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Economists urge gov’t to focus on job creation, peso appreciation

PH needs inclusive growth

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Workers line up for overseas jobs at the Philippine Overseas Employment Administration (POEA) office in Manila. Economists said the Philippines should focus of job creation. AFP PHOTO/JAY DIRECTO

MANILA, Philippines—As inflation is seen to remain tame or at least within the official target band, the government should focus on other important issues, particularly employment, to achieve its aim of inclusive growth, private economists said.

The National Statistics Office (NSO) reported on Tuesday that inflation reached 3 percent in January 2013, slightly up from 2.9 percent in December 2012. It was slower compared to the 4-percent hike a year ago.

“From a public policy standpoint, whether it’s 2.9 percent or 3 percent is of little significance. Inflation will continue to be tame because of the peso appreciation,” Benjamin Diokno, of the University of the Philippines School of Economics and former budget secretary, said via text message. As such, he said, policymakers should focus on two related concerns: persistently high unemployment and the appreciation of the peso.

Victor Villegas of the University of Asia and the Pacific also said the focus should be on job creation. “NSO should be given a budget to make do a labor force survey monthly, instead of quarterly,” he said.

Citing a World Bank study, Villegas noted that the Philippines needed 3.5 million jobs a year, or more than the previous target of 1 million jobs per year. “That can be achieved only by a depreciating currency,” Villegas said.

According to World Bank Country Director Motoo Konishi, the Philippines needed 14 million jobs between now and 2016. “The domestic job market in the formal, services and manufacturing industries and the jobs abroad are not enough to absorb so many people getting into the labor force. This means that all other sectors in the economy, particularly agribusiness and agriculture, must contribute more to address joblessness and poverty. Job creation is even more urgent in Mindanao as jobs contribute also to social cohesion,” Konishi said.

The need for jobs that raise real wages or bring people out of poverty is a “challenge,” he said.

The 3 percent inflation rate in January was within the official target band. The government aims to keep inflation within the 3 to 5 percent range this year, according to the Development Budget Coordination Committee.

The National Economic and Development Authority (Neda) attributed the slight rise in prices to higher food and power prices and the implementation of the new sin tax law.

Neda Assistant Director-General Rosemarie G. Edillon noted that the overall growth of consumer prices in the Philippines was still slower compared with those in Indonesia and Thailand in January 2013. Headline inflation in Indonesia and Thailand stood at 4.57 and 3.39 percent, respectively, during the period.

Also on Tuesday, the peso fell after the government reported that inflation slightly accelerated in January from month-ago level. The local currency closed at 40.645 to the US dollar or 5 centavos lower than the 40.595:$1 on Monday. Intraday high hit 40.62:$1, while intraday low settled at 40.65:$1. The volume of trade amounted to $740.4 million from $938.5 million.


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Tags: economy , inclusive growth , job creation , Peso , Philippines

  • http://profile.yahoo.com/BFOPP2LDSFJFL6KVGA52SDIVHA John

    To create more jobs, the government has to amend the Cory constitution in business which is the 60-40 rule.  This rule only serves the interest of the conglomerates and the elites.  If this rule is lifted, more foreign direct investment would come and create competition and more jobs to the lower and middle class Filipinos.  This will create a multiplier effect since it will create related services and jobs to support the new investments, thus hiring more and more Filipinos.

  • JasonBieber

    Good luck trying to tell PNoy that.

    PNoy since he stepped into office has been promising job creation and lowering unemployment but he hasn’t remain true to his promise. In fact, unemployment remains high. And when asked regarding the problem with unemployment PNoy blamed the Filipino people for not applying and blamed them for not being qualified.

    Pnoy said the Filipino people are his boss so i guess he is blaming his bosses for the high unemployment in the country.

  • http://pulse.yahoo.com/_BS5VTWT6OCAHW64HDDGYQJ4KE4 Edmund

    kahit sinong ordinaryong tao, alam  na yan…  we are interested more on suggestions like how we can create jobs….  

