormal” the dislocations of workers due to the global crunch.

Latest government press releases highlight opportunities awaiting Filipino workers. DoLE sees the job crisis “easing up” in the second quarter, with “fewer workers losing their jobs and tens of thousands of new jobs anticipated”. In Mindanao alone, business process outsourcing (BPO) could create half a million jobs, the Department of Trade and Industry (DTI) said.

In her Labor Day message, Mrs. Arroyo repeated her favorite theme – that the resilient economy protected us from the global crisis and allowed us to continue growing. She added that Filipino workers’ skills and talents are “confounding the gloomy forecasts of pessimists”. The DoLE, for its part, hyped its May 1 Jobapalooza which was supposed to provide 250,000 local and overseas jobs.But this (over)optimism only gives Filipinos a false hope.

For one, it ignores the dim reality of the global economy, which is facing a crisis that, according to World Bank president Robert Zoellick, “no one knows how long it will last.” With the International Monetary Fund (IMF), the World Bank said recently that “the global economic crisis is turning into a human and development calamity.” The International Labour Organization (ILO) earlier called it a “global jobs crisis”.

As a result of the global crunch, the ILO said unemployment in Asia will jump to 97 million in 2009 – 7.2 million higher than last year. While no country-specific estimates were given, the ILO expects the number of jobless workers in Southeast Asia to grow by 2-3 million this year. It also noted that the Philippines, Pakistan and Cambodia have the fastest expanding labor force in the region and thus are among the most vulnerable.

Already in worst jobs crisis

These gloomy prospects come at a time when the backward and pre-industrial Philippine economy has been undergoing its worst jobs crisis. Lack of genuine industrialization and land reform has made the economy incapacitated to produce and expand gainful and sustainable jobs. Worse, rapid globalization since the 1990s has destroyed countless jobs and livelihood and further debilitated domestic employment generation.

From 2001 to 2007, the average annual unemployment rate is pegged at 11.3 percent with almost 4 million jobless workers every year. In the Aquino years (1987-1992), the averages were 9.5 percent and 2.3 million and have progressively climbed during the Ramos (1992-1998), Estrada (1998-2001) and Arroyo (2001-present) administrations. (Note that since its April 2005 Labor Force Survey (LFS), the NSO started to use a new definition of unemployment, which excluded discouraged workers and those not willing or available for work from the labor force. The shift had a net effect of “statistically” reducing the number of unemployed. For 2007, for instance, the LFS showed only an annual unemployment average of 2.6 million workers under the new definition, or around 1.4 million less than the unemployment average using the old definition. This paper used the old unemployment definition but the NSO has not yet released official data comparing unemployment under the old and new definitions for 2008.)

Notably, the unemployment rate has remained at double-digit despite a period of relatively high economic growth. The gross domestic product (GDP) grew by an average of more than 5 percent a year in 2001-2007, and peaked at a 30-year high 7.2 percent in 2007. Also significant is the increase in number of poor Filipinos (by almost 4 million between 2003 and 2006) during that period of high economic growth.

This again exposes the hollow optimism of government based on some projections that the Philippine economy is among the few that will not contract this year. If almost 4.1 million workers were jobless in an economy that grew by 7.2 percent in 2007, how many will be jobless when economic growth decelerates to, say 4.4 percent (government’s most optimistic scenario) this year?

Will the ERP mitigate the displacements?

In response to the massive dislocations of OFWs and local workers, the Arroyo administration came up with the CLEEP to “save and create jobs.” Government estimates that the program could generate at least 800,000 jobs. (See Table)

ERP table 3

As of February, Malacañang reported that the CLEEP has already created 70,000 jobs nationwide. But even if government achieves its target of 800,000 jobs under the CLEEP, it will still fail to even mitigate the rapid displacements of workers. Note that the labor force grows every year by an average of 900,000 while the number of jobless workers, even before the global recession, grows by 90,000 a year.

