Philippines jobless rate soars despite record growth

INQUIRER FILE PHOTO

MANILA, Philippines – The Philippines’ jobless rate soared to a three-year high in April even though the nation has the fastest-growing economy in Asia, official data showed Tuesday.

President Benigno Aquino III insisted the rise to 7.5 percent was due to temporary problems in the farming sector, but economists said it highlighted huge challenges facing the government as it strives to fight poverty.

“The high unemployment rate casts doubts on the robustness and inclusiveness of recent growth statistics,” University of the Philippines economics professor Benjamin Diokno, a former budget minister, told AFP.

The unemployment rate in April was up from 7.1 percent in January. Another 19.2 percent were listed as “underemployed”, or part-timers who work for less than 40 hours a week.

Aquino said a weather-dictated delay in this year’s planting season, which meant many of those surveyed declared they were temporarily out of work, caused the rise in the figure.

“This was offset by improvements in the industry and service sectors. Wage and salary workers working full-time increased in both sectors,” he said.

The farming sector lost 624,000 jobs, while services added 380,000 and industry 224,000, according to the National Statistics Office.

Nevertheless, the rise occurred as the nation’s economy grew an annualized 7.8 percent in the first three months of the year, the fastest pace since Aquino came to power in 2010.

It eclipsed China’s 7.7 percent in the same quarter for the strongest growth in the region.

The Philippines has long had one of the greatest rich-poor divides in Asia, and Aquino has said one of the top priorities of his six-year term is to create a more inclusive economic growth model.

Economist Astro del Castillo, of Manila securities firm First Grade Finance, said despite genuine government efforts, job creation had yet to keep pace with the huge annual turnover of fresh graduates churned out by schools.

“This cannot be achieved overnight,” he told AFP.

To speed up job creation, the government must address issues that deter businesses from investing in the manufacturing and industrial sectors, such as high electricity rates, del Castillo said.

Diokno also cautioned that official data underestimated the true jobless picture, since it only included those actively looking for work but not those who had stopped trying.