  • http://profile.yahoo.com/NJ4K6PNPPF7IDMU43SXWVLGO3M R2r

    We are blessed that we have so many economist like Mr. Diokno and Mr. Villegas. however, if they can share their ideas on how to create more jobs and to improve the rural economy then this more interesting than giving information without so much flesh.

    • parefrank

      Just pui the gigantic elecyton spending and vot buying amounts into job creating, the pork barrels into rural improvement and punish the big businesses that imports for less (overvalued) pesos but sell then the goods and services for more pesos in RP.  Easy you can get a trillion pesos. And with a peso rate based on its real purchase power, the millions of OFW families could buy more and also create jobs at home.

  • seraq

    depreciating the peso will contribute to a high inflation rate and this will put burden to all the people especially the unemployed, wala na nga trabaho mataas pa ang presyo ng bilihin

  • bgcorg

    Not only economists like Drs. Bernardo Villegas and Benjamin Diokno see that the country’s economic planners and managers need to generate jobs for the long term sustainability of the Philippine economy.  Whether there is an rh law or not, the current population with productive age should be able to work and thus contribute to economic progress. Productivity is so important, especially in agriculture, agribusiness and marine-based industries, nor only in mamufacturing, export and service sectors, that even foreign scholars have pointed out our way to go.  At present, our competitive edge over other countries had been attributed to our “young vibrant workers” both in the BPO and OFW sectors. If the rh law is declared finally constitutional, the country should be ready about its loss of that competitive age and care for more senior citizens, past their productive age.  Current legislation is not ready.

    • http://www.facebook.com/jane.tan.3367174 Jane Tan

      Newsflash, BPOs do not hire underaged workers. Even if they did, most of our BPOs are what, call-centers? Do you honestly think that they would hire someone who didn’t even finish their education because their family of 8 kids couldn’t afford to pay for their schooling?

      In this day and age, if a family really believes that having more children will significantly raise their family income, they should think about raising quality first then quantity; to have adequate spacing between kids. Its not as it was before when company standards weren’t as high as they are now.

    • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

      Lahat talaga kailangan i-connect sa RH Bill no?

      Talo ka.  Get over it.

    • parefrank

      The problem is, that the government prefers to export jobledd people and let them remit dollar billions to support the loans and credits of the administration. That is much easier done, export unemployment, brag then about low local unemployment and report the big forex reserves of BSP as proof of good governing.

  • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

    So Diokno wants peso appreciation while Villegas is essentially advocating peso depreciation to create jobs.

    Both have merits, and I’d personally love to see a debate about this somewhere.

    • http://twitter.com/erncastillo ern

      appreciate or depreciate by intervention and you have an artificial rate which is temporary, and will get out of hand anyway…. leaving a more devastating effect

      Concentrate on poverty alleviation and strengthen investments…and leave the currency alone. Invite investors that generate employment…but you cannot also turn down investors who do not generate employment…. they are sources of tax money.

      Why not the government take-over all idle lands for ten years to make them productive (profit sharing with owner); after which the real owner will fully take-over? Much can be done:vegetables, fruits, poultry and swine, native crafts, etc. This will unquestionably generate employment. Forget about those graduates who prefer to sit down in air-conditioned offices in makati…kahit walang pera, basta naka porma at humihimas ng celfone.

      • http://pulse.yahoo.com/_EXFI4EUGM23PQ4FMQKLVH36OXI Jose

        I know how the economics work.  However, the government (through the BSP) does work to stabilize the exchange rates through monetary policy tools.  It also often targets modest appreciation / depreciation, and I’m curious as to what exactly they’re planning.

        The last bit likely isn’t legal, and would probably blow up any good work done to hte economy.  People complain about foreign ownership rules: how do you think foreigners will feel when they see the government forcibly taking over private land?

  • bogli_anakdami

    huwaaaat…

    pres gung gong akin’o stated that there are plenty of jobs but no applicants???

    allah eh ano naman itong headline na to???

    ano ba yan?



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