Statistically, they may “mitigate” job losses as reflected in the Labor Force Survey (LFS) of the National Statistics Office (NSO). The LFS simply asks if a worker is employed or has a livelihood but does not probe the duration of employment. More, CLEEP’s temporary jobs will cater, theoretically, to those who are displaced by the global crisis, not to the usual 4 million plus jobless workers the country has in the pre-recession years.

Overall, the ERP does not modify, but in fact continues, the flawed basic orientation in job generation of current and past administrations. Out of 800,000 target jobs under CLEEP, for instance, more than 500,000 will come from infrastructure projects of the Department of Public Works and Highways (DPWH). Most of these jobs and the other CLEEP targets, meanwhile, are aligned with the priority projects of the Super Regions.

The Super Regions, first unveiled by Mrs. Arroyo in her 2006 State of the Nation Address (SoNA), aims to attract foreign investments for export zones, mining, BPOs, agribusiness, etc. Thus, in terms of long-term employment, it will further undermine domestic job generation as local industries and producers are further marginalized.

Unreliable, insecure jobs

Meanwhile, the domestic job crisis is mitigated only through labor export, which under Mrs. Arroyo has been officially proclaimed as government policy for job generation. OFW deployment has now already reached one million per year, or almost three times the volume of annual deployment during the Aquino administration.

Despite its vulnerability as a means to generate jobs as shown by the current recession, the Arroyo administration continues to promote labor export. In fact, it is one of the job creation/preservation tools of the ERP. DoLE is mandated under the ERP to assist displaced OFWs by redeploying them to other emerging markets and identifying and developing new market niches, among others.

For affected workers in the export sector, the DoLE has established quick response teams (QRT) in its regional offices to devise an early warning system on possible displacements. It has been busy as well in organizing job fairs in various parts of the country such as the Jobapalooza last Labor Day.

But because jobs created by the economy are in the main dictated by foreign investments like BPOs and tourism, available employment at these job fairs are usually detached from the actual needs of the domestic labor market. While government hypes the number of potential jobs, it does not report how many workers were actually hired in these job fairs and how many were turned away due to jobs and skills mismatch.

If the Jobapalooza turnout is any indicator, it appears that a very small portion of the supposed available jobs translates to actual employment. Initial media reports say only 7,000 workers were hired on the spot during the Jobapalooza. If accurate, that figure is only less than 3 percent of the much-advertised 250,000 jobs that the activity was supposed to provide.

Worse, DOLE, unable to create a reliable job generation plan, has further legitimized labor flexibilization in the guise of preserving jobs. Under the ERP, it is actively promoting shortened work shifts, rotating forced leaves and other flexible labor schemes. These are contained in DoLE’s Advisory No. 2 which gives all employers more leeway to undermine the job security of their workers.

Flexible work arrangements must have the consent of affected workers, according to the said advisory. The issue however is that existing policies have already created an environment favorable to employers. The DOLE, by promoting flexible work, even if based on certain conditions, reinforces such environment that is hostile to workers.

The same argument holds true in terms of a substantial wage hike. The Bangko Sentral ng Pilipinas (BSP or Central Bank of the Philippines) declared as early as February that there is no need for a wage increase since the inflation rate is slowing down. This bolstered the excuse of companies, which Malacañang officials echo, that because there is a global recession, wage hikes will only further destroy jobs.

These preempt the initiatives of workers to negotiate with their employers for a wage increase. Besides, a review of past retrenchments and shut downs shows that unfair foreign competition, overdependence on a volatile global market and lack of government support, among others – and not wage hike – are behind the woes of most local firms.

In summary, the ERP of the Arroyo administration aims to create and preserve jobs through temporary, insecure and externally-driven (i.e. labor export and foreign investment) employment with even more measly pay. It is no longer new; such has been the case of employment in the Philippines for decades. But the ERP is pushing it to a new and higher level, at a greater expense, oppression and exploitation of Filipino workers.

