Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Vol. V, No. 30      September 4 - 10, 2005      Quezon City, Philippines

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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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