THAT’S ACCORDING to the latest survey of the Social Weather Stations, commissioned by the BusinessWorld daily, and reported on Wednesday in all major newspapers except one.
According to the SWS survey undertaken March 4 to 7, 27.2 percent of respondents reported they were jobless. The downward trend is pretty clear: the unemployment rate was 23.5 percent in November 2010, and 20.5 percent when President Aquino assumed office.
If the SWS findings are extrapolated to represent national data, the March jobless rate means that Mr. Aquino has presided over an economy in which in just nine months 2.8 million were added to the ranks of the jobless, now totaling 11.3 million.
It will get worse by the time Mr. Aquino marks his first year in office. UP economist Raul Fabella was quoted as saying that the unemployment rate will rise in June as college students who graduated end of March normally do not immediately get work.
Based on the SWS figures, Mr. Aquino now has the distinction of being the first President in recent decades whose first year in office is marked by the steep worsening of unemployment.
Even the first year of the short-lived presidency of Joseph Estrada was not as bad. Based on the SWS surveys, Estrada’s first year saw unemployment fall from 10 percent in July 1998 to 7.5 percent in June 1999. On the other hand, the jobless rate during President Gloria Arroyo’s first year fell from 10.3 percent in July 2001 to 8.4 percent in May 2002. (The different dates are due to the fact that SWS undertook its surveys in different months of a year.)
Since the SWS started its jobless surveys only in 1993, we have to use unemployment data from the Bureau of Labor and Employment Statistics to see how earlier administrations fared in their first year in power.
Unemployment during the first year of Marcos’ martial law period fell from 6.1 percent in August 1972 to 5.1 percent a year later. The historical jobless rates however point to a flip side to that silly election-campaign notion of Mr. Aquino being “the fruit of a good tree.” Unemployment also worsened during Ms Corazon Aquino’s first year in office, from 7 percent in the first quarter of 1986 to 10.2 percent in July 1987. The jobless rate of 8.5 percent at the start of President Fidel Ramos’ term in July 1992 increased only marginally a year later, to 8.6 percent in July 1993.
The worsening of unemployment in the country is a red flag over Mr. Aquino’s administration, since there has been no major international or domestic shock to the economy on the scale of the 1997 financial crisis, nor was there a global fear over terrorism as happened after 9/11, nor did oil prices really go through the roof in the past 11 months. Yes, the uprisings in Middle East and North Africa disrupted our overseas labor markets. But at most only a few thousand Filipino workers lost their jobs in those countries.
Quite ironically though, Mr. Aquino’s mindset that everything the previous administration touched stunk partly explains the worsening unemployment. Mr. Aquino in fact even boasted that his officials had cancelled or rebidded about P9 billion worth of infrastructure projects, which he said his officials had to review to be sure that they did not involve corruption by officials of his predecessor.
The amount is actually much higher. The budget department’s data show that infrastructure and capital outlay spending was decreased by P28 billion from the programmed level last year. Maintenance and operating expenses were also slashed by P19 billion. “In the first half of last year, President Aquino was busy checking on (President) Arroyo’s projects, so nothing moved,” UP economist and former budget secretary Benjamin Diokno said in a television interview.
To illustrate roughly what happened, a laborer who was expecting to be employed in a government road project approved a year or even years ago, suddenly found himself unemployed during Mr. Aquino’s watch—since his officials put the project on hold, to make sure that there was no corruption involved in it. Check out the public works and highways department’s website, and read its announcements about many projects involving billions of pesos “rebidded.” A sincere anti-corruption move? “Either they’re saints, or they are just demanding their own cut now, since they are in power,” one veteran DPWH officer commented.
One likely reason though for the worsening of unemployment is the swift dissipation of confidence over Mr. Aquino’s leadership.
It is almost a truism that a worsening unemployment is due to the pull-back of business investments. Businessmen may have woke up to the fact that Mr. Aquino just can’t hack it, and therefore have postponed their investment decisions. The perception has been worsened with the flaccid image of his economic team. Finance Secretary Cesar Purisima seems to enjoy a crime-fighting role more, pursuing tax-evaders and smugglers, instead of the finance secretary’s traditional role as primus inter pares in the government’s economic team. Neda Secretary Cayetano Paderanga and Trade Secretary Gregory Domingo are very nearly invisible secretaries.
Mr. Aquino’s biggest program—involving the staggering figure of P22 billion this year—is not driven by economic policy, but by a social welfare agenda: the conditional cash-transfer program. Laudable and clever as that dole-out scheme is (as it is conditional on the certain actions by poor families, such as keeping their children in school), it appears irrelevant though to current business confidence.
If Mr. Aquino doesn’t shape up, the righteous path that he claims to be journeying on will be teeming with the unemployed.
From the Philippine Daily Inquirer