The Aquino government was beaming with pride when it announced that the country had a high – by Philippine standards – year-on-year GDP growth rate of 7.8 percent during the first quarter of 2013. Construction registered the highest growth with 32.5 percent, followed by financial intermediation with 13.9 percent, manufacturing at 9.7 percent, public administration and defense, compulsory social security at 8 percent and other services at 7.6 percent.
On the expenditure side, the highest increase is in capital formation at 47.7 percent, of which construction still tops at 33.7 percent, then intellectual property products at 10.4 percent and durable equipment at 9.4 percent. This was followed by government final consumption expenditure at 13.2 percent. However, exports of goods registered a negative (-) 8.4 percent, and exports of services a negative (-) 2.1 percent.
The fact that construction registered the highest increase shows the connection between the elections and the GDP growth. The administration normally spends on infrastructure projects to boost the chances of winning of its candidates. The same pattern is revealed with the 7.3 percent growth during the 1st quarter of 2004, 6.3 percent in the 1st quarter of 2007 and 8.4 percent in 2010. In terms of private construction, what are visible are the condominiums sprouting almost everywhere.
Nevertheless, the Aquino government grabs every opportunity to boast about the 7.8 GDP growth during the 1st quarter of 2013. It has been giving the impression that the Philippines is taking off – for the nth time – from being the basket case of Asia toward becoming one of the fastest growing economies in the region and the world.
Also in May, Labor and Employment Secretary Rosalinda Dimapilis-Baldoz announced that reverse migration of OFWs is “now happening and it is happening fast.” She cited the Entertainment City with the opening of the Solaire Resort and Casino as an example of new job opportunities, which offer salaries and benefits comparable to that of overseas work. Baldoz said she is confident that reverse migration will continue as “more industrial sectors are catching up in terms of labour package and training.” Ironically, she said this on her way to Jeddah, Saudi Arabia where she was scheduled to sign a Memorandum of Understanding on household service workers.
When Labor Secretary Baldoz was interviewed regarding the 7.8 GDP growth, she was quoted as saying “”With this welcome news of very positive business and consumer sentiment, we are inspired to work harder to maintain and sustain industrial peace, enhance our job facilitation and promotion programs, push greater effort to protect our workers by encouraging voluntary compliance with labor standards and health and safety standards, and enhance social protection for the vulnerable sector in order to attain the national goal of inclusive growth through full employment.”
Then reality struck. By June 11, Rosemarie G. Edillon, assistant director-general of the National Economic and Development Authority (NEDA), announced that unemployment rose to 7.5 percent of the labor force. This could even be higher if we consider those who have given up looking for work because of repeated failures to land a job. University of the Philippines economics professor Benjamin Diokno noted that the labor force participation rate fell to 63.9 percent from 64.7 percent last year. The labor force participation rate is the percentage of working-age persons who are employed and those who are unemployed but looking for a job.
Even college graduates, who add to the labor force every year, are hit hard by the unemployment problem. According to Diokno, unemployment among college graduates continued to increase from 877,339 last year to 1,104,788 this year.
Underemployment remains unchanged at 19.2 percent. If we add the unemployed with the underemployed it would be around 27 percent of the labor force or more than one in four Filipinos of working age not earning enough to support themselves and their families.
If we are to include part of the 36 percent who are not employed and are no longer looking for a job and the minimum wage earners, who could barely cope with wages way below the living wage set by the National Wage and Productivity Commission, then the figure would be alarmingly high.
So would Labor Secretary Baldoz’s prediction of a reverse migration of OFWs still hold true?
Yes, according to John Leonard Monterona, Migrante Vice Chairman and coordinator for the Middle East and North Africa. But the context is different.
Around 120,000 OFWs, including the 28,000 undocumented, are being affected by the Saudization policy of the government of the Kingdom of Saudi Arabia. Under the said policy, companies in Saudi Arabia are required to hire Saudi nationals who should comprise at least 10 percent of its total workforce.
The impact of this policy on OFWs and the Philippine economy should not be underestimated as Saudi Arabia remains as the top destination country for OFWs. Estimates reveal that there are 1.5 million OFWs in Saudi Arabia out of the 2.3 million OFWs in the Middle East.
According to Monterona, similar localization policies are being implemented in Bahrain and Oman. Add to this the OFWs who are being affected by political conflicts in Egypt, Syria, and Libya, then the number who would be returning home would really constitute a reverse migration, in a negative sense.
Monterona said, more than 200 stranded OFWs were already repatriated from Saudi since April. Nearly 5,000 OFWs came home from Syria, while around 114 OFWs in Amman, Jordan would be repatriated soon.
So with the constriction of labor markets abroad and the worsening unemployment and underemployment situation in the country, where would jobless Filipinos go now?