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All work and no pay

/ 02:08 AM February 11, 2013

The euphoria from the “impressive” 6.6 percent economic growth in 2012, obvious in the Aquino (Part II) administration, particularly in our leader Benigno Simeon (aka BS), seems to have frittered away in no time.

In the business sector, economic think tanks were hardly exultant over the figures. At the top of the list of their worries was the high unemployment rate, hitting 7 percent in 2012, the highest throughout the Asean. This disturbing figure means that there are 4.5 million jobless people in this country.

How do those millions of people and their families stay alive?


Our leader BS told the press that jobs were actually available, and it was just that the applicants did not have the skills for them. According to him, postings at the Phil-JobNet website went up to 230,000 (from only 117,000 applicants), which was higher than the 40,000 job postings seen when he assumed power.

Well and good. Although the increase in postings could also mean that, in the past two years, more companies started to use the Internet (instead of the classified ads in the dailies) to announce vacancies. It does not necessarily mean a six-fold increase in job openings, as the administration announcement seemed to imply.

Anyway, we are not even talking here about the so-called underemployment rate, which official figures showed to have hit more than 22 percent in 2012, compared to less than 20 percent in 2011.

By some quirk of government-style statistics, people are deemed employed if they as much as wash the dishes at home. You know, all work and no pay! If people sell bottled water in the streets, earning not even enough money for one meal a day, the government no longer counts them among the jobless. They just fall under the “underemployed” category.

Based on official figures, our underemployed reached some 14 million able-bodied men and women, about five times the entire population of Singapore.

Also, civil society groups called Social Watch Philippines and Philippine Rural Reconstruction Movement claimed that the 2012 economic growth under the Aquino (Part II) administration benefited only a few, and even widened the gap between rich and poor.

Surely the hottest economic sector today is the business process outsourcing, which has created thousands of new jobs. The problem is that the sector requires high levels of skills, which the more than 20 million “unemployed” and “underemployed” do not have.

The BPO sector is fine. It helps in a big way. It is just that those in the business sector want to see more effort from the government to develop the agriculture and industrial sectors where hordes of workers are needed. They often note that the Aquino (Part II) administration does not seem to realize that its policies are killing jobs. They cited the administration’s vigorous push for the “sin tax” law that led to a steep rise in excise taxes on liquor and cigarettes, and which would soon kill a number of companies.


A case in point involves Associated Anglo American Tobacco Corp. which, for the past 70 years, has been doing business in the country, employing hundreds of workers.

From what I gathered, AAATC has already decided to close down its factory that makes the native kind of cigarettes. It will close sometime in April, affecting hundreds of workers.

How come the company is closing down? I heard that its owners realized that its products could no longer compete with imported cigarettes. Under the administration’s version of the “sin tax,” the government imposes the same tax rate on AAATC native cigarettes as the imported ones.

A pack of AAATC’s best-selling brand of native cigarettes used to cost P10, but thanks to the “sin tax” law, it now costs something like P24 a pack. In effect, AAATC must raise its prices beyond the reach of its customers.

Another killer of jobs, something that our leader BS miserably failed to address, has been the embarrassingly high incidence of smuggling. Electronics. Cosmetics. Farm goods. Name it, and you can be sure it is being smuggled into the country. According to UP Economics professor Ben Diokno, there was a glaring anomaly in the economic figures released by the Aquino (Part II) administration, noting that exports grew by 8.7 percent in 2012, but imports expanded by only 2.6 percent.

Now here is a fact on the Philippine economy: Most raw materials used in our export products are actually imported. Diokno asked: “How can the economy grow by 6.8 percent with imports barely growing at 2.6 percent?”

The only explanation to Diokno was, well, rampant smuggling, noting that smuggling was the “huge elephant in the room” that government was too blind to see. Obviously, import figures in 2012 were low because of smuggling.

The dailies were replete with complaints against smuggling, coming from all sorts of businessmen such as hog raisers, poultry producers, vegetable growers, rice farmers, fuel suppliers and sugar farmers.

Our farm sector could not compete with imported farm goods, simply because the agriculture sectors in other countries are more efficient, thanks to low electricity rates and good infrastructure, not to mention the subsidies from their governments.

Diokno also questioned the administration’s figures on the agriculture sector, where it was reported to have grown by 0.9 percent. In real terms, it grew by 2.7 percent.

“It is counterintuitive,” Diokno said. For one, it should mean that prices of agricultural products declined. If this was the case, Diokno was correct in fearing a return to the boom-and-bust cycle of the economy in the past.

One of these days, thousands of jobs in agriculture may be lost.

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TAGS: economy, jobs, Philippines, sin taxes, underemployment, unemployment
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