People’s Fighting Demands

The ERP clearly shows that the Arroyo administration is not only unable but is also unwilling to deal with the global crisis outside the framework of its flawed economic program. We are thus challenged to put forward an alternative set of policy reforms and measures that will serve and protect our interests as a people and as a country struggling to achieve real and sustainable economic development.

On a positive note, the crisis is offering a unique opportunity for all vulnerable, oppressed and neglected segments of society – from the basic sectors to the marginalized Filipino businessman/woman – to unite and advance a common agenda for deeper economic reforms.

Such reforms must provide urgent economic relief as well as give an opening for a more substantial policy shift in terms of long-term direction and paradigm for the economy. With this in mind, the Bagong Alyansang Makabayan (Bayan or New Patriotic Alliance), through consultations with various sectors, has come up with the People’s Fighting Demands for Immediate Economic Relief and Long-Term Reforms. (See Annex)

The Fighting Demands builds on the people’s ongoing campaigns to establish a pro-people, pro-Filipino and nationalist economy. As a concrete alternative to the defective ERP, it outlines a set of short-term or urgent relief measures to truly mitigate the impact of the global crisis on ordinary Filipinos.

More importantly, the Fighting Demands advocates medium and long-term reforms that aim to gradually reorient and redesign the domestic economy towards the path of self-reliance and genuine industrialization. Needless to say, it would not materialize without a great and broad movement that will campaign and work hard to translate these proposals into actual national policies.

Annex

People’s Fighting Demands for Economic Relief and Long-Term Reforms: Ensuring a Pro-People and Nationalist Response to the Global Financial and Economic Crisis

I. Protection and Promotion of Jobs and Immediate Provision of Benefits and Assistance to Affected Workers

  • Ensure that due process are accorded to all workers, including overseas Filipino workers (OFWs), who are facing retrenchment or dislocation to prevent unreasonable termination.
  • Review all the cases of displaced workers with the employer citing the global financial and economic crisis as the reason behind such termination to determine if due process was observed and the reason cited was legitimate.
  • Ensure the easy access of all workers to all the benefits accorded to them by their social security and insurance systems.
  • Ensure that all claims due to the displaced workers such as separation pay and other entitlements must be given without delay by their employers.
  • Provide immediate relief, including but not limited to, direct cash assistance grant to all workers displaced by the global financial and economic crisis.
  • Ensure that displaced OFWs obtain from their employers the immediate provision of full compensation including separation pay, payment for the unexpired portion of their contracts, and reimbursement of air transportation fare.
  • Stop the imposition of onerous and additional fees on workers leaving the country to look for employment opportunities abroad.
  • Ensure that all benefits due to OFWs from their contribution to the funds of the Overseas Workers Welfare Administration (OWWA) are easily accessible and readily provided.
  • Stop contractualization and all forms of labor flexibilization schemes.
  • Stop the massive and systematic retrenchment of all public sector workers by scrapping all so-called “rationalization plans” such as Executive Order (EO) 366 and EO 102, and all privatization programs for various government agencies, government-owned and controlled corporations (GOCCs), and other public enterprises and institutions.
  • Stop the ejection of peasants from their land
  • Provide substantial and immediate government assistance to farmers in areas hit by natural or man-made calamities that affected farm production.
  • Suspend the clearing operation of the Metro Manila Development Authority (MMDA) against sidewalk vendors.

II. Provision of Sufficient Social Services

  • Provide sufficient social services especially public education (excluding military education), public health, and public housing by substantially increasing their national budget allocation and increasing public spending on them.
  • Reduce substantially the national budget allocation for the military and debt servicing and redirect the savings to allocation for public education (excluding military education), public health, and public housing.
  • Stop the privatization and commercialization of all public schools and state colleges and universities, public hospitals, and public housing to ensure that the services they provide are accessible and available especially for the poor and ordinary income earners.
  • Stop the demolition of urban poor communities and provide decent and secure housing for the poor.

