6.7% GDP growth is ‘shallow’ amid rising unemployment —IBON

The 6.7-percent economic expansion in 2017 was “shallow” and “job-destroying,” think tank IBON Foundation said on Tuesday, citing its own research that showed 663,000 employees lost their jobs last year.

It was the largest contraction in employment since 1997, the think tank noted.

“For IBON, it is still a jobs-destroying and shallow growth where growth is concentrated in sectors directly benefited by OFW (overseas Filipino workers) remittances and BPOs (business process outsourcing),” Audrey de Jesus of IBON research group told GMA News Online.

“These are external and transitory factors. The better sources of growth can ensure jobs generation and real development are a robust domestic agriculture and industry,” she said.

The statistics office reported the Philippine economy expanded by 6.6 percent in the fourth quarter and by 6.7 percent for the whole of 2017.

In its paper BirdTalk 2017, the research group cited “re-estimated” government data to pinpoint what it claimed was the “exclusionary nature” of Philippine growth. It said the unemployment rate rose to 9.2 percent, compared with the official estimate of 5.7 percent.

This means that as many as 4.1 million Filipinos are unemployed—higher than state figures of 2.4 million—and one to two million others who have dropped out of the labor force due to “discouragement” because of lack of job prospects, the report said.

The number of unemployed persons also rose by 78,000 between 2016 and 2017, according to PSA data.

“This vast reserve army of unemployed gives employees huge leverage over employees and workers with scant options elsewhere in the economy,” according to IBON.

“This combines with the government’s cheap wage policy—ostensibly to encourage hiring, keep prices competitive, and attract foreign investors—to keep wages down and contractualization unabated,” it claimed.

The employment contraction last year was the biggest since 821,000 jobs were lost during the 1997 Asian financial crisis.

Agriculture was the sector hardest-hit by the employment contraction, losing 803,000 workers between 2016 and 2017, according to the report.

The industry sector saw an increase to 7.37 million workers from 7.16, while the services saw a slide of about 72,000 workers, it said.

IBON also criticized the newly-implemented tax reform law for its “anti-poor” provisions.

The scale of the “Build, Build, Build” infrastructure program “will challenge the government’s capacity to implement so many projects at the same time,” IBON noted.

The government claimed that the massive infrastructure bid was “financially feasible” with the Tax Reform for Acceleration and Inclusion law now in place. —VDS, GMA News