Presented as Plenary Paper at the National Conference of the Urban Missionaries of the Catholic Bishops Conference of the Philippines

1. Overcoming the jobs
crisis and shaping
an inclusive
recovery
Dean Jorge V. Sibal
UP SOLAIR
2010

2. While incarcerated during Martial Law,
Senator Benigno “Ninoy”Aquino, Jr.
said-
 “the new generation Filipino must shake and
awaken the Catholic Church, which has long
ignored the need for social reform and become
flabby in its position of revered irrelevance.
Because the Church has grown remote from the
masses, quasi-religious fanatics have banded
together and prospered in the countryside”.

3. To the Gov’t, Ninoy said-
 “respond to the demands of the middle class for
a mass market. The archaic and regressive tax
structure must be revamped. The wealth that the
oligarchy rapaciously covets and hoards must
get down to the masses in the form of roads,
bridges and schools; these are what the tao
understands as good or bad government”.

4. Today, with his son “Noynoy”Aquino
(P-Noy) at the helm of the new
government,
 the same cry reverberates as the
economy recovers from the global
financial crisis.
 There is a need to formulate an inclusive
type of social, political and economic
recovery program in order to correct and
reorient the over-all direction of the
country.

5. The resiliency of the country’s economy
pales behind the standards of Asia, or even
the ASEAN region.
 Despite positive growth rates after several
crises, the growth rates have been uneven.
 The annual economic growth rates from the
1960s to 1970s ranged from 5 to 6 percent; fell
to 2 percent during the 1980s to mid-1980s;
back to 4 percent in 1996 to 2000 and 5 percent
in 2000 to 2007 (Aldaba and Hermoso, 2010).

6. Inclusive growth
 Refers to growth where the citizenry is an
active participant in the creation of the
country’s growth and at the same time a
major beneficiary from the said growth
(ILO, 2010).
 It is a type of growth that maximizes job
creation and reduces poverty.

7. Jobless growth
 The recovery has not solved the social-
political and economic problems of the
Philippines which existed even prior to the
occurrences of past crises.
 The recovery is not able to create enough
jobs to reduce poverty and hunger.
 It has not led to the decline of poverty
(ILO, UNDP and ADB, 2009).

8. Jobless growth
 Filipinos living below poverty line rose
from 30 percent in 2003 to 33 percent in
2006 (ADB). Poverty gap is the increasing
where the richest 10 percent families got
36 percent of the country’s total income in
2006, or 19 times the family incomes in
the lowest decile (NMPC, 2010).

9. UNDP’s Philippine Millennium Development Goals
(MDGs) have four key factors in measuring the
country’s accomplishments.
1) policy choices and programme coherence
2) governance and capacity deficits
3) fiscal space constraints and aid
effectiveness
4) national ownership, political will and
partnership.

10. MDG’s reported accomplishments
 the country has made progress in poverty
reduction, nutrition, gender equality, reducing
child mortality, combating HIV and AIDS, malaria
and other diseases, and access to safe drinking
water and sanitary toilet facilities
 it has to exert more efforts in universal access to
education, maternal mortality and access to
reproductive health services.

11. But 2 assessments of the National Multi-Sectoral
Policy Conference on Human Development
(NMPC) conducted in 2005 and 2007 showed that-
 The MDGoals remain a farfetched dream and
the deadline is in 2015.
 The country’s human development is
“worrisome” where the Human Development
Index (HDI) increased from 0.652 in 1980 to
0.751 in 2007.
 The Filipino “continue to suffer from poverty,
inequality, poor health services and condition,
environmental degradation, and poor
governance” (NMPC, 2010).

12. Basic Problems of the Philippines- defective
economic and labor structures characterized
as follows:
a. The primary growth engine is externally
generated from the earnings of the OFWs
which reached US$14 Billion in 2007.
Remittances continued to increase even during
the height of the U.S. originated global
financial crisis in 2009.
 A more sustainable economy should be internally
driven through continuing growth and progress of
local industries especially in industry and
agriculture.