III. Generating Resources While Easing the Undue Burden Caused by Taxes and Debt

  • Stop the automatic appropriation for debt servicing through the repeal of Presidential Decree (PD) 1177 or the Budget Reform Decree of 1977 and Executive Order (EO) 292 or the Administrative Code of 1987 to free up resources for social services spending.
  • bDeclare a moratorium on foreign debt servicing and review all foreign debts to determine which are odious and illegitimate and therefore shall no longer be repaid.
  • c. Remove the 12% value added tax on oil, power, water, and other basic consumer goods and basic services to lower prices and stretch the budgets of ordinary households.
  • d. Provide tax breaks for all minimum wage earners in the private sector and their equivalent in the public sector. Review all pertinent laws and policies to ensure that such tax breaks are appropriately enjoyed by targeted workers and employees.
  • Provide tax breaks and other forms of financial assistance to Filipino-owned small and medium enterprises (SMEs) to boost their viability. Various forms of fiscal incentives accorded to transnational corporations (TNCs) and other foreign businesses operating in the country must be redirected to Filipino-owned SMEs.
  • Re-impose tariffs on imported goods that have been cut back or eliminated under past and present trade liberalization programs and international trade agreements to generate revenues for the national government.
  • Implement a serious crackdown against government corruption, bureaucratic wastage, and smuggling that take away much-needed public resources.

IV. Mitigating the Cost of Living and Controlling the Prices of Basic Goods and Services

  • Implement the demand of all private and public sector workers for a substantial increase in their wages through legislation.
  • Impose price control mechanisms on basic consumer goods and provide state subsidy to mitigate sudden increases in prices. Review all pertinent laws and policies to ensure that price control mechanisms are properly implemented and are actually beneficial to consumers.
  • Repeal Republic Act (RA) 8479 or the Oil Deregulation Law of 1998 and RA 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 to stop and reverse the privatization and deregulation of the oil and power sectors that have led to increasing petroleum prices and electricity rates.
  • Stop all new increases in water and power utilities caused by various automatic rate adjustment mechanisms under privatization contracts forged by past and present administrations.
  • Stop all new increases in mass transportation fares. In the case of public utility jeepneys, buses, and taxis, government must provide considerable assistance to drivers and small operators including, but not limited to, subsidies on petroleum and spare parts. Onerous and additional fees imposed by government agencies on the public transport sector must be scrapped as well.
  • Freeze the increases in tuition and all other fees imposed by public and private schools, colleges, universities, and other educational institutions nationwide. Stop the deregulation of tuition and other fees by repealing the Education Act of 1982.
  • Ensure the availability of affordable food, especially rice. Make available to the general public the P18.25 per kilo rice subsidized by the National Food Authority (NFA), which is currently restricted to holders of family access cards (FACs). The privatization of the NFA must be stopped and its mandate to ensure food security must be promoted, including its procurement of at least 25% of domestic rice production. At the same time, it must maintain its palay support price of P17 a kilo for palay farmers.
  • Review all relevant laws and policies to ensure that affordable, essential, and safe medicines are available and accessible to the people.

V. Ending and reversing the liberalization of trade and investment

  • Reverse all trade and investment liberalization policies to support and promote domestic production. All previously removed and reduced tariffs, quantitative restrictions, foreign equity limits, and other forms of control and regulation must be restored and strengthened to check the undue competition posed by foreign goods and capital on Filipino producers.
  • Stop the implementation of existing bilateral, regional, and multilateral free trade agreements (FTAs) such as, but not limited to, the Japan-Philippines Economic Partnership Agreement (JPEPA) and the various trade deals under the World Trade Organization (WTO). All ongoing negotiations for new bilateral and regional FTAs as well as talks for new liberalization commitments in the WTO must be immediately discontinued.
  • Stop all moves to further liberalize the investment regime in the country such as, but not limited to, House Resolution (HR) 737, which calls for 100% foreign ownership of land and resources in the country through Charter change (Cha-cha).

