Now for some good news
When asked to speak on the Philippine economy these days, I talk about the good, the bad and the challenging (in lieu of “the ugly”). With all the doom and gloom about recent adverse developments, I thought it useful to focus on the good news for some relief.
The latest data bring genuinely good news on the labor front, where there’s improvement in both quantity and quality of jobs. The July 2018 Labor Force Survey reports nearly half a million more jobs over the past year, leading unemployment to fall from 5.6 percent to 5.4 percent. Further good news is that agriculture gained 113,000 net new jobs, reversing the large decline of 723,000 reported in April, and the more than a million decline last year.
Manufacturing also generated another 114,000 new jobs, reflecting the continued surge of the sector, which has been growing faster than the overall economy for the last seven years. Services, which continue to dominate employment in the economy, produced 281,000 net additional jobs.
These numbers merit an even closer look, as there’s even more good news in the details. The continued substantial increase in manufacturing jobs reflects improved quality in the jobs our economy is generating, because those jobs are mostly full-time wage and salary-paying jobs. In contrast, jobs in agriculture tend to be highly seasonal, and many are unpaid family workers — “all work and no pay,” as I’ve described it before — and this is where most of the underemployment in the economy occurs. The slight increase in the overall underemployment rate (from 16.3 percent last year to 17.2 percent in July) is likely to be just a reflection of the reversal of last year’s more than 1 million decline in farm jobs, to the positive increase recorded in July.
Jobs in the services sector span a wide range. On the low end are highly informal (aka underground) ones like those of ambulant vendors (think of fishball, “balut,” cigarette or newspaper “maglalako”), informal drivers (of “habal-habal,” pedicabs and jeepneys), or the ubiquitous “nangangalakal” (garbage scavengers). But on the other end are highly paid bankers and financial experts, real estate developers, call center agents and other business process outsourcing professionals, information technology experts, managers and other office workers.
The July data show that 95 percent (268,000) of the net additional services jobs are of this latter kind. Meanwhile, jobs under “trade and motor vehicle and motorcycle repair” and “accommodation and food services” — where the informal jobs described earlier tend to be — saw significant declines (by 22,000 and 95,000, respectively). If these reflect greater “formalization” of services sector jobs, then it must indicate the improved quality of our jobs, and is good news.
Further supporting improved job quality is the data on the breakdown of jobs according to class of worker, of which there are four: wage and salary workers, individually self-employed, self-employed with employees in an own family-operated enterprise, and unpaid family workers. The data show declines in the less desirable categories of unpaid family workers (down by 219,000), and the individually (and most likely informally) self-employed (down by 475,000). More than offsetting these are the more than a million additional wage and salary workers, and 139,000 additional enterprise owners who employ others.
This is welcome news, then, for Trade Secretary Ramon Lopez, whose department’s mantra of “Trabaho at Negosyo” apparently continues to be reaping tangible positive results.
And there’s more. The second-quarter data on foreign direct investment (FDI) approvals, reflecting intentions to invest in the country in the near future, showed a dramatic turnaround from its 37.9 percent decline in the first quarter, to a 70.4 percent jump in the second quarter, for a year-to-date increase of 10 percent. The data also show that the single biggest sector to benefit from these FDIs will be manufacturing, thus promising quality jobs.
We just have to make sure that these investment intentions will, in fact, materialize, and under current circumstances, that will not be easy.
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