A Critique of the Economic Resiliency Plan: Why Arroyo’s P330-Billion ‘Stimulus’ Package Will Not Solve Joblessness


Part 2 of a two-part series

As Filipino workers marked Labor Day last May 1, about 400 from their ranks are being displaced daily as fallout of the global economic crisis.

By the Department of Labor and Employment’s (DoLE) own reckoning, the global crisis has already displaced almost 50,400 workers in the Philippines as of mid-March. It also reported that about 59,200 workers were affected by workday reduction, job rotation and compressed workweek.

Making the situation worse is the mass displacement taking place among overseas Filipino workers (OFWs). Official report pegs the number of retrenched OFWs at almost 6,500 in 19 countries as of January. But independent monitoring by migrant workers’ group Migrante International shows that the figures, as of February, could reach around 20,000 OFWs from 17 countries.

But government as usual wants us to believe that it is on top of the situation. The supposed resiliency of the economy and Filipino workers are once more being hyped. Government is doing what it can to preserve and create jobs amid the global recession, according to Arroyo administration officials.

In fact, one of the major components of Mrs. Gloria Arroyo’s PhP330-billion Economic Resiliency Plan (ERP) is the Comprehensive Livelihood and Emergency Employment Program (CLEEP). As a sub-program of the ERP, the CLEEP aims to hire for emergency employment and fund and supervise livelihood projects.

“Good News” or False Hope?

From its earlier grim forecasts, officials have shifted to the “good news” approach when talking about the employment situation. As Labor Secretary Marianito Roque puts it when asked on the latest statistics on job losses, “We’re focused on job creation. We are not talking anymore of displacements.” Roque previously described as “abnormal” the dislocations of workers due to the global crunch.

Latest government press releases highlight opportunities awaiting Filipino workers. DoLE sees the job crisis “easing up” in the second quarter, with “fewer workers losing their jobs and tens of thousands of new jobs anticipated”. In Mindanao alone, business process outsourcing (BPO) could create half a million jobs, the Department of Trade and Industry (DTI) said.

In her Labor Day message, Mrs. Arroyo repeated her favorite theme – that the resilient economy protected us from the global crisis and allowed us to continue growing. She added that Filipino workers’ skills and talents are “confounding the gloomy forecasts of pessimists”. The DoLE, for its part, hyped its May 1 Jobapalooza which was supposed to provide 250,000 local and overseas jobs.

But this (over)optimism only gives Filipinos a false hope.

For one, it ignores the dim reality of the global economy, which is facing a crisis that, according to World Bank president Robert Zoellick, “no one knows how long it will last.” With the International Monetary Fund (IMF), the World Bank said recently that “the global economic crisis is turning into a human and development calamity.” The International Labour Organization (ILO) earlier called it a “global jobs crisis”.

As a result of the global crunch, the ILO said unemployment in Asia will jump to 97 million in 2009 – 7.2 million higher than last year. While no country-specific estimates were given, the ILO expects the number of jobless workers in Southeast Asia to grow by 2-3 million this year. It also noted that the Philippines, Pakistan and Cambodia have the fastest expanding labor force in the region and thus are among the most vulnerable.

Already in worst jobs crisis

These gloomy prospects come at a time when the backward and pre-industrial Philippine economy has been undergoing its worst jobs crisis. Lack of genuine industrialization and land reform has made the economy incapacitated to produce and expand gainful and sustainable jobs. Worse, rapid globalization since the 1990s has destroyed countless jobs and livelihood and further debilitated domestic employment generation.

From 2001 to 2007, the average annual unemployment rate is pegged at 11.3 percent with almost 4 million jobless workers every year. In the Aquino years (1987-1992), the averages were 9.5 percent and 2.3 million and have progressively climbed during the Ramos (1992-1998), Estrada (1998-2001) and Arroyo (2001-present) administrations.

Notably, the unemployment rate has remained at double-digit despite a period of relatively high economic growth. The gross domestic product (GDP) grew by an average of more than 5 percent a year in 2001-2007, and peaked at a 30-year high 7.2 percent in 2007. Also significant is the increase in number of poor Filipinos (by almost 4 million between 2003 and 2006) during that period of high economic growth.

This again exposes the hollow optimism of government based on some projections that the Philippine economy is among the few that will not contract this year. If almost 4.1 million workers were jobless in an economy that grew by 7.2 percent in 2007, how many will be jobless when economic growth decelerates to, say 4.4 percent (government’s most optimistic scenario) this year?

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