COMMENTARY
Economic Indicators that Really Matter
Despite so-called economic growth, the average annual unemployment rate is
one of the highest rates recorded in the last half-century,
underemployment rate is the highest in almost two decades, and
accelerating inflation pushes the daily cost of living ever higher.
By Sonny
Africa
IBON
Features
Posted by Bulatlat
Presidential Management Staff head
Rigoberto D. Tiglao correctly said that the economy is important in
understanding the political storm surrounding President Gloria Macapagal-Arroyo.
But to be able to understand the roots of the overwhelming dissatisfaction
of the people with the President, it is most important to look at the
indicators that really matter.
The country's workers, peasants,
odd-jobbers and low-paid public and private employees are worse off now in
2005 than 4 ½ years ago when Ms. Arroyo took over the presidency in
January 2001. Long-standing problems of poverty, inequality, joblessness
and pitiable social services have deepened. Combined unemployment and
underemployment in the second quarter of the year is at a record high.
Prices of basic commodities, petroleum products and water and power
services have been inexorably rising. These are very real economic
failures.
Despite so-called economic growth,
unemployment has been rising since 2001. The average annual unemployment
rate rose from 11.1 percent in 2001 to 11.8 percent last year which is,
apart from the 12.8 percent rate in 1985, the highest recorded in the last
half-century.
There were 4.8 million unemployed and 8.4
million underemployed Filipinos in April 2005, according to the last Labor
Force Survey (LFS), or a combined 13.2 million Filipinos either jobless or
otherwise still looking for additional work. This is by far the biggest
number of unemployed and underemployed the country has ever seen.
Sleight of hand
The worsening unemployment problem has
even been obscured by methodological sleight of hand in April 2005. The
National Statistical Coordination Board (NSCB) adopted a more stringent
definition of unemployment that reduced the official unemployment rate by
4.6 percent and the number of unemployed by 1.9 million. These Filipinos
did not get jobs. Rather, by administrative fiat, they were no longer
considered part of the labor force and so weren't considered unemployed
even if they remained jobless as ever.
This sorry lack of jobs is aggravated by
the serious deterioration in the quality of the jobs to be had. The number
of underemployed or those with jobs but still seeking additional work
drastically increased to 26.1 percent in April 2005 from 18.5 percent last
year. This underemployment rate is the highest in almost two decades and
the 8.4 million number of underemployed a near-record high.
That more Filipinos are struggling to eke
out a living or are putting up with whatever jobs are found is not
surprising. Falling inflation rates since the mid-1990s reversed under the
Arroyo administration, and prices have been rising with increasing
rapidity in the last 3 ½ years. The inflation rate, or the speed at which
prices are rising, has risen to over 8 percent in the first half of 2005
from a whole-year average of 6 percent in 2004. Monthly inflation rates
since the last quarter of 2004 are already among the highest in the past
decade.
Accelerating inflation
Accelerating inflation has pushed the
daily cost of living for a family of six ever higher, up to P629.10 in the
National Capital Region (NCR) and an average for the whole Philippines of
P517.60. The implied daily cost of living per person here is higher than
the absurdly low poverty line of P33.60 per person per day that Tiglao
used to claim that poverty incidence has gone down to 24.7 percent in
2003. By more decent standards, at least 80 percent of the population must
be considered poor.
The rising joblessness and falling real
incomes increase pressure on publicly-provided services. Unfortunately
real spending on social services, i.e., taking inflation into account, has
been drastically falling under the Arroyo administration. Comparing the
period 2001-2004 with the four years before it, real spending on education
has fallen by 3.2 percent, health spending by a large 24.5 percent and
housing spending by a severe 61.0 percent. The impact would be even worse
if population growth is factored in.
Social services have been increasingly
crowded out by debt servicing in the national government (NG) budget.
Interest payments on debt have steadily increased as a share of the NG
budget from 24.7 percent in 2001 to a projected 33.2 percent in 2005. To
make room for this, education's share over the same period has fallen from
16.6 percent to 14.9 percent, health's share from 1.8 percent to 1.4
percent, and housing's share from 0.3 percent to 0.2 percent. This budget
deprioritization of social services hits the poor, or those most dependent
on publicly provided social services, the worst.
Malacañang's economic managers can
continue with their glowing commentaries on the supposed strength of the
economy under President Arroyo, but this would be an exercise at clutching
at statistical straws that few are likely to believe. IBON Features /
Posted by Bulatlat
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