Infra build-up leads to easing of unemployment

 

By Rose de la Cruz

 

Infrastructure build-up from both the public and private sectors helped ease unemployment rate in April 2018 with employment rising to 94.5 percent versus 94.3 percent a year ago, or an equivalent of 40.9 million Filipino finding jobs (from 40.2 million in 2017).

 

The National Economic and Development Authority said this would improve some more if the Ease of Doing Business law, which would boost manufacturing, comes into full implementation this year.

 

Net employment generation reached 625,000, reversing the loss recorded in April 2017.

 

“Employment grew partly due to increased infrastructure spending as the Department of Public Works and Highways’ road projects and rehabilitation of public school facilities are already underway nationwide,” NEDA Officer-in-Charge (OIC) and Undersecretary Jose Miguel R. de la Rosa said.

 

The industry sector recorded a strong employment growth rate of 8.1 percent or 605,000 workers, increasing its total employment share to 19.7 percent, the largest in the past decade. The construction subsector is the biggest contributor to employment, generating 468,000 jobs, among the industry subsectors during the period.

 

“We are now seeing the contribution of the Build, Build, Build campaign in terms of job generation. We can expect the demand for workers in the sector to grow further as more projects break ground,” de la Rosa added.

 

Meanwhile, unemployment continued to decline to 5.5 percent, the lowest recorded rate for all the April rounds of the LFS in the past decade.

 

However, youth unemployment remained high despite improving to 13.8 percent, which is also the lowest in the past decade.

                                                

“We must continue to foster stronger linkages between employers, the academe, and the government to ease access to employment information and opportunities,” de la Rosa said.

 

Underemployment, referring to those employed but wanting more work, increased to 17.0 percent or 6.9 million workers in April 2018, compared to 16.1 percent or about 6.5 million underemployed workers in the same period last year.

 

This is mainly driven by the increase of those employed fulltime but wanting more work by 30.8 percent, or approximately 752,000 workers. Still, other aspects of quality of employment significantly improved such as wage and salary employment, full time employment and mean hours of work.

 

New businesses

 

“In order for us to achieve our employment targets, reforms in market regulations and tackling structural barriers are important to facilitate the creation of new businesses and to boost the outputs of firms. These may translate to high-productivity jobs,” de la Rosa said.

 

He explained that apart from the recently passed Ease of Doing Business Act, other key reforms should be pursued to improve the labor market.  These include the reduction of foreign investment restrictions and package 2 of the Tax Reform Program, which will lower corporate taxes while rationalizing investment incentives.

 

He added that ramping up the government’s Build, Build, Build program will sustain the country’s employment growth.

 

De la Rosa is OIC of NEDA while Socioeconomic Planning Secretary Ernesto M. Pernia is in Korea as part of President Rodrigo R. Duterte’s visiting high-level delegation to the peninsula.

 

Factory output grew in April as higher commodity prices, strong consumer demand, and a weaker exchange rate encouraged manufacturers to produce more, the National Economic and Development Authority (NEDA) said.

 

The latest Monthly Integrated Survey of Selected Industries (MISSI) of the Philippine Statistics Authority showed a key barometer in measuring the output of the manufacturing sector, the Volume of Production Index (VoPI) at 31.1 percent in April 2018, significantly higher than the 0.1 percent growth in the previous year.

 

The Value of Production Index (VaPI) registered a growth of 31.7 percent in April 2018, a turnaround from the 1.6 percent decline in 2017.

 

This made the three-month moving average growth rate of both indexes at 23.3 and 23.0 percent, respectively.

 

Growth in production of food and export-oriented products (processed food, chemicals, fabricated metals, leather, petroleum, non-metallic minerals, electrical and non-electrical machinery, among others) contributed to the gains.

 

Higher government spending on infrastructure in the months leading to April helped sustain growth in construction-related manufactures, which continued its upward trend given higher demand for non-metallic mineral products, particularly cement.

 

Outlook bullish

 

Boosting business sentiment too is a new law - the Ease of Doing Business and Efficient Government Service Delivery Law - that will streamline procedures, shorten processing time for government transactions, and create a central business portal to receive and obtain data involving business-related transactions.

 

“A bullish business outlook is expected for the entire second quarter on the back of robust economic growth. An expansion of businesses will also be facilitated thanks to the new law on ease of doing business,” NEDA Officer-in-Charge (OIC) and Undersecretary Jose Miguel R. de la Rosa said.

 

“The full implementation of the Ease of Doing Business Act of 2018 and engagement in massive and coordinated capacity-building initiatives will help the manufacturing sector grow further,” he added.

 

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