VI. Orienting the Domestic Economy Towards Self-Sufficiency and Self-Reliance

  • Promote local industries by providing government support and incentives that will allow them to expand and create jobs inside the country.
  • Reorient the import-dependent and export-oriented design of light industry in the country towards the production of basic consumer goods as well as basic producers’ goods to meet the needs of Filipino consumers and domestic economic sectors.
  • Undertake a program for national industrialization including developing the country’s capability to produce industrial goods. Effective state control over strategic sectors and economic activities such as energy, raw material production, utilities, etc must be ensured.
  • Establish and implement a genuine agrarian reform program in the country and undertake rural industrialization to spur development and deal decisively with unemployment, poverty, and hunger.

VII. Addressing the Roots of the Armed Conflict in the Country

  • Considering that poverty and marginalization are the roots of decades-old armed conflict in the Philippines, it is vital to address these issues head-on instead of the current militarist approach, including military operations cloaked under so-called poverty alleviation initiatives. There is a need to resume the stalled peace negotiations, including the talks between the Government of the Republic of the Philippines (GRP) and the National Democratic Front of the Philippines (NDFP), as well as with the Moro Islamic Liberation Front (MILF) to allow discussions on comprehensive and extensive social and economic reforms that the Filipino people urgently need especially amid a worsening global economic condition.

Despite P330-B stimulus package, job losses to hit around 1.2 M in 2009

layoffs-graphWith the entry of fresh graduates and first time workers into the labor force, the number of unemployed Filipino workers could increase by around 1.2 million by yearend. While this is bad news enough, the worse news is that the Arroyo administration could not adequately handle the worsening jobs crisis despite its much-touted P330-billion economic stimulus package.

Rapid pace of dislocations

The additional 1.2 million jobless Filipinos this year assumed that the labor force will grow by 900,000 this year, the annual average since 2001. The National Economic and Development Authority (NEDA), meanwhile, projected job losses could reach as high as 800,000 by the end of 2009. Assuming an optimistic scenario that the stimulus package could create 500,000 jobs this year, and then the job creation deficit will still be around 1.2 million by December.

Add to this the expected massive displacements of overseas Filipino workers (OFWs); of which at the rate they are being retrenched could reach at least 21,000 by yearend. The number could be much higher in reality because 575,000 OFWs are directly and immediately vulnerable to displacements due to the crisis including some 268,000 factory workers in Taiwan, Macau, and South Korea.

Such estimate is also supported by the fact that foreign direct investment (FDI) and commodity exports, main drivers of local job creation in the country, are contracting due to the financial and economic crisis. Thus, except perhaps for a few thousands of contractual jobs from the outsourcing business, there is no expected significant expansion in jobs this year that could make a dent on the rapid pace of unemployment.

As of January, the official tally by the Department of Labor and Employment (DOLE) pegged the cumulative number of retrenched workers at 40,000 and that of displaced OFWs at 5,404.

The rapid pace of dislocations will aggravate the perennial job scarcity facing the Philippines, where an average of almost 4 million workers, or more than 11% of the labor force, are unemployed every year since 2001 – based on official surveys.

Consider that even before the recent wave of massive displacement of Filipino workers here and abroad, the growth in the number of jobless was already alarmingly high at more than 90,000 per year under the Arroyo administration.

Temporary, flexible jobs & labor export

The main response of the Arroyo administration is emergency employment through the so-called stimulus package. Around 500,000 jobs could be generated from it mainly through pump priming on infrastructure projects, according to the NEDA. But these jobs, which also include street sweepers hired by the Metro Manila Development Authority (MMDA), are highly temporary, lasting for a couple of weeks and will have no meaningful impact on the accelerating pace of displacements.

Aside from temporary employment, labor flexibilization is the other “solution” that the government offers. Labor flexibilization has long characterized domestic employment and has compounded the problem of job insecurity and scarcity in the country. But the situation is sure to deteriorate as the DOLE has further legitimized labor flexibilization in the guise of responding to the crisis.

