Professional Documents
Culture Documents
Doing Business
Cayetano W. Paderanga, Jr.
Professor, UP School of Economics
1 February 2010
Flow of the Presentation
• Services sector has always outpaced the overall employment growth & labor
force growth since 1988
• Industry sector hasn’t recovered to its pre- 1997 crisis growth numbers
• Agriculture sector’s growth numbers always been below 2%
• Labor force grew 2.66% annually in ’01- ’05 period, before revisions
How about the unemployment picture?
Unemployment Rate, 1988- 2009
• Jobless rate has been above 10% since 2000 then it dropped
to 8% in 2006. Is it due to extra jobs generated in agri &
industry? No. Then, what explains for the huge drop?
One caveat in using post-2006 jobless
numbers…
Starting in the April 2005 Labor Force Survey (LFS)
round, the government will use a new unemployment rate
definition which adds the ―availability criterion‖ to the then- used
―without work‖ & ―seeking work‖ criteria in the old definition.
(NSCB Resolution No.15- 2004)
Since it is already too late for now to curb the entry of more
workers in the labor force, policymakers will have to raise
the absorbing capacity of the domestic economy…
BUT HOW???
But, first how does RP’s growth picture
look like?
What is RP’s growth picture?
Growth Rate of GDP , 1981- 2009
• Boom bust growth pattern from 1980s up to the 1990s. But since
2001, the country has avoided this scenario so far—even at the height
of the global economic crisis.
What is RP’s growth picture?
Growth Rate of GDP and Sub Sectors, 1981- 2009
• After its deceleration in the early 90s, the Services has fully recovered and
remained robust, recording positive growth even at the height of the global
economic crisis
How did the crisis reached the Phils?
• US still a major export market for Philippine products (both direct &
indirect)
•ADB: About 68% of the trade in Asia revolves around making final
products for export to the US and Europe
Outlook
Manufacturing sector greatly suffered,
effectively constricting economic growth
The resilience of remittances and private
business services helped mitigate the worst
effects of the global financial crisis
Remittances has fueled private consumption
BPO sector has continued to provide jobs
Policy responses: Maintenance of adequate
liquidity and fiscal spending on targeted
cash transfers
Expect less from exports for growth
stimulus
Developed countries – e.g. US, Japan – remains shaky from the crisis.
Hard to expect consumers abroad to begin buying again as strong as before
the crisis.
How dependable is domestic spending?
Exports
Level of investments
Source: NSCB
Information dissemination
Emphasizing good news about Phils
Labor information to address supply-demand mismatch
Maintenance of credible and up-to-date statistics
Business incubator
Access to credit
Tax exemption for a period of time
Trade promotion
Skills enhancement
More importantly, gov’t need to address
the ff:
Inadequate government support services to private
sector, particularly to MSMEs
Inadequate government support in trade promotion
Lack of skills enhancement programs
No business incubator
No technological support
1 February 2010