A Puzzling Philippine Economy

[jpdm]

This article say something about our "strange" economy with no quality growth.

No Free Lunch
[SIZE=4]A puzzling economy [/SIZE]
By Cielito Habito
Philippine Daily Inquirer
First Posted 18:07:00 12/28/2008


MANILA, Philippines – Ever notice how our economy has been behaving strangely lately?

[SIZE=3]We had, in short, less job creation last year when we had much faster (even record) production growth, and strangely enough, more job creation this year when economic growth has been much slower.[/SIZE]

More puzzles
You'd think looking more closely at the data would help explain the puzzle. But the puzzle deepens even more when you check the breakdown of output growth and job generation across major sectors of the economy.


The services sector has significantly slowed down from its brisk growth in past years.

The industry sector posted a healthy 7.1 percent growth in the third quarter, surpassing last year's performance (6.6 percent). And yet it had created only a thousand new jobs in the 12 months preceding last October; the same figure last year was 182,000.


Agriculture is no less a puzzle. Last year, it posted an impressive growth of 5.6 percent in the third quarter, but lost 11,000 jobs. This year its growth has slowed down to less than half of last year's pace (2.5 percent)--and yet generated 161,000 new jobs.

Job-killing growth?

In many cases in fact, there were hardly any job increases at all even as economies continued growing--hence the term (jobless growth). Worse, there have been episodes when growth actually speeded up, and yet jobs actually fell, as in last year's experience with our agricultural sector. This is not just jobless growth; it is better described as "job-killing growth!"


But what we're seeing right now is the exact opposite. As growth slows down, we seem to see more jobs coming about than when the economy grew much faster. This is all welcome of course, but how do we explain such perverse trends?

Job profile

I examined the available tables from the National Statistics Office (NSO) website, made some calculations, and found the following: Of the surprising [SIZE=4]699,000 new services sector jobs[/SIZE] mentioned above, more than [SIZE=4][SIZE=2]half were in[/SIZE] [SIZE=5]trade. [/SIZE][/SIZE]

And since I am not seeing an unusual proliferation of retail stores and shopping malls in the past 12 months, [SIZE=3]I surmise that what this means is that large numbers of Filipinos have taken to the usual informal sector selling/vending activities--"nangangalakal," as squatters near our neighborhood describe the common occupation in their area.[/SIZE]

And this includes selling items scavenged from the neighborhood garbage piles, which they systematically pore over and collect usable items from before the municipal garbage collection trucks come to collect them.


It would seem, then, that much of the puzzles I've been describing simply reflect the resilience of the average Filipino. When our poor compatriots find themselves against the wall, they will find a way. Clearly, the kind of growth we have been experiencing gives us little to be happy with or gloat about even if the posted GDP growth rate is faster than that of our neighbors. [SIZE=4]What continues to elude us is [SIZE=5]quality growth[/SIZE], one whose benefits permeate throughout the economy such that as the saying goes, "the rising tide lifts all boats."[/SIZE]

Comments are welcome at chabito*ateneo.edu

What do you think?

[uls]

it's only puzzling when you rely on just govt data

a lot of things go on in the economy that don't make it into govt data

how do the govt data gatherers record what goes on in the underground economy?

there are no sales invoices, no official receipts, no VAT, no records of underground employers' salaries to underground employees, no tax withheld, no SSS contributions, no PAG IBIG, no Philhealth, nothing

it's all cash transactions in the informal sector with no transaction records, contracts are verbal

and it's not just squatters that make up the informal sector

there's also middle class underground economy

like all that buying and selling of goods and services that go on thru classified ads and websites