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No Free Lunch

Duterte’s jobs record

In July 2016, when President Duterte assumed the presidency, the Philippine Statistics Authority’s quarterly Labor Force Survey (LFS) counted 40,974,000 employed persons in the country. The latest figure, for January 2019, is 41,368,000. Simple arithmetic shows that 394,000 net new jobs came about in the first two and a half years of this administration.

Taking account of seasonality in jobs, the July 2016 figures may be more comparable to those in July 2018, and the January 2017 data to the latest job numbers. What would these numbers show? The number of employed persons in July 2018 was 40,659,000, reflecting a net loss  of 405,000 jobs in the first two years of the Duterte administration. If we compare January 2017 (39,347,000 jobs) to January 2019, we see a gain of 2,021,000 jobs in that two-year period—but following a sizable loss of 1,627,000 million jobs in the first six months of Mr. Duterte’s term. The net increase over two and a half years, then, amounted to the 394,000 figure cited earlier.

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How does that number compare with those under previous presidents? Still based on LFS data, the first two and a half years under President Benigno Aquino III (July 2010-January 2013) saw 1,655,000 net new jobs created; under President Gloria Macapagal Arroyo, 1,923,000 net new jobs arose from July 2004 to January 2007. President Joseph Estrada had a worse job creation record between July 1998 and January 2001 (covering his entire aborted term), with only 231,000 net new jobs created.

The great irony is that both Mr. Estrada and Mr. Duterte came into office projecting themselves to be champions for the poor—and yet their job creation records indicate inability to help the poor in what they need most, which is gainful employment.

In stark contrast to the job numbers, sustained gross domestic product (GDP) growth under Mr. Duterte is the best among his recent predecessors, with the postelection slowdown that marked past presidential election years not happening this time. But while GDP has grown by more than 6 percent annually, job growth lagged far behind, growing annually by an average of only 0.4 percent. And with wages barely keeping up with inflation, this means overall income growth in the economy went more to capital than to labor. That is, profit income has been the dominant beneficiary of GDP growth, while labor income has been left far behind—certainly not the kind of growth a professed pro-poor leader would be proud of.

Could we squeeze some good news out of these unflattering jobs outcomes? My regular readers would know that I’ve actually been writing of positive news on the labor front in the past year, based on a falling unemployment rate and indications of improving quality of jobs. The latter is seen in lower underemployment and rising number and proportion of wage and salary jobs. But closer examination of the numbers tends to diminish their importance.

First, the slightly lower unemployment rate of 5.2 percent (versus the July 2016 rate of 5.4 percent) even with meager job creation is explained by the fact that 15-year-olds (the minimum working age) must now stay in school under the new K-to-12 school curriculum. The labor force participation rate thus fell significantly from 63.3 percent of working-age Filipinos in July 2016, to only 60.2 percent last January. Note that the K-to-12 program was first implemented in June 2016.

Second, underemployment is lower mainly due to the loss of well over a million jobs in agriculture, where underemployment is most prevalent. Third, while wage and salary jobs are growing relative to self-employed and unpaid family workers, there is evidence that the bulk of them are non-regular or agency-hired workers. Fourth, the number and proportion of self-employed employers (i.e., small businesses) have declined.

The World Bank and other analysts are right: Our primary economic challenge remains creating quality jobs. And if we want leaders at the national and local levels who can truly help meet that challenge, we must shun candidates who gather votes by buying them, giving only temporary gratification—rather than demonstrating that they have a long-term vision and strategy to help get more and more Filipinos gainfully employed.

[email protected]

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TAGS: Cielito Habito, Duterte, employment, Filipinos, jobs, No Free Lunch
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