Business World, 27 December 2011


As the year came to a close last year, when asked about his number one wish for 2011, President Benigno Aquino said, “I hope the economy will take off.” “I hope the number of jobless will be lowered by 2011,” he added. The economy turned out much worse than expected, and while the jobs market turned out much better than planned, the quality of jobs has apparently deteriorated. About one of four new jobs created were in the nature of unpaid family workers.

The average hours worked declined, as the number of part-time workers soared. Those who worked for less than 20 hours per week rose by 1.5 million, those who worked more than 40 hours rose by half a million.

The Aquino administration hoped that the economy would grow by 5.5 to 6.5%, but with an aspirational growth of 7 to 8% in 2011. The emerging reality is that the economy would grow at a much slower pace of 3.7%. Blame the Philippines’ poor performance to the Aquino administration’s inept execution skills and to a harsher and slower world economy.

The emerging growth of 3.7% is based on the actual 3.6% growth in the first three quarters of the year. Assuming a faster growth of 4.0% in the fourth quarter, the economy would hit a full year growth of 3.7%. This is the emerging consensus among the international financial institutions (IMF, World Bank, and Asian Development Bank), other international organizations and individual economists.

As the economy slows, there is a discernible rise in disenchantment by Filipinos on the way the government is addressing issues that affect the ordinary man on the street, the November 2011 Pulse Asia survey results show.

A year ago, in October 2010, a majority of Filipinos approved of the Aquino administration’s performance in eight of 10 selected national issues: fighting corruption(57%), fighting criminality (62%), enforcing the law to all citizens (58%), increasing peace in the country (56%), stopping the destruction and abuse of the environment (51%), creation of more jobs (59%) increasing the pay of workers (56%), and efforts to control population growth (53%).

But in two gut issues, the Aquino government registered less than majority rating: controlling inflation (45%) and reducing poverty (47%).

Falling approval, rising disapproval rating

Fast forward to a year after. A comparison of the November 2011 survey results and the October 2010 survey results shows a sharp decline in citizens’ approval of the Aquino administration on issues that affect them the most: reducing poverty (approval rating of 47% to 32%, or a loss of 15%), controlling inflation (from 45% to 32%, or loss of 13%), increasing the pay of workers (from 56% to 43% or minus 13%), creation of jobs (from 59% to 48% or minus 11%), and fighting criminality (from 62% to 53% or minus 9%).

Worse, the disapproval ratings of the Aquino administration has doubled on issues that affect the poor majority the most. In October last year, 18% of respondents disapproved of the way the Aquino administration was performing on the issue of poverty reduction. In November this year, the disapproval rating on poverty reduction has soared to 36%, double the level a year ago.

As of the November Pulse Asia survey results, more people disapprove (36%) than approve (32%) in the way the current administration is implementing its poverty reduction programs.

But poverty reduction is related to other national issues like job creation, improving the pay of workers, moderating inflation, and, in the long-run, controlling fast population growth.

On other gut issues the deterioration was equally serious: controlling inflation (from 21% to 37%, or an increase by 16 percentage points), increasing the pay of workers (from 14% to 25%, or by 11 percentage points) and enforcing the law to all, whether influential or ordinary citizens (from 9% to 18%, or by 9 percentage points).

The number of citizens who feel that the Aquino administration has failed to enforce the law unbiasedly has doubled. Perhaps many people were reminded of the slow progress in prosecuting those responsible for the abominable Maguindanao massacre. The survey coincided with the second anniversary of the tragic incident.

People’s dissatisfaction with the way the Aquino administration is handling issues to control fast population growth is also rising. From a dissatisfaction level of 13% in October 2010, this has jumped to 25% in November 2011, or by 12 percentage points.

On other issues the disenchantment with the Aquino administration has grown too — fighting graft and corruption lost 7 percentage points; fighting criminality, 7 percentage points; equal enforcement of the law to all citizens, 9 percentage points; increasing peace in the country, 6 percentage points; and stopping the destruction and abuse of the environment, 6 percentage points.

Puzzling jobs numbers

On the government’s program to create jobs, the disapproval rating rose from 11% in October last year to 21% in November this year, or a difference of 10 percentage points. In brief, the number of citizens who disapproved the administration’s performance on job creation has nearly doubled.

It is in this sense that the October jobs number came as a surprise. Official labor survey results show that unemployment rate fell from 7.1% in October 2010 to 6.4% in October 2011. How is that possible in the face of a slowing economy and the rising people’s dissatisfaction with the way the government is addressing the problem of unemployment?

The answer is in the details. Two million new jobs were created, but half a million of those were in the nature of unpaid family workers. By occupation, close to a million (956,000) were in the nature of labor and unskilled workers. This category of workers rose from 32.4% in October 2010 to 33.2 % in October 2011, or from 11.8 billion to 12.8 billion in October 2011.

The number of part-time workers increased. The average hours worked declined: those who worked for less than 20 hours per week rose by 1.5 million, those who worked more than 40 hours rose by half a million.

More workers are looking for a job now than ever before. The labor participation rate rose from 64.2% to 66.3%, year-on-year. This suggests that with hard times, there may be a need for a second or third worker in the family.

Overall, 2011 was a disappointing year. It ends with a major catastrophe in Southern Philippines — a grim reminder of what lies ahead. The new year begins with the same old problems and new challenges. More than ever, these require focus, hard work, innovativeness, steadfastness, competence, and firm commitment to the common good on the part of public officials