Waiting for the trickle
Philippines’ jobseekers yet to benefit from country’s economic rise as jobless level climbs to second highest in Asia-Pacific
Jeany Rose Callora left her home on the Philippine island of Negros last year to work at a soft-drinks factory in Manila, hoping to earn money for college. When her contract ended six months later, she said she couldn’t get another job in Southeast Asia’s fastest-growing economy.
“I’ll do anything – saleslady, factory worker, waitress,” the 20-year-old high-school graduate said as she waited 11hours for an interview in an employment agency in Manila, surrounded by dozens of other applicants.
Callora is one of 2.9 million unemployed Filipinos, swelling a jobless rate that climbed to 7.1 per cent in January from 6.8 per cent the previous month. About 660,000 positions have been lost since October 2011, even as the economy expanded 6.6 per cent last year. The Philippines now has the second-highest jobless level in Asia-Pacific, behind India.
The nation is struggling to reconcile a lack of jobs for people like Callora, who have little training, with a shortage of skilled workers in industries such as information technology and shipbuilding. While the economy is being boosted by call centres and remittances from workers who moved abroad, the country’s poverty level hasn’t decreased since 2006.
“What we’re seeing is a two-tier economy with booming sectors favouring skilled workers,” says Frederic Neumann, co-head of Asian economics research at HSBC Holdings in Hong Kong. “The government must boost labour-intensive sectors such as manufacturing and agriculture, or else rising inequality will create pressure for increased social spending.”
President Benigno Aquino Jr has promised to create millions of jobs to cut unemployment to 6 per cent at most by the end of his term in 2016. The person in charge of the plan, Arsenio Balisacan, the economic planning secretary, said proposals include easing curbs on foreign investment, boosting tourism and infrastructure to provide more work outside the capital, and expanding farming and fishing.
“Jobs are now the biggest priority of the government,” Balisacan said. “We are using all resources to create jobs as fast as we can.”
The Philippines attracts the least foreign direct investment in Southeast Asia, according to the World Bank. That’s partly because contract disputes and regulatory reversals in the past have led companies to leave the country.
“The low investment share is because past economic growth has depended more on services that are less capital-intensive than industry,” says Norio Usui, senior country economist for the Philippines at the Asian Development Bank in Manila. “The Philippines’ biggest need is to generate productive job opportunities for the growing working-age population.”
Presiding over a country with one of the youngest populations in the world, Aquino needs to find jobs not just for the current unemployed, but also for the growing ranks of teenagers entering the workforce. Last year, the Bank of America projected that by 2020, the Philippine labour pool will expand by almost 18 million, or 31 per cent, to 75 million, compared with 2010.
Almost half of all jobless Filipinos are between the ages of 15 and 24, according to the government’s National Statistics Office. The biggest area of employment remains agriculture and fishing, which provides work for 30.4 million people, or almost a third of the population. About 8 per cent work in manufacturing.
Call-centre agents are the most in demand, followed by salespeople and service crew, according to Phil-Job-Net, the government’s official job portal. The site has 14,165 vacancies in so-called business-process outsourcing (BPO), which includes call centres.
Leny Aceveda Roxas, who in March lost her job providing aftersales support for an outsourcing company, said she’s trying to avoid BPO jobs, which typically involve working at night. “But with tough times and the lack of opportunities, I’ll have to consider it,” she says.
The Business Processing Association of the Philippines forecast the BPO industry will employ 1.3 million people by 2016, from 638,000 in 2011. Most of the jobs require fluent English speakers.
Banking, services, construction and administration are among other industries struggling to find competent staff.
“The demand for workers is there but the pool of qualified applicants is shallow,” says Joann Hizon, vicepresident of human resources at SM Investments Corp, the holding company of Philippine billionaire Henry Sy. SM plans to hire 8,800 workers this year to boost its payroll from 71,500 as it expands its property, shopping mall and banking businesses, Hizon says.
The Philippines spent the least on public education in 2009 in proportion to its economy among major Southeast Asian nations, according to the latest comparable figures available from the World Bank. The budget was 2.7 per cent of GDP, compared with 6 per cent for Malaysia and 3.5 per cent for Indonesia.
Aquino promised to boost spending by more than 20 per cent this year to address a shortage of teachers, text-books and classrooms. The government also aims to fund more scholarships for vocational courses such as bartending, welding and health care.
For the few who can afford to go to an elite college, the situation is very different. Joy Billones, a legal management graduate from Ateneo de Manila University, says responses to her job applications have been good.
“We’re just working on the salary range,” says Billones, who has had offers from five companies. “I’m lucky because companies prioritise applicants from top schools.”
Still, investment in schools and colleges will take years to improve skill levels. In the meantime, the government needs to attract investment in factories, farms and mines to reverse the unemployment trend.
“The government is investing in education so that, over the long term, workers have higher skills,” says Prakriti Sofat, a Singapore-based regional economist for Barclays. “At the same time, we need opportunities for the currently unemployed.”
With limited opportunities at home, many Filipino jobseekers go abroad to find work. The number of overseas Filipino workers climbed 15 per cent in 2011 to almost 1.7 million, the Philippine Overseas Employment Administration said. The funds they sent home totalled US$21.4 billion last year, about 10 per cent of GDP. The remitted funds have helped fuel economic growth that the World Bank estimates will stay above 6 per cent through 2014.
Still, the proportion of families living below the poverty line in the first half of 2012 was 22.3 per cent, almost the same as the 23.4 per cent in 2006, the government statistics agency said in an April 23 report.
That’s putting pressure on Aquino to divert funds to social services, with the government increasing its conditional cash transfer programme to 44.26 billion pesos (HK$8.4 billion) this year to benefit a record 3.8 million families.
Callora, the youngest of seven siblings and the daughter of a farmer, is not giving up hope and refuses to go back home to Negros, the country’s largest producer of sugar cane.
“I’m going to try my hardest to find work and to study again,” she says. “I’m still young.” Then she adds shyly: “I really want to be a stewardess.” Bloomberg