The promise of employment growth

One of the strangest phenomena in the last six years under the Aquino administration was the dramatic increase in gross domestic productivity (GDP) amid nearly stagnant, if not negative, employment. Note, of course, that employment data are mere derivations—mathematical projections, like the imagining of a figure from shadows cast.

Likewise, GDP growth is effectively nothing more than a disembodied statistic. It was a ballyhooed percentage ballyhooed by the Executive despite its diametric debunking where other indices such as the poverty incidence, the discrepancy between the richest and poorest, the hunger-incidence rate and the almost petrified unemployment rate, were felt in the gut by the public.

One is derived from the arithmetic of expenditures recorded in a year versus the same from a previous year. The other is felt where hunger pangs, abject joblessness and stark differences between the lifestyles of the rich against the squalor of the poor are benchmarks.

Numbers do not excite but feelings can inflame. Statistics can and are cavalierly quoted even by the most moronic politicians and cheerleaders who do not understand them. But malaise can be easily felt. Perhaps, with even more intensity and impact. While one is quantifiable and the other is not, perceptions do not always translate to facts and the twine may never meet. Unfortunately, in the political arena, that one directly relates to the other is important.

Fortunately, surrendering a few notches from the fiscal balancing act where GDP growth and fiscal deficit-spending relate, allowing the economy’s capacity to bear a slight increase in excise and consumer taxes on luxuries, on one end, and petroleum, on another, given the latter’s low global prices, and increasing real employment from frenetic infrastructure spending starting next year when the Duterte budget really starts to get off the ground – throughout all these activities, Duterte’s economic managers hope to jumpstart true inclusive growth.

Think about each of these initiatives. Think about the consumerism from tax relief borne out a more equitable tax bracketing system. And then think about inclusive growth.

More jobs are expected to be created with the intense focus of the Duterte administration on infrastructure expansion as the principal economic activity his administration intends to pursue.

Already, the jumpstart has begun. In the last three months since the presidential elections unemployment fell to 5.4 percent from the 6.1 percent recorded in the three months immediately preceding.

This is good economics. As opposed to inter-agency malversation, the former shell games at the Budget department under Aquino, and the funds re-channeling magic employed through thinly guised pork-barrel systems, including a wasteful cash dole mechanism that merely extend patronage economics among a wider mass base, the new initiatives accumulate and invariably lead to that inclusive growth that was excruciatingly elusive under the Aquino administration.

Note in particular how the employment springboards have been strategically put in place. The increase in foreign direct investments (FDI) resulting from an increase in business confidence in the newly installed economic team has started to create new jobs and has resulted in an unemployment rate lower than any accomplished during the last six years.

Rather than political hyperbole, the jobs data are being catalyzed by investments. To validate, analyze the FDI data from the Bangko Sentral ng Pilipinas (BSP).

Net FDI inflow with the prospect of a change in the administration grew by as much as 94.9 percent or $4.2 billion. This nearly doubles from the $ 2.2 billion a year earlier when foreign investors then confronted a lame-duck administration that had simply coasted along from FDI levels virtually unchanged since 2010.

FDIs are behind the employment growth. The recent rise results from both the manufacturing and construction sectors, apart from the services sector that the last administration relied on. With the prospect of accelerated infrastructure development, indeed, the elusive inclusive may just pop up as we eagerly await 2017.