13. Basic Problems of the Philippines-
Indicators
2. Contributions of industry and agriculture to local
production and employment have declined.
 Before 1970s, local industries were protected and the country was
among the fastest growing economies in Asia. Trade liberalization
exposed local and foreign enterprises to global competition. They
were forced to reengineer their operations and adopt more modern
technologies in order to survive and expand in the process. Others
suffered and stopped operations.
 Too much protectionism in the past made local industries including
American multinational corporations less progressive, competitive
and export-driven. Americans in the past were given parity rights and
State protection enjoyed by the local enterprises (Sibal, 2002).

14. Basic Problems of the Philippines-
Indicators
3. It was the service sector which has rapidly
grown, spurred by OFW remittances and
increased private consumption.
 Much of the growth in services occurred in trade,
private households and other community, social and
personal services where jobs are low-skilled and
less decent, informal and earn less income. Also
contributing to the growth in services are the
telecommunications services and business process
outsourcing and contact centers where jobs are
more highly skilled and with higher incomes.

15. Basic Problems of the Philippines-
Indicators
4. Exports have been declining as a
percentage of GDP and are becoming less
diverse and import dependent.
 Export’s share in the GDP fell from 55 percent
in 2000 to 42 percent in 2007. Food and
beverages and wearing apparel and textiles
which are more dependent on local inputs
have declined and have been replaced by
electrical machinery and transport.

16. Basic Problems of the Philippines-
Indicators
5. The development pattern is consumption-
led rather than investment-led.
 Private local consumption accounted to 70 percent of the GDP
from 2000 to 2007. The GDP growth of 4 to 5 percent from
1996-2007 was characterized by declining local and overseas
investments. Gross Capital Formation as a percentage of
GDP declined from a high 24.8 percent to 14.5 percent in
2006 making the performance of the Philippines among the
lowest in ASEAN region except Brunei. The declining
investments were caused by factors like high cost of doing
business, poor infrastructure and corruption. Compared to the
its ASEAN counterpart, the Philippines ranks among the
lowest in terms of the share of foreign direct investments to
GDP (Aldaba and Hermoso, 2010).

17. Basic Problems of the Philippines-
Indicators
6. Most of the jobs that were created in the
process were in the informal sector of
the economy.

18. Analysis of low jobs growth
 The causes of the country’s perennial high
unemployment and underemployment are rooted on
deep economic, social and political problems.
 The failure in both industrialization and agricultural
democratization and modernization is caused by the
domination and control of political dynasties and
industrial elites or oligopolistic business conglomerates.
 Hence, the country’s political and legal institutions,
though democratic in form, are in reality dominated by
these elites.

19. Ninoy Aquino explained:
 “there are perhaps more trained technicians in the
Philippines today than anywhere else in Southeast Asia,
but the industrial growth that can absorb these
technicians has not come. Moreover, the Philippines’
natural resources are among the richest in Southeast
Asia, yet we are fast falling behind such countries as
Malaysia and Taiwan in industrial development. Here
again, the oligarchs must be made to move, to invest, to
industrialize. They can be captains of industry, but
instead they have elected to dig in their heels on the
land”.

20. Ninoy Aquino’s suggestion to the
new leaders:
 To make the country surge forward, the country’s young
leadership should stir “the entrenched oligarchs into
accepting the urgency of land reform’’.
 Ninoy lamented however that the “forces of reaction
have made government efforts in this direction largely
meaningless”.
 Ninoy warned that the “the Filipino elite- the corrupt and
corrupting, the irresponsible and unresponsive old
leadership- must face up to the need for reform or be
swept away’’.

21. Implication to P-Noy
 Ninoy’s prognosis is being reiterated by his son, P-Noy
who must lead the nation to the correct path of economic
recovery and progress with inclusive growth.
 The country’s inclusive growth targets can be based on
the standards of the UNDP’s Millennium Development
Goals and the ILO’s Global Jobs Pact (GJP) formulated
by the 2009 International Labour Conference.
 These frameworks are aimed at stimulating and guiding
economic recovery, job generation and protecting the
workers and their families.

22. ILO’s Recommendations
1. Governance and institutional reforms.
Minimizing corruption at the high levels
of government and renew efforts for
peace negotiations with rebel groups
towards settlement and lasting peace.

23. ILO’s Recommendations
2. Fiscal reforms. Improve better tax
collection through: increased tax efforts
via sin taxes; implement the simplified
net income tax system (SNIT); abolish
redundant fiscal incentives; and increase
excise taxes on other luxury goods and
on gasoline products.

24. ILO’s Recommendations
3. Attract foreign and local investors. Lower
the cost of doing business in the country
via: reduction of red tape and corruption
in government, better infrastructure
services (airports, seaports, energy,
etc.), and security for investors.

25. ILO’s Recommendations
4. Sound industrial policy for job creation. Strategic
government-private sector partnership with the state
supporting sunrise and potential industries with
competitive advantage especially those that are labor
intensive and capable of creating backward and
forward linkaging. State support can further be
extended through basic infrastructure, encourage
industry clustering, networking and cooperation,
providing market information and research, and other
favorable policy environment.

26. ILO’s Recommendations
5. Assist small and medium enterprises. Being the
main job generators in the country, assistance
of social partners should include: access for
credit and finance; technological assistance
that include material testing, inspection, quality
certification, instrument calibration, patent
registration, repositories of technical
information, research and design and technical
training; and strategic linkaging with large firms
including multinational corporations.

27. ILO’s Recommendations
6. LGU support in attracting and maintaining
investments. Local government should refocus
their concern in promoting local development
and investments in their areas and less on
their regulatory functions.
7. Tap domestic savings and foreign remittances
towards local investments. Create financial
instruments to channel local and foreign
savings towards investments particularly in the
rural areas.

28. ILO’s Recommendations
8. Increase workforce capabilities. Reforms in
education and training systems, skills training
and upgrading for out-of-school youth,
strengthen voc-tech education, and solving
labour market and mismatch problems.
9. Help OFWs obtain quality jobs and assure
protection in host countries. This is in addition
to the protection and assistance provided the
POEA and the OWWA.

29. ILO’s Recommendations
10. Implement a comprehensive social protection program
for both the formal and informal sector workforce.
Programs include unemployment insurance, Philhealth
for the unemployed, micro finance and micro-insurance
for the entrepreneurial poor, subsidies for the poorest
of the poor like conditional cash transfers and KALAHI-
CIDSS, updates of the comprehensive database on
poor households, and rationalization of other social
protection programs to avoid duplication and wastage.

30. ILO’s Recommendations
11. Set up a more permanent multi-
stakeholder coordinative mechanisms to
address crisis and emergency situations.
12. Support the establishment of an Asian
Monetary Fund.

31. References:
 Aldaba, F. and Hermoso, R., 2010, Crafting Coherent Policy
Responses to the Crisis in the Philippines, Draft report, Policy
Integration Department, ILO, Geneva.
 Aquino, Benigno Jr., 1985, “What wrong with the Philippines?”,
Solidarity Quarterly Journal, reprinted in the Philippine Daily
Inquirer, Aug. 21, 2010, pp. A1, A17 and A18.
 ILO, 2010, Overcoming the jobs crisis and shaping an inclusive
recovery: the Philippines in the aftermath of the global economic
turmoil (forthcoming)
 Lim, Joseph and Manuel Montes, (2000), “The structure of
employment and structural adjustment in the Philippines”, The
Journal of Development Studies, Vol. 36, No. 4, pp. 149-181.
 Sibal, Jorge (2002), “Measures of Economic Development: How the
Philippines Fares”, Philippine Journal of Labor and Industrial
Relations, Quezon City: UP SOLAIR.
 _________, Third National Multi-Sectoral Policy Conference on
Human Development, Manila, August 17-18, 2010, sponsored by
the Philippine Legislators’ Committee on Population and
Development Foundation, Inc.