Under DOLE Advisory No. 2 series of 2009, the labor department has issued guidelines on compressed workweek arrangements; reduction of workdays; rotation of workers; forced leave; broken time schedule; and flexible holiday schedules.

Alas, the guidelines just create more room for the intensified abuse and exploitation of Filipino workers. At the expense of the workers, many firms, even the ones that are not hit hard by the crisis, will take advantage of the guidelines to implement flexible work arrangements to maximize profits. The guidelines also send the unmistakable message that the workers alone should bear the brunt of the crisis.

But while labor flexibilization may jack up the profits of some companies, it will in general fail to keep many local businesses afloat as long as key issues behind the jobs crisis, such as overdependence on foreign markets and capital, are not dealt with. Thus it will fail to even moderate the massive job losses.

Finally, labor export continues to be the principal job “creation” strategy of the Arroyo administration. Reintegration and retraining programs have been set to re-export displaced OFWs to other potential labor markets. At the same time, aggressive “marketing missions” and facilitation are being carried out by the Philippine Overseas Labor Offices (POLOs) in 30 so-called strategic host destinations worldwide. The 1.4 million-jump in global deployment of OFWs last year further boosted the bullish outlook of the Philippine Overseas Employment Administration (POEA) on government’s labor export policy.

This optimism is however oblivious to recent developments in the global labor market. The International Labor Organization (ILO) has projected the number of jobless worldwide to increase by as much as 50 million as the economic crisis deepens. Mounting demand from workers abroad to protect and generate domestic jobs will limit opportunities for OFW deployment. Countries like Macau and Malaysia have already started efforts to curb the entry of migrant workers in certain jobs. Industrial unrest is sweeping Europe with British workers protesting the entry of foreign workers amid rising unemployment.

Responding to the “supercrisis”

Experts have described the recession as a “supercrisis” and could be long and deep. Its impact on poor and underdeveloped economies like the Philippines is just starting to unfold. Obviously, emergency employment through a stimulus package as well as labor flexibilization and export will not do the trick. A total overhaul of the economy’s orientation must now be started – shifting from an externally driven growth and job creation to a one driven by internal sources of economic expansion and employment.

This requires the creation of a medium- to long-term comprehensive development plan for local industries especially the small and medium enterprises (SMEs) that will primarily cater to the domestic market. Indispensably, this means refocusing the decades-old colonial bias towards foreign goods, capital, and market to a nationalist bias for local investment and commodities. SMEs account for more than 60% of total employment in the country.

Deeply related to this is genuine and lasting agrarian development, which must be pursued with real land distribution to the tillers at its core. Schemes that will further dispossess the tillers of land must be abandoned such as extending the flawed Comprehensive Agrarian Reform Program (CARP) and 100% foreign ownership of land through Charter change (Cha-cha). The Genuine Agrarian Reform Bill (GARB) pending at the House of Representatives must be passed as it could set off the process for genuine and lasting agrarian development to take place.

A highly developed agricultural sector, instead of catering to the First World markets like it has been doing since time immemorial, should supply the needs of local industries and form crucial linkages in the domestic economy. It must be noted as well that the agricultural sector directly and indirectly accounts for more than 70% of domestic employment.

Immediately, the government must desist from further opening up the domestic economy to foreign competition – an economic policy which for decades has pushed thousands of Filipino firms into bankruptcy and dislocated millions of Filipino workers, farmers, and farm workers. More liberalization of trade and investment through bilateral, regional, and multilateral free trade agreements (FTAs) and economic partnerships must be stopped.

Instead, a host of readily available and accessible support package such as tax breaks and exemptions and other privileges must be exclusively extended to Filipino SMEs and other local direct producers such as the farmers and their organizations. This will spur domestic production and consumption, invigorate the economy and create more jobs at home.

But these important reforms will not materialize without a movement of people clamoring for change. The raging crisis confronting the country and the rest of the world is providing fresh opportunities for progressive social movements to present alternative economic policy frameworks and programs that will challenge the current flawed paradigm of development.

Amid the economic gloom, there is reason to